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20 Reasons Why You Need a Business Plan in 2024

Written by Dave Lavinsky

20 Reasons Why you need a business plan

What is the Purpose of a Business Plan?

The purpose of a business plan is to provide a clear roadmap for the company’s future. It outlines the vision, goals, and strategies of the business, guiding entrepreneurs and stakeholders in understanding its operations and objectives. A well-crafted business plan template helps attract investors and funding by showcasing the potential for profitability and growth.

Top 20 Reasons Why you Need a Business Plan

1. to prove that you’re serious about your business.

A formal business plan is necessary to show all interested parties — employees, investors, partners and yourself — that you are committed to building the business. Creating your plan forces you to think through and select the strategies that will propel your growth.

2. To Establish Business Milestones

The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you’d certainly share the news that you launched your new website or reached $1M in annual revenues.

3. To Better Understand Your Competition

Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company’s competitive advantages. And if you don’t currently have competitive advantages, to figure out what you must do to gain them.

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4. To Better Understand Your Customer

Why do they buy when they buy? Why don’t they when they don’t? An in-depth customer analysis is essential to an effective business plan and to a successful business. Understanding your customers will not only allow you to create better products and services for them, but will allow you to more cost-effectively reach them via advertising and promotions.

5. To Enunciate Previously Unstated Assumptions

The process of actually writing the business plan helps to bring previously “hidden” assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity. For example, you might have assumed that local retailers would carry your product; in your business plan, you could assess the results of the scenario in which this didn’t occur.

6. To Assess the Feasibility of Your Venture

How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture. In some cases, the result of your planning will be to table the venture. And it might be to go forward with a different venture that may have a better chance of success.

7. To Document Your Revenue Model

How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model. And upon reading your plan, others may suggest additional revenue streams to consider.

8. To Determine Your Financial Needs

Does your business need to raise capital? How much? One of the purposes of a business plan is to help you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital. It will also enable you to plan ahead, particularly if you need to raise additional funding in the future.

9. To Attract Investors

A formal business plan is the basis for financing proposals. The business plan answers investors’ questions such as: Is there a need for this product/service? What are the financial projections? What is the company’s exit strategy? While investors will generally want to meet you in person before writing you a check, in nearly all cases, they will also thoroughly review your business plan.

10. To Reduce the Risk of Pursuing the Wrong Opportunity

The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities. So you make the best decisions.

11. To Force You to Research and Really Know Your Market

What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target market for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace. And it will allow you to use this knowledge to make decisions to improve your company’s success.

12. To Attract Employees and a Management Team

To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that the idea is sound and that the business is poised to achieve its strategic goals. Importantly, as you grow your company, your employees and not you will do most of the work. So getting them aligned and motivated will be key to your success.

13. To Plot Your Course and Focus Your Efforts

The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones. You wouldn’t go on a long driving trip without a map; think of your business plan as your map.

14. To attract partners

Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed explanation of your company.

15. To Position Your Brand

Creating the business plan helps to define your company’s role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners. With the industry, customer and competitive insight you gain during the business planning process, you can best determine how to position your brand.

16. To Judge the Success of Your Business

A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).

17. To Reposition Your Business to Deal with Changing Conditions

For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new ideas and strategies.

18. To Document Your Marketing Plan

How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business. And the marketing strategies and tactics you use will evolve each year, so revisiting your marketing plan at least annually is critical.

19. To Understand and Forecast Your Company’s Staffing Needs

After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion. Importantly your plan can not only help you understand your staffing needs, but ensure your timing is right as it takes time to recruit and train great employees.

20. To Uncover New Opportunities

Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business. It’s coming up with these ideas and executing on them which is often the difference between a business that fails or just survives and one that thrives.

Business Plan FAQs

What is a business plan.

A business plan is a document that details your business concept and strategy for growth.

A business plan helps guide your company's efforts and, if applicable, gives investors and lenders the information they need to decide whether or not to fund your company. A business plan template helps you to most easily complete your plan.

Why Do You Need a Business Plan?

A business plan provides details about your company, competition, customers and industry so that you make the best possible decisions to grow your company.

What is the Importance of a Business Plan?

The 3 most important purposes of a business plan are 1) to create an effective strategy for growth, 2) to determine your future financial needs, and 3) to attract investors (including angel investors and VC funding ) and lenders.

Why is a Business Plan Important to an Entrepreneur?

Business plans help entrepreneurs take their visions and turn them into tangible action plans for success.

Need help with your business plan? 

  • Speak with a professional business plan consultant from our team.
  • Use our simple business plan template .
  • Check out our business plan examples .
  • Or, if you’re creating your own PPM, you can save time and money with Growthink’s private placement memorandum template .
  • Learn more about us via our Growthink Business Plan Review page

The World’s #1 Business Plan Template

Would you like to know the quickest and easiest way to create a winning business plan?

And how to use it to raise funding, improve your strategy, or both?

Well, we’ve developed the ultimate business plan template to help you do this. Simply click below to learn more.

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Nine reasons why you need a business plan

Building a great business plan helps you plan, strategize and succeed. Presented by Chase for Business .

what business would you plan to establish why

Making the decision to create a new business is an exciting yet stressful experience. Starting a business involves many tasks and obstacles, so it’s important to focus before you take action. A solid business plan can provide direction, help you attract investors and ensure you maintain momentum.

No matter what industry you plan on going into, a business plan is the first step for any successful enterprise. Building your business plan helps you figure out where you want your business to go and identify the necessary steps to get you there. This is a key document for your company to both guide your actions and track your progress.

What is the purpose of a business plan?

Think of a business plan like a roadmap. It enables you to solve problems and make key business decisions, such as marketing and competitive analysis, customer and market analysis and logistics and operations plans.

It can also help you organize your thoughts and goals, as well as give you a better idea of how your company will work. Good planning is often the difference between success and failure.

Here are nine reasons your company needs a business plan.

1. Prove your idea is viable

Through the process of writing a business plan, you can assess whether your company will be successful. Understanding market dynamics, as well as competitors, will help determine if your idea is viable.

This is also the time to develop financial projections for your business plan, like estimated startup costs, a profit and loss forecast, a break-even analysis and a cash flow statement . By taking time to investigate the viability of your idea, you can build goals and strategies to support your path to success.

A proper business plan proves to all interested parties—including potential investors, customers, employees, partners and most importantly yourself — that you are serious about your business.

2. Set important goals

As a business owner, the bulk of your time will mostly likely be spent managing day-to-day tasks. As a result, it might be hard to find time after you launch your business to set goals and milestones. Writing a business plan allows you to lay out significant goals for yourself ahead of time for three or even five years down the road. Create both short- and long-term business goals. 

3. Reduce potential risks

Prevent your business from falling victim to unexpected dangers by researching before you break ground. A business plan opens your eyes to potential risks that your business could face. Don’t be afraid to ask yourself the hard questions that may need research and analysis to answer. This is also good practice in how your business would actually manage issues when they arise. Incorporate a contingency plan that identifies risks and how you would respond to them effectively.

The most common reasons businesses fail include:

  • Lack of capital
  • Lack of market impact or need
  • Unresearched pricing (too high or low)
  • Explosive growth that drains all your capital
  • Stiff competition

Lack of capital is the most prevalent reason why businesses fail. To best alleviate this problem, take time to determine how your business will generate revenue. Build a comprehensive model to help mitigate future risks and long-term pain points. This can be turned into a tool to manage growth and expansion.

4. Secure investments

Whether you’re planning to apply for an SBA loan , build a relationship with angel investors or seek venture capital funding, you need more than just an elevator pitch to get funding. All credible investors will want to review your business plan. Although investors will focus on the financial aspects of the plan, they will also want to see if you’ve spent time researching your industry, developed a viable product or service and created a strong marketing strategy.

While building your business plan, think about how much raised capital you need to get your idea off the ground. Determine exactly how much funding you’ll need and what you will use it for. This is essential for raising and employing capital.

5. Allot resources and plan purchases

You will have many investments to make at the launch of your business, such as product and services development, new technology, hiring, operations, sales and marketing. Resource planning is an important part of your business plan. It gives you an idea of how much you’ll need to spend on resources and it ensures your business will manage those resources effectively.  

A business plan provides clarity about necessary assets and investment for each item. A good business plan can also determine when it is feasible to expand to a larger store or workspace.

In your plan, include research on new products and services, where you can buy reliable equipment and what technologies you may need. Allocate capital and plan how you’ll fund major purchases, such as with a Chase small business checking account or business credit card .

6. Build your team

From seasoned executives to skilled labor, a compelling business plan can help you attract top-tier talent, ideally inspiring management and employees long after hiring. Business plans include an overview of your executive team as well as the different roles you need filled immediately and further down the line.

Small businesses often employ specialized consultants, contractors and freelancers for individual tasks such as marketing, accounting and legal assistance. Sharing a business plan helps the larger team work collectively in the same direction. 

This will also come into play when you begin working with any new partners. As a new business, a potential partner may ask to see your business plan. Building partnerships takes time and money, and with a solid business plan you have the opportunity to attract and work with the type of partners your new business needs.

7. Share your vision 

When you start a business, it's easy to assume you'll be available to guide your team. A business plan helps your team and investors understand your vision for the company. Your plan will outline your goals and can help your team make decisions or take action on your behalf. Share your business plan with employees to align your full staff toward a collective goal or objective for the company.  Consider employee and stakeholder ownership as a compelling and motivating force. 

8. Develop a marketing strategy

A marketing strategy details how you will reach your customers and build brand awareness. The clearer your brand positioning is to investors, customers, partners and employees, the more successful your business will be.

Important questions to consider as you build your marketing strategy include:

  • What industry segments are we pursuing?
  • What is the value proposition of the products or services we plan to offer?
  • Who are our customers?
  • How will we retain our customers and keep them engaged with our products or services and marketing?
  • What is our advertising budget?
  • What price will we charge?
  • What is the overall look and feel of our brand? What are our brand guidelines?
  • Will we need to hire marketing experts to help us create our brand?
  • Who are our competitors? What marketing strategies have worked (or not worked) for them?

With a thoughtful marketing strategy integrated into your business plan, your company goals are significantly more in reach.

9. Focus your energy

Your business plan determines which areas of your business to focus on while also avoiding possible distractions. It provides a roadmap for critical tradeoffs and resource allocation.

As a business owner, you will feel the urge to solve all of your internal and customers’ problems, but it is important to maintain focus. Keep your priorities at the top of your mind as you set off to build your company.

As a small business owner, writing a business plan should be one of your first priorities. Read our checklist for starting a business, and learn how to take your business from a plan to reality. When you’re ready to get started, talk with a Chase business banker to open a Chase business checking or savings account today.

For Informational/Educational Purposes Only: The views expressed in this article may differ from other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone and are not intended as specific advice/recommendation for any individual. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results.

JPMorgan Chase Bank, N.A. Member FDIC. Equal Opportunity Lender, ©2023 JPMorgan Chase & Co

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The Importance of Market Research

Creating a business plan, legal requirements, exploring funding options, crafting a marketing strategy, managing and growing your business, how do i start a small business for beginners, how do i create a business plan, what are six ways to grow and scale a business, the bottom line.

  • Small Business
  • How to Start a Business

Starting a Small Business: Your Complete How-to Guide

From market research to managing growth

what business would you plan to establish why

The U.S. is home to 33.2 million small businesses, which drive over 43% of GDP.   If you are looking to start a business, there are key factors to consider—from market research and creating a business plan to scaling your business. These factors are critical to your journey and can make a big difference no matter what stage of the process you are in.

Entrepreneurs who take concrete action can differentiate themselves from competitors, innovate, and grow. For successful entrepreneurs, the execution of the business is often what means the most. 

Key Takeaways

  • Starting a small business involves extensive market research of your target audience, competitors, and gaining a deep understanding of the industry.
  • It is important to build a comprehensive business plan that includes the product or service description, your target customers, financial projections, and all other key details.
  • Understanding the legal requirements of starting your business involves knowledge of business registration, permits, licensing, and other regulatory requirements.
  • There are various types of funding channels for starting a business, including financing it yourself, securing external funding from your network, and applying for government and corporate grants and loans. 

Being clear about your business goals involves doing your research. Successful entrepreneurs often do extensive research on their field. This includes understanding their prospective customers, the technical aspects of the industry, and the challenges other businesses are facing. 

Understanding how other players operate in an industry is important. Attending conferences, joining associations, and building a network of people involved in the field can help you learn how decisions are made. Often, comprehensive market research takes six months to a year. 

Understanding Your Target Audience

Knowing your target market is critical for many reasons. These are the customers who are most likely to purchase your product, recommend it to friends, and become repeat buyers. Apart from driving your bottom line, having a strong understanding of your target audience will allow you to tailor your offering more effectively, reach your customers more efficiently, and manage customer expectations.

Compiling demographic data on age, family, wealth, and other factors can give you a clearer understanding of market demand for your product and your potential market size.

It’s important to ask, “Why would someone buy this and part with their discretionary income?” or “Will someone love this enough to tell someone about it?” At the heart of these questions is understanding whether your business solves a key problem, as well as whether it delivers the “more” that connects to your audiences’ human emotions.

Assessing Market Trends and Opportunities

To find an advantage in a given market, look at key market trends in customer behavior and the business landscape. Explore the state of business conditions and consumer spending, along with the economic environment and how interest rates may affect financing and business growth.

Several resources are available to dive into market trends across industries, such as Statistics of U.S. Businesses and the U.S. Census Business Builder . To analyze the competitive landscape, and in turn, identify key opportunities, Porter's 5 Forces is a classic model to help businesses build their competitive strategy.

A business plan is a road map for achieving your business goals. It outlines the capital that you need, the personnel to make it happen, and the description of your product and prospective customers.

There are a number of models for creating a business plan. The Small Business Administration (SBA) , for instance, provides a format that includes the following nine sections:

  • Executive summary: This should be a description of your company and its potential for success. The executive summary can cover your mission statement, employees, location, and growth plan.
  • Company description: This is where you detail what your business offers, its competitive advantages, and your strengths as a business.
  • Market analysis: Lay out how your company is positioned to perform well in your industry. Describe market trends and themes and your knowledge of successful competitors.
  • Organization and management: Who is running your company, and how is your business structured? Include an organizational chart of your management team. Discuss if your business will be incorporated as a business C or S corporation, a limited partnership, a limited liability company, or a sole proprietorship. 
  • Service or product line: Here is where you describe how your business will solve a problem and why this will benefit customers. Describe how your product lifecycle would unfold.
  • Marketing and sales: Detail your marketing strategy and how this will reach your customers and drive return on investment. 
  • Funding request: If you're looking for financing, lay out the capital you’re requesting under a five-year horizon and where, in detail, it will be allocated, such as salaries, materials, or equipment. 
  • Financial projections: This section shows the five-year financial outlook for your company and ties these to your request for capital.

Having a coherent business plan is important for businesses looking to raise cash and crystallize their business goals.

Setting Goals and Strategies

Another key aspect of a business plan is setting realistic goals and having a strategy to make these a reality. Having a clear direction will help you stay on track within specified deadlines. In many ways, it allows companies to create a strategic plan that defines measurable actions and is coupled with an honest assessment of the business, taking into account its resources and competitive environment. Strategy is a top-down look at your business to achieve these targets.

Financial Projections and Budgeting

Often, entrepreneurs underestimate the amount of funding needed to start a business. Outlining financial projections shows how money will be generated, where it will come from, and whether it can sustain growth. 

This provides the basis for budgeting the costs to run a business and get it off the ground. Budgeting covers the expenses and income generated from the business, which include salaries and marketing expenses and projected revenue from sales.

Another important aspect of starting a business are the legal requirements that enable you to operate under the law. The legal structure of a business will impact your taxes, your liability, and how you operate.

Businesses may consider the following structures in which to operate:

  • Corporation
  • Limited Liability Company (LLC)
  • Partnership
  • Sole Proprietorship

Each has different legal consequences, from regulatory burdens to tax advantages to liability being shifted to the business instead of the business owner.

Registering Your Business

Now that you have your business structure outlined, the next step is registering your business . Your location is the second key factor in how you’ll register your business. In many cases, small businesses can register their business name with local and state government authorities. 

If your business is being conducted under your legal name, registration is not required. However, such a business structure may not benefit from liability protection, along with certain legal and tax advantages. Often, registering your businesses costs $300 or less.

Before filing, a business structured as a corporation, LLC, or partnership requires a registered agent in its state. These agents handle the legal documents and official papers on your behalf.

Businesses that are looking to trademark their product, brand, or business, can file with the United States Patent and Trademark Office.

Understanding Permits and Licenses

If your business conducts certain activities that are regulated by a federal agency, you’re required to get a permit or license. A list of regulated activities can be found on the SBA website, and includes activities such as agriculture, alcoholic beverages, and transportation.

There are many different ways to fund a business. One of the key mistakes entrepreneurs make is not having enough capital to get their business running . The good news is that there are several channels to help make this happen, given the vital role entrepreneurs play in creating jobs and boosting productivity in the wider economy.

Self-Funding vs. External Funding

Bootstrapping, the term commonly used to describe self-funding your business, is where companies tap into their own cash or network of family and friends for investment. While the advantage of self-funding is having greater control, the downside is that it often involves more personal risk.

External funding involves funding from bank loans, crowdfunding, or venture capital , among other sources. These may provide additional buffers and enable you to capture growth opportunities. The drawback is less freedom and more stringent requirements for paying back these funds.

Grant and Loan Opportunities

Today, there are thousands of grants designed especially for small businesses from the government, corporations, and other organizations. The U.S. Chamber of Commerce provides a weekly update of grants and loans available to small businesses. 

For instance, Business Warrior offers loans between $5,000 and $50,000 to small business owners. As another example, Go. Be. Elevate Fund offers $4,000 to grant recipients who are women and/or people of color business owners to help them grow their businesses.

When it comes to marketing, there is a classic quote from Milan Kundera: “Business has only two functions—marketing and innovation." In order to reach customers, a business needs a marketing strategy that attracts and retains customers and expands its customer base.

To gain an edge, small businesses can utilize social media, email marketing, and other digital channels to connect and engage with customers.

Branding Your Business

Building a successful brand goes hand in hand with building a great experience for the customer. This involves meeting the expectations of your customer. What is your brand offering? Is it convenience, luxury, or rapid access to a product? Consider how your brand meets a customer's immediate need or the type of emotional response it elicits. Customer interaction, and in turn loyalty to your brand, is influenced, for example, by how your brand may align with their values, how it shifts their perception, or if it resolves customer frustration.

Digital Marketing and Social Media

We live in a digital-first world, and utilizing social media channels can help your business reach a wider audience and connect and engage in real time. Given that a strong brand is at the heart of successful companies, it often goes without saying that cultivating a digital presence is a necessity in order to reach your customers. 

According to HubSpot’s 2023 report, The State of Consumer Trends, 41% of the 600-plus consumers surveyed discovered new products on social media and 17% bought a product there in the past three months.

Managing a business has its challenges. Finding the right personnel to run operations, manage the day-to-day, and reach your business objectives takes time. Sometimes, businesses may look to hire experts in their field who can bring in specialized knowledge to help their business grow, such as data analysts, marketing specialists, or others with niche knowledge relevant to their field.

Hiring and Training Staff

Finding the right employees involves preparing job descriptions, posting on relevant job boards such as LinkedIn, and effectively screening applicants. Careful screening may involve a supplemental test, reviewing a candidate's portfolio, and asking situational and behavioral questions in the interview. These tools will help you evaluate applicants and improve the odds that you'll find the people you are looking for.

Once you have hired a new employee, training is the next essential step. On average, it takes about 62 hours to train new employees. Effectively training employees often leads to higher retention. While on-the-job training is useful, consider having an onboarding plan in place to make the transition clear while outlining expectations for the job.

Scaling Your Business

Growing your business also requires strategy. According to Gino Chirio, executive vice president at the consultancy group Maddock Douglas, there are six ways that companies can grow their business to drive real growth and expansion:

  • New processes: Boost margins by cutting costs.
  • New experiences: Connect with customers in powerful ways to help increase retention.
  • New features: Provide advancements to your existing product or service.
  • New customers: Expand into new markets, or find markets where your product addresses a different need.
  • New offerings: Offer a new product.
  • New models: Utilize new business models, such as subscription-based services, fee-for-service, or advertising-based models.

With these six ways to grow a business, it is important to consider the risk, investment, and time involved. Improving your margins through new processes is often the most straightforward way to grow. Offering new features is also effective since it is tailored to your existing market with products you have already delivered.

By contrast, offering new products may involve higher risk since these have not been tested in the market. However, they may offer higher reward, especially if you have a first-mover advantage and release your product in the market before the competition.

A good place to start building a business is to understand the following core steps that are involved in an entrepreneur's journey : market research, creating a business plan, knowing the legal requirements, researching funding options, developing a marketing strategy, and business management.

A business plan is made up of a number of primary components that help outline your business goals and company operations in a clear, coherent way. It includes an executive summary, company description, market analysis, organization and management description, service or product line description, marketing and sales plan, funding requests (optional), and financial projections.

Business growth can fall into the following six categories, with each having varying degrees of risk and investment: new processes, new experiences, new features, new customers, new offerings, and new models.

Knowing how to start a small business involves the key steps of market research, setting up a business plan, understanding the legal requirements, exploring funding options, crafting a marketing strategy, and managing your business. 

For aspiring small business owners, these steps can help you successfully deliver your product or service to the market, and ultimately grow. While it can take a considerable amount of work, the payoffs are manifold: independence of work, personal fulfillment, financial reward, and following your passion.

U.S. Chamber of Commerce. " The State of Small Business Now ."

U.S. Small Business Administration. " Market Research and Competitive Analysis ."

U.S. Small Business Administration." Write Your Business Plan ."

U.S. Small Business Administration. " Choose a Business Structure ."

U.S. Small Business Administration. " Register Your Business ."

U.S. Small Business Administration. " Apply for Licenses and Permits ."

U.S. Small Business Administration. " Fund Your Business ."

U.S. Chamber of Commerce. " 52 Grants, Loans and Programs to Benefit Your Small Business ."

Ogilvy. " Behind Every Brand Is a Great Experience, and Vice Versa—Why Today's Customer Expects Synergy ."

HubSpot. " The State of Consumer Trends in 2023 ."

Training Magazine. " 2022 Training Industry Report ."

Harvard Business Review. " The Six Ways to Grow a Company ."

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  • Partnership: Definition, How It Works, Taxation, and Types 19 of 25
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30 Compelling Reasons to Start a Business

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Lisa Furgison

13 min. read

Updated October 25, 2023

Are you toying with an idea for a business? A lot of people think about starting a business, but for whatever reason the idea never becomes a reality. If you’re an entrepreneur who is on the fence about starting a business, we have the encouragement you need to take the first step.

We asked 30 business owners to offer persuasive reasons for entrepreneurs to launch a business.

  • Reason #1: Work on things that matter to you

When you own your own business, you get the freedom to work on projects that have meaning in your life, says Sarah O’Toole, owner of The Seasonal Diet,  a business that helps people eat healthy.

“Being an entrepreneur means that I get to work on things that really light me up inside,” she explains. “I’m not stuck doing busy work or tasks that no one else wants to do.”

Connect on Twitter:  ‪@TheSeasonalDiet ‪

  • Reason #2: Get a personal education

Starting a business comes with a lot of on-the-go lessons, but Jeremiah Boehner, a serial entrepreneur and senior director of sales at MyLikes,  an advertising platform, says the most important lessons are those that teach you about yourself.

“As an entrepreneur, you’ll learn what kind of work you enjoy and start to understand how you can make a difference in your community,” he says.

Connect on Twitter:  @sfboehner   @MyLikes

  • Reason #3: Make more money

As an employee, there are limits to how much money you’ll make. You are defined by a line item in an accounting ledger, says Matthew Reischer, CEO of the website  Lawyer Reviews,  a site that welcomes feedback on lawyers across the country.

“An entrepreneur who starts his own business can break free from this actuarial perspective and redefine the value he brings to the market,” he says.

Connect on Twitter:  @LegalAdvice

  • Reason #4: Job security

While some people would argue that working an office job in the 9-5 world has more security than starting your own business, Nick Loper, owner of Side Hustle Nation,  a company that helps people earn money outside of their day jobs, says diversifying your income with various clients is a smart play.

“Is starting your own business really any riskier than relying on one source of income for your livelihood?” he asks.

Connect on Twitter:  @nloper

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  • Reason #5: Flexible schedule

Want to go to a baseball game in the afternoon? Does your child have a doctor’s appointment in the morning? If you start your own business, you’ll have the flexibility to do all of these things. For Will von Bernuth, co-founder of Block Island Organics,  a family-run sun care startup, the flexible schedule allows him to help his parents.

“With our parents getting older, living far away, and one of them having health difficulties, the ability to work from wherever we want on our own schedule is a huge benefit,” he says.

Connect on Twitter:  @BIOSuncare

  • Reason #6: Cash in on tax benefits

There are some monetary incentives to starting a business as well, says Fernando Campos, co-founder of Topwick,  a members-only journal site that offers insider pricing on certain brands.

“There are tax incentives that you couldn’t take advantage of without a business,” he says. “As an owner, you can write off things like travel, food, and cell phone bills.”

Connect on Twitter:  @fmcampos ‪@topwick

  • Reason #7: Fill a void in the community

Offering a product or service that is lacking in your area is a great reason to start a business, Drew Phillips, owner of The Angry Beaver, a gay/straight hybrid bar in West Virginia, says.

“Me, my wife, and two best lesbian friends decided to open a new gay/straight hybrid pub to fill the void when our favorite lesbian bar closed down,” he says. “The community and the public response have been phenomenal.”

  • Reason #8: Everyday brings new challenges

If you’re tired of the routine that often comes with a cubicle job, starting a business offers a way to break free, Sean Dudayev, founder of InsureChance,  an independent online life insurance agency, says.

“By starting your own business, you escape the stagnation of life. It never really feels old, there are always new challenges to face, and you never stop learning,” he says.

Find InsureChance on Facebook!

  • Reason #9: Surround yourself with good people

Starting a business means you get to select the people you work with, which Jeremy Durant, co-founder of Bop Design,  a marketing agency, says is one of the biggest reasons to start a business.

“You have complete control over not only employees and vendors, but most importantly, clients. You can hire or fire people based on your own guidelines and work only with people who are a good personality fit,” he says.

Connect on Twitter:  @bopdesignsd

  • Reason #10: Acquire the quality of life you want

One of the biggest reasons that Andrew Bliss, founder of The Adventurous Mailbox,  wanted to start his own business was the geographical freedom that came with it. The business, which introduces cultures to kids through books and other products, is run from Tainan, Taiwan.

“If you want to live abroad or in a new region of your own country, that is entirely possible when you have your own company,” he says. “Starting your own company does not need to be only about realizing profits, but rather realizing the life you envision for yourself, wherever that may be.”

Find The Adventurous Mailbox on Facebook!

  • Reason #11: Take on a career in a completely different field

If you’re ready for a 180-degree career change, you can make it a reality by starting your own business. Shelley Hunter went from a systems analyst to the spokesperson for GiftCards.com,  a website she started under a different name and was able to sell. She remains its spokesperson.

“It’s a radical departure from what I was doing, but taking that leap gave me a great new career and the flexibility to work from home and be near my three kids,” she says.

Connect on Twitter:  @GiftCards_com

  • Reason #12: Never work a day in your life

Running a business that you’re passionate about won’t require a 20-minute pep talk to convince yourself to go to work, says Michael Lazar, owner of TrueShip,  a shipping software company.

“Love what you do and do what you love,” he says. “If you do that, you’ll never work a day in your life.”

  • Reason #13: Tap into hidden creativity

When clinical social worker Karen Koenig started her own practice, she realized she had a ton of untapped creativity. That quality encouraged her to branch out of the traditional psychotherapist role and into coaching those with eating disorders.

“Working for other people squashed my creativity; working for myself puts no limits on me,” she says.

Connect on Twitter:  @KarenRKoenig

  • Reason #14: Startup resources are plentiful

Kyle Ems, founder of SeniorCareBox, a web-based company that helps customers send care packages to seniors, says there is no shortage of help available to new entrepreneurs.

“The amount of free or affordable resources available online or at startup incubators has never been greater,” he says.

  • Reason #15: Turn your vision into reality

Have a great idea for a business? Turning that idea into an actual thriving business is quite rewarding, says Nabeel Mushtaq, co-founder of AskforTask,  a Canadian startup that connects users with one another to create jobs.

“If you believe in your business model and it is something the world needs, starting a business is an effective way to ensure your vision is achieved,” he says.

Connect on Twitter:  @askfortask

Reason #16: Be the boss you’d want

We’ve all had a terrible boss or two, but launching your own business allows you to be the kind of boss you’d like to work for. Nima Noori, CEO of Toronto Vaporizer,  an online outlet for vaporizers and accessories, makes sure his employees are happy.

“I can confidently say that after five years of being in business with a tight knit team of 15 and an extremely low turn-over rate, we are working at being not only happier in the environment I created, but doing so profitably,” he says.

Connect on Twitter:  @TorontoVaporize

  • Reason #17: Overcome a layoff

Many people start a business after losing a job. That was the case for Felena Hanson, who founded Hera Hub,  a co-working space designed around female entrepreneurs, after she was laid off.

“I ventured into entrepreneurship in 2003, when I fell victim to my third layoff within a six year time span,” she says. “I started my own business and haven’t looked back since.”

Connect on Twitter:  @HeraHub   ‪@FelenaHanson

  • Reason #18: Create a sellable asset

If you create and grow a business,  you’ll have something you can make some money on down the road, Natasha Courtenay-Smith,  a business mentor, says.

“Just like buying a house, a business that is built correctly and grown becomes an asset that has value,” she says. “And just like any other asset (like your house or a piece of art) it can be sold.”

Connect on Twitter:  @Tash_Courtenay

  • Reason #19: Join the wave of the future

Neil Jacobs, a former business psychologist and current curator of online art gallery  The Road Gallery,  believes startups are the future of business.

“Ask a college graduate today about their career aspirations and they are more likely to talk about working for themselves, setting up a business, and being an entrepreneur than they are to say they want to be chained to a desk, working 14 hour days for a faceless corporation,” he says.

  • Reason #20: Spend more time with your children

Working a normal job takes up a lot of time. Add overtime and commute time to a normal eight-hour workday and the time left for your family is fairly limited. That’s why Marc Anderson started offering English lessons online through the website  TalktoCanada.

“My wife and wanted to be home with our two boys as they grow up so we started our business,” he says. “We definitely didn’t want to be tied to a 9-5 job and maybe be able to see our kids for a few hours a day.”

Find TalktoCanada on Facebook!

  • Reason #21: Create a legacy

Launching your own business means you’ll have something to pass on to your kids, says Billy Bauer, owner of Royce Leather,  a company that sells handmade leather accessories.

“If you’re a doctor, plumber, or bus driver, it’s hard to imagine you passing your career on to your loved ones,” he says. “But if you own your own business, that’s something you can pass on to the next generation. And be proud of it, because you created it.”

Find Royce Leather on Facebook!

  • Reason #22: Share your talents with others

Lisa Hennessy started Your Pet Chef because she wanted to share her love for dogs with others.

“I love to see our dogs so excited at meal time and I just love to hear stories from my customers when the same thing happens at their house,” she says. “It makes me feel so good and motivates me to continue on this journey.”

Find Your Pet Chef on Facebook!

Reason #23: Delegate responsibilities that you don’t like

Being a business owner means you have the power to focus on aspects of the business that you want. You can delegate the other duties to others, says Diane Villavieja, a serial entrepreneur and current consultant for Nomad Financial.

“Bookkeeping and financial planning are probably the most common uninspiring tasks for a business owner and therefore ignored, but can have a profound effect to the success of a business,” she says. “Delegate these dreary tasks to experts who can help create a plan for growth while you focus on your strengths.”

Connect on Twitter:  @NomadFinancial

  • Reason #24: The internet offers more sales possibilities

To run a business, you need customers. Anne Marie Blackman, owner of My Ugly Christmas Sweater,  an ecommerce site that sells fun and tacky holiday clothing, says finding customers has never been easier with the internet by your side.

“The internet provides a universal business platform for which the traditional old fashioned requirements for brick and mortar, location, employees, and advertising do not apply,” she says.

Find My Ugly Christmas Sweater on Facebook!

  • Reason #25: Personal fulfillment

Nothing offers the kind of personal fulfillment that can be found in owning a business, says Christopher Rither, founder of One Mean Dream,  a site that helps people achieve their goals in life.

“When people decide to use their talents to start a business, they often find personal fulfillment because their abilities now serve a purpose,” he says.

Find One Mean Dream on Facebook!

  • Reason #26: Build a variety of skills

From accounting to marketing and everything in between, the variety of skills you’ll learn as an entrepreneur is endless, Brandon Kelly, founder of design firm NYCVanity, says.

“It allows you to exercise and refine all of your muscles. When you work for other people your contributions are usually confined and limited to one or a few different skills,” she says.

Connect on Twitter: ‪@BrandonNKelly

  • Reason #27: Keep someone else from taking your idea

If you sit on a business idea, someone else could come along and capitalize on it before you do. That’s why Karen Tsoi, founder of fashion startup  Pastel Dress Party  started her business.

“I didn’t want to look back and regret not taking advantage of the opportunity at the right time,” she says.

Find Pastel Dress Party on Facebook!

  • Reason #28: Create the atmosphere you want

Not everyone thrives in a bustling, cliquey office setting. Everyone’s different and by starting a business you can create the atmosphere that you thrive in, says Thea Orozco, owner of Introvertology,  a business that offers coaching lessons for introverts.

“Introverts can escape the horror of open-office plans and create a working environment that works with their temperament rather than against,” she says. “While extroverts can work with their strengths in the way they acquire and interact with clients, rather than a way dictated by an employer.”

Connect on Twitter:  @introvertology

  • Reason #29: Be a rock star

Most of us won’t become an NFL hotshot or a famous singer, but creating a business can give you a sense of fame, author Lee Silber  says.

“Starting a business is like being famous, if only in our own field or for our family and friends,” he says. “It makes you special to others.”

Connect on Twitter:  @leesilber

  • Reason #30: Own your decisions

How many times has your boss made a decision that you disagree with? Running your own business means you make the decisions. Whether they are good or bad, you’ll stand by your choices, Ben Guez, founder of Ophis, a leather electronic cigarette seller, says.

“Being an entrepreneur means making your own choices, if you fail it’s on you, but if you succeed it’s because of you,” he says.

Connect on Twitter:  @OphisVape

What other reasons are there to start a business?  Add to our list in the comment section below.

Clarify your ideas and understand how to start your business with LivePlan

Content Author: Lisa Furgison

Lisa Furgison is a multimedia journalist with a passion for writing. She holds a graduate degree in mass communications and spent eight years as a television reporter before moving into the freelance world, where she focuses mainly on content creation and social media strategies. Furgison has crisscrossed the U.S. as a reporter, but now calls Key West, Florida home. When she's not conducting interviews or typing away on her laptop, she loves to travel.

what business would you plan to establish why

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  • Reason #16: Be the boss you’d want
  • Reason #23: Delegate responsibilities that you don’t like

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Thinking of starting your own business? Congratulations. The entrepreneurial itch is just beginning.

You might have a reason for wanting to start your own business, like capitalizing on an opportunity or fulfilling a need in your community. Or you might have no idea why this sensation is pulling you. That’s OK.

There’s no right or wrong motivation for wanting to start your own business. Whether you’re trying to escape the 9-to-5 or just want to make more money, every reason is valid.

At Foundr, we’re passionate about inspiring entrepreneurs and giving you the tools and know-how you need to succeed. Below, we’ve compiled 19 reasons for you to start your own business. Consider this your justification (or community-backed excuse) for making your business-owning dream a reality.

Why Start Your Own Business?

Next time your in-laws and co-workers ask what the heck you’re doing, just send them a link to this page.

Table of Contents

1. Control Your Schedule

2. create your ideal workspace, 3. make more money, 4. pursue a passion, 5. feel alive, 6. escape the corporate rat race, 7. discover your purpose, 8. be your own boss, 9. build your own career, 10. learn new skills, 11. start from scratch, 12. tax incentives, 13. be creative, 14. solve a need, 15. build a team, 16. build a brand, 17. create job security, 18. give back ​​to the community, 19. because you want to, starting a business faqs.

Tired of being told what to do and when to do it? When you start your own business, you get to be as flexible as you want. Sleep in, stay up late, work half days, or take off every Friday—it’s up to you.

The early days of your business will be busy, but you’ll eventually gain more spare time as you scale and learn to delegate.

Need to make an important family event but swamped with work? Take off a weekday and replace it with a weekend. Feeling burnt out and needing some extra sleep? Work 12 to 8 instead of 9 to 5.

Eventually, you might feel comfortable with your income and scale back your time working. You may live comfortably off 20 hours of work and take the rest off.

The inverse is true, too. You might want to deep dive into your work and pour your heart and soul into it—you can do that, as well. You get to control your schedule.

More importantly, the flexibility of starting your own business means you’ll get out what you put in. If you want to build the next tech giant or simply create an agency so you can spend more time with your family, you’re in control. Every hour you spend on your business is valuable.

Don’t be constrained by the fluctuating rules (and trends) of workspace policies. Small businesses and corporations alike often require you to work in determined locations. Even “remote” policies often have red tape that demand you live in specific geographic areas.

When you’re the business owner, you can work from your home, a co-working space, an office, or even the local coffee shop. You can take your work with you on the go, whether that’s the stereotypical beachside resort (please don’t get sand in your laptop) or the back of an RV on a nationwide road trip.

What’s your dream workspace? Is it a loft space with a ping-pong table? What about a giant corner office? Or maybe, it’s working at a collaborative coworking space or incubator?

You get to decide.

Unless you’re on commission, there’s likely a cap to your full-time income. You’re given a salary (regardless of your input or performance), and the only way to get beyond that is maybe with an end-of-year bonus. Plus, the time it takes to get to mid-level management, even in the most progressive of organizations, can take years of loyalty and corporate-culture assimilation.

When you start your own business, you get to decide how much money you make. Need more cash? Work longer hours or charge higher prices. Want more free time? Scale back your work and make less income.

It’s all up to you. Here are examples of how you can increase your earning potential as a business owner versus a traditional job:

  • Start an agency and set your own hourly rates >  Asking your manager for an annual salary bump
  • Sell your solution and get credit > Solving a problem for someone else’s business
  • Become an expert in an industry under your brand > Move up the corporate ladder under one organization

There’s no cap on your salary as a business owner. You can always make more money and scale your business .

Do what you really want to do. Pursue something that makes you happy or something you care about. There’s no wrong passion.

Want to fulfill your dream of being an artist? It’s a long road ahead of you, but it’s your dream to chase. Want to become a ski mountaineering guide? Take the risk and go for it.

Starting your own business lets you create fulfillment rather than find it.

More than 60% of Americans work in jobs they dislike . You can avoid this fate by doing something you genuinely care about. And once you get to that place, is it really “work” anymore?

Use the Ikigai method to turn your passion into profit:

  • What are you good at?
  • What do you love?
  • What does the market need?
  • How do you extract that value?

When you’re the boss, you get to decide when to take risks and when to lay back. You’re going to have “high highs” and “low lows,” but you ultimately get to decide whether it’s going to be a dull day. Instead of punching in and punching out, you’re truly living each day to the fullest.

Starting a business is exciting and nerve-wracking . You’re going to lose sleep at times, and other nights you’ll sleep soundly after an adrenaline-packed day.

For better or worse, there’s a bit more on the line every day when you’re fully responsible for your income. Mediocre performance isn’t good enough anymore, and there’s something downright rewarding about that.

So, how do you know if you’re feeling alive in your current career? Here are a few indicators we’ve learned about what it means to feel alive as a business owner:

  • On Friday evening, you look forward to going to work on Monday morning.
  • Your skills are being used to the best of your abilities.
  • You’re excited when someone asks, “what do you do?”
  • Every day you learn something new.
  • You’re the best version of yourself.

If this doesn’t sound like your career right now, then it might be time to take the first step toward feeling alive.

Top 5 Businesses to Start in 2022 | Top Business Ideas

Ditch the corporate bureaucracy and get out of the game. No more cheesing up to bosses while you gain tenure, and no more following a career path that’s leading you nowhere. For many, starting their own business is a means to escape the rat race. In this case, you’re starting a business not to get something (money, passion, freedom) but to get away from something (the rat race).

True security doesn’t exist when you’re beholden to a corporation whose priority is keeping shareholders happy. As a business owner, you always get to show that you’re in control of your life and career—not the economy, a pandemic, or the unemployment rate. Losing your job can be catastrophic, so it’s no wonder that millions upon millions are now turning to side-hustles and startups to keep their finances afloat during uncertain times.

Read this article to learn how Hala Taha left her corporate career to build a media empire.

Ever feel like you have no purpose at work? Are you grinding day in and day out for a paycheck? Starting a business can bring fantastic meaning and purpose to your life—and that’s different than becoming a workaholic.

When you discover your purpose and build a business around it, you’re not working anymore—instead, you’re fulfilling a dream.

Freedom, pride, excitement, and commitment collide to make meaning—that sense of purpose, of drive, of overwhelming worth. We can all agree that a life full of meaning is a desirable outcome (and it doesn’t have to live as a daydream).

You call your own shots. You get to set the rules. You get to choose everything:

  • Who do you work with
  • Prices you charge
  • Marketing strategies
  • Who you hire
  • Who you fire
  • Where you operate
  • When you operate
  • How you operate

You never have to worry about someone making poor or insensitive decisions that hurt you. However, you’re now in the position where all the responsibility sits on your shoulders. When you are your own boss, it can be a heavy load to bear, but it’s one worth bearing.

Set your own career trajectory instead of letting your manager or human resources team tell you where you’re headed. Sure, you’ll start at the top of the chain (hello, CEO), but you can shift your direction as time goes on.

For example, you may decide to hand over the day-to-day operations to a manager or you might hire a CEO to run your business while you fill a role you’re more passionate about.

It’s not uncommon for founders to give up the mantle of CEO to another individual so they can pursue another passion. The best part about starting your own business is that you get to decide if you even want to consider that option. Here are some ways a business owner can grow their career:

  • Be a lifelong founder and CEO with complete control
  • Handoff day-to-day responsibilities to a CEO but still make major decisions
  • Build your business so you can exit for a major payday
  • Sell your business and start a new business

There are no limits on your career as a business owner. Read how Marc Lore navigated his career as a serial business owner and why he plans to never stop.

Build Your Business with our Training series button

Your original corporate job likely wanted you to do one thing exceptionally well—whether that’s headhunting, email marketing, sales, or product road mapping. When you start a business, you get to do it all.

Over time, you’ll begin to delegate these responsibilities. However, on day one, you’ll likely wear all the business hats—and there’s a lot you’re going to learn .

It’ll feel a bit overwhelming at times, but you’re going to learn and grow quickly. You’ll acquire new skills and discover innate talents, and you’ll learn what you never want to do again.

In this position, you’ll get to rapidly explore career opportunities and dive into foreign subjects. You may discover that Search Engine Optimization is your new passion, and you might find sales is your worst nightmare. You’ll get a taste of all of it, and then you’ll get to decide which responsibilities you keep and delegate.

There’s something rewarding about building a business from the ground up. Sure, it’d be nice if you could start with a profitable business that’s raking in 6-figure revenue numbers, but where’s the challenge and fulfillment in that? Here are the benefits of starting a business from scratch:

  • Create a unique brand identity
  • Become a disruptor in a market
  • Create a business that aligns with your values
  • Reach a new audience

When you start your own business, you start with a blank canvas. You get to decide everything from the business name to the brand voice to the core product. It’s a rollercoaster of a ride, but you’re the one in the driver’s seat.

Taxes likely won’t be a reason to start a business, but it’s definitely a notable perk. As a small business owner, you may be able to get tax benefits that help your business–and even tax breaks that ultimately help you as an individual.

You’ll have the opportunity to deduct things like magazine subscriptions, phone services, travel mileage, membership in professional organizations, and even part of your rent. And if you need anything to run your business, there’s a good chance it qualifies as a deduction.

The IRS also helps mitigate risk for American entrepreneurs. For example, you can write off any losses from your business, which means that a side business could help your tax return.

Tax laws vary between countries and states, so do your research and talk to a professional accountant.

There’s no single right way to run a business. Yes, there are proven techniques and strategies, but that’s not to say they’re the only way to be successful.

Be creative. Explore new ideas. Do something that no one has ever done before.

Creativity could be in the products and services you deliver or in the company culture you build . It could be in your work policies, or it could be in how you give back to the community.

Don’t take yourself too seriously—have some fun here and there.

Many entrepreneurs begin their journey so that they can solve a need they recognize . For example, Brian Chesky and Joe Gebbia founded Airbnb because they struggled to afford rent in New York City and decided to rent out their floorspace to conference attendees.

What needs do you want to solve? They could be as big as climate change or as tiny as a lack of chicken wing options in your town—each is an opportunity to build a business. Here’s a list of needs and problems you can solve through a business:

  • Improve a system in workflow management or manufacturing.
  • Create a product that hacks everyday problems.
  • Create a product that is specialized for a niche audience.
  • Start an agency that helps other businesses in marketing, advertising, or design.
  • Build a brand that offers unique content experiences.
  • Start the first coffee shop in your small town.

Most importantly, find a problem that you’re passionate about solving. Check out this story about how Samantha Brett created an SPF skincare solution that could be sprayed over makeup without getting sticky or runny.

The Unlikely Rise of Airbnb | $31B EMPIRE

Have you ever asked, “how did that person get hired?” Say goodbye to those questions.

When you work for someone, you don’t have control over who your co-workers are. As a business owner, you can build a team that you want to work with.

Put your “Moneyball” hat on and start building the ultimate startup team . You’ll get to decide who you work with every day, and you’ll also have the privilege (and responsibility) of providing for these individuals’ livelihood.

There’s no right or wrong way to go about building your team. You might start with your little sister and cousin, or you might jump straight to hiring a web developer you’re never met.

Add teammates to the team when it makes sense, and cut those who are hurting the business. As the CEO and coach, you get to decide who joins the team.

When you work at an agency or large corporation, you often become another cog in the machine. Your name is detached from your work, and your personal brand plateaus while you contribute to building another person’s dream.

Starting your own business puts your name back on the map. As your business grows, so will your personal brand—and vice versa. Getting recognized might not be the reason you start a business, but it sure beats getting a meaningless certificate for another quarter of balanced budgets.

Take Elon Musk. His personal brand transcends Tesla or SpaceX. If those businesses went under tomorrow, he could start a brand-new successful business with his name alone. That’s the power of personal branding .

Climbing the corporate ladder is a path full of unknowns. Due to no fault of your own, you could lose your job tomorrow due to downsizing, a shift in the economy, or a grumpy manager who just doesn’t like you.

When you start your own business, you’re in charge of these life-altering decisions. Yes, your business still has a chance to tank, but you’re not a helpless bystander—you’re the one investing in its future. Your destiny is in your own hands.

Plus, once you’ve built a business, you’ll have acquired a whole new suite of valuable skills. You’ll be in an even better position to start another successful business. And if worst comes to worst, you’ll have new talents that’ll make you a more marketable employee for any company.

We live in a world rife with problems, and often a lack of funding causes those problems. A successful business would put you in a place to do something about the issues you see and care about.

You could even embrace social entrepreneurship and focus your efforts away from market value and toward social value.

Start a business to help young people through challenging times or launch a startup to assist single parents. When you focus on doing good instead of making money, everyone usually wins.

Your business doesn’t have to be built around doing good, though—that can just be a byproduct. For example, one could argue that Facebook doesn’t do a whole lot of good. However, the business donates millions of dollars to charities worldwide, and that’s definitely doing some good.

And that’s a good enough reason. You could write a book about all the reasons you should start a business, and someone else could probably write another one with all the reasons you shouldn’t.

That’s just the way life goes.

In the end, if you feel the pull to head out on your own and start a business, it’s never a bad idea to accept the call. You can always start a side hustle without quitting your 9-to-5 and build out the concept with little-to-no risk.

Just wanting to start your own business is reason enough—never discount that.

Game changing advice button

We get a lot of questions about starting a business. Here are some of the most common ones we hear from our foundr family.

Will I make money if I start my own business?

It depends on the type of business you start. For example, if you build a patented device for electric vehicles, your business will take lots of time and money to launch. In contrast, if you work at a company as a digital marketing specialist and want to start an agency, it will only cost a new website on Squarespace. Part of the risk of starting your own business is that it will have a high potential to win and fail. Ask yourself if the risk of not trying is greater than failing.

Should I start a business by myself or with a cofounder?

Do you want to start a business for complete autonomy? Are you sick of answering to a manager or team member? If yes, then working with a cofounder might not be the best idea. Cofounders usually find each other organically, but if you're seriously worried about going it alone, make sure you find a cofounder who compliments your strengths.

Is it better to start a business as a side hustle?

To answer this question, you'll have to include your situation. Critically you need to understand 2 factors in deciding whether to rip off the Band-Aid and go all-in on your business. One, is how much time do I have? Two, how much financial flexibility do I have? If your evenings are typically free, there's plenty of time to work on your business outside your 9-to-5. Or, if you've been saving for 2 years to start your business, put in your 2 weeks notice and get started. Most of us have limitations on time or finances. It's up to you to figure out what levers you need to pull to get your business going. The best time to start your business with yesterday. Don't get stuck on the first step. Take it.

How can my business be successful?

Only YOU can answer this. Define success for your business and decide what you are willing to do to reach it.

Starting Your Own Business? Here’s What You Need

Excited about starting your own business? You’re in the right place. We have all the resources you need to get started, and they’re all in one place.

Check out our catalog of free masterclasses. You can learn everything from launching a successful side hustle to growing a massive Instagram following. These courses are taught by professionals who’ve been there, done that. They’re not gurus teaching elusive secrets of the trade—they’re doers sharing real-life advice from lessons learned along their own journeys.

Peek at what’s available , and take the first steps to start your own business. Your future self will thank you later.

Exclusive free training

About Jesse Sumrak

Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night (and early early morning), you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado.

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50 Reasons to Start Your Own Business If you're considering becoming an entrepreneur, don't forget all the benefits that go along with it.

Feb 23, 2015

Some people are destined to be entrepreneurs. From the time they get through school, or maybe even before that, they're hungry to start a business and lead it to success, and they'll stop at nothing to make that dream a reality .

Related: 3 Steps to Eliminating the Barriers to Becoming Self-Sufficient

For others, starting a business is a scary, intimidating notion . There are too many unknowns to take the plunge. But if you're considering becoming an entrepreneur, don't forget all the benefits that go along with it:

1. Flexibility. Work your own hours.

2. More spare time (eventually). Spend more time with your family and friends. But note : This is only applicable once your business is established and you have employees handling the majority of necessary responsibilities. Don't expect to have more spare time until you reach this point. In fact, expect to have much less.

3. Call the shots. Nobody else is going to set the rules. You are.

4. Set your own deadlines. No more last-minute rushing unless you want to do it.

5. Sell how you want to sell. Online? In person? Inbound? Outbound? It's your call.

6. Create your own environment. You can set the formality and culture of your organization.

7. Pursue your passion. You can do what makes you happy.

8. Create something from scratch. Watch your organization grow from start to finish.

9. Meet new people. Network with other entrepreneurs and professionals.

10. Build a team. You decide who to hire and bring into your company.

11. Create jobs. Improve the economy with new job opportunities.

12. Help people. Use products and services to improve people's lives.

13. Become an expert. Learn the ropes of your industry through first-hand experience.

14. Invest in yourself. You take the risk, and you'll gain the rewards.

15. Make more money. If you want a pay raise, you can give yourself one.

16. Financial independence. No one else is signing your paychecks.

17. Tax benefits. Write off your biggest expenses Note: while you do get to write off lots of expenses as an entrepreneur, beware the " self employment tax ."

18. New challenges every day. Find new ways to stimulate your mind.

19. Get exposed to new cultures. Discover new perspectives and approaches.

20. Discover new fields. Delve deeper into your industry.

21. Create an asset. Give yourself something sellable to hedge your bets.

22. Connect with your clients. Forge real, personal connections.

23. Delegate boring tasks. Don't do anything you don't want to.

24. You can stop working. Work you enjoy doing can't be described as "work."

25. The power to give. Have the power and flexibility to donate time or money to worthy causes.

Related: The 8-Step Battle Plan to Succeed as an Entrepreneur

26. Get involved in the community. Participate actively in your neighborhood and region.

27. Improve your industry. Push your industry forward with new innovations and ideas.

28. Get a mentor. Meet valuable, insightful mentors and learn from them.

29. Become a mentor. Take your own knowledge and experience, and mentor someone else.

30. Learn new skills. Branch out in new departments.

31. Attend new classes and seminars. Constantly refine your skillset and stay updated.

32. Have a big office. If you want the biggest office in your workplace, it's yours.

33. Work from anywhere. Work from home, an office or a beach if you so choose.

34. Have the option for multiple ventures. Start another business when you're done with this one.

35. Gain entrepreneurial experience. Being an entrepreneur makes you a better professional in almost any position.

36. Get recognized. Start earning name recognition and build a reputation.

37. Get things done faster. Set your own efficiency rates.

38. Build a personal brand. Take the time to develop your personal brand, and tie it into your business's.

39. Get more creative. Create your own opportunities and your own solutions.

40. Inspire others. Serve as an example for other people to follow their dreams.

41. Reduce your commute. Find an office space closer to your home.

42. Have more job stability. Never worry about being laid off or fired.

43. Find pride and fulfillment. Finally start taking pride in the work you're doing.

44. Reach your dreams. If you've ever dreamed of being wildly successful, this is your chance.

45. Learn to embrace failure. Even if you fail, you'll walk away with new skills and more experience you never had before.

46. Have a great story to tell. It will be a fun story for your grandchildren one day, win or lose.

47. Leave something behind. Pass the business down to your children and grandchildren.

48. Change the world. It may seem like a lofty goal for you right now, but your business really could change the world.

49. Resources are plentiful. With the dominance of the Internet, it's easier than ever to find resources you need, including startup capital, loans, grants and even mentors.

50. There's nothing stopping you. What's really keeping you from being an entrepreneur? Of course there are risks, but there's nothing forcing you not to take them .

If you want to become an entrepreneur, there's nothing really holding you back. Take the leap, and lead the company you've always wanted.

If you decide to take the leap, be sure to grab my ebook to help with your growth, The Definitive Guide to Marketing Your Business Online .

Related: 10 Reasons Why 2015 Will Be the Year to Start Your Business

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  • 7.4 Start Your Own Business
  • Introduction
  • 1.1 What Do Managers Do?
  • 1.2 The Roles Managers Play
  • 1.3 Major Characteristics of the Manager's Job
  • Summary of Learning Outcomes
  • Chapter Review Questions
  • Management Skills Application Exercises
  • Managerial Decision Exercises
  • Critical Thinking Case
  • 2.1 Overview of Managerial Decision-Making
  • 2.2 How the Brain Processes Information to Make Decisions: Reflective and Reactive Systems
  • 2.3 Programmed and Nonprogrammed Decisions
  • 2.4 Barriers to Effective Decision-Making
  • 2.5 Improving the Quality of Decision-Making
  • 2.6 Group Decision-Making
  • 3.1 The Early Origins of Management
  • 3.2 The Italian Renaissance
  • 3.3 The Industrial Revolution
  • 3.4 Taylor-Made Management
  • 3.5 Administrative and Bureaucratic Management
  • 3.6 Human Relations Movement
  • 3.7 Contingency and System Management
  • 4.1 The Organization's External Environment
  • 4.2 External Environments and Industries
  • 4.3 Organizational Designs and Structures
  • 4.4 The Internal Organization and External Environments
  • 4.5 Corporate Cultures
  • 4.6 Organizing for Change in the 21st Century
  • 5.1 Ethics and Business Ethics Defined
  • 5.2 Dimensions of Ethics: The Individual Level
  • 5.3 Ethical Principles and Responsible Decision-Making
  • 5.4 Leadership: Ethics at the Organizational Level
  • 5.5 Ethics, Corporate Culture, and Compliance
  • 5.6 Corporate Social Responsibility (CSR)
  • 5.7 Ethics around the Globe
  • 5.8 Emerging Trends in Ethics, CSR, and Compliance
  • 6.1 Importance of International Management
  • 6.2 Hofstede's Cultural Framework
  • 6.3 The GLOBE Framework
  • 6.4 Cultural Stereotyping and Social Institutions
  • 6.5 Cross-Cultural Assignments
  • 6.6 Strategies for Expanding Globally
  • 6.7 The Necessity of Global Markets
  • 7.1 Entrepreneurship
  • 7.2 Characteristics of Successful Entrepreneurs
  • 7.3 Small Business
  • 7.5 Managing a Small Business
  • 7.6 The Large Impact of Small Business
  • 7.7 The Small Business Administration
  • 7.8 Trends in Entrepreneurship and Small-Business Ownership
  • 8.1 Gaining Advantages by Understanding the Competitive Environment
  • 8.2 Using SWOT for Strategic Analysis
  • 8.3 A Firm's External Macro Environment: PESTEL
  • 8.4 A Firm's Micro Environment: Porter's Five Forces
  • 8.5 The Internal Environment
  • 8.6 Competition, Strategy, and Competitive Advantage
  • 8.7 Strategic Positioning
  • 9.1 Strategic Management
  • 9.2 Firm Vision and Mission
  • 9.3 The Role of Strategic Analysis in Formulating a Strategy
  • 9.4 Strategic Objectives and Levels of Strategy
  • 9.5 Planning Firm Actions to Implement Strategies
  • 9.6 Measuring and Evaluating Strategic Performance
  • 10.1 Organizational Structures and Design
  • 10.2 Organizational Change
  • 10.3 Managing Change
  • 11.1 An Introduction to Human Resource Management
  • 11.2 Human Resource Management and Compliance
  • 11.3 Performance Management
  • 11.4 Influencing Employee Performance and Motivation
  • 11.5 Building an Organization for the Future
  • 11.6 Talent Development and Succession Planning
  • 12.1 An Introduction to Workplace Diversity
  • 12.2 Diversity and the Workforce
  • 12.3 Diversity and Its Impact on Companies
  • 12.4 Challenges of Diversity
  • 12.5 Key Diversity Theories
  • 12.6 Benefits and Challenges of Workplace Diversity
  • 12.7 Recommendations for Managing Diversity
  • 13.1 The Nature of Leadership
  • 13.2 The Leadership Process
  • 13.3 Leader Emergence
  • 13.4 The Trait Approach to Leadership
  • 13.5 Behavioral Approaches to Leadership
  • 13.6 Situational (Contingency) Approaches to Leadership
  • 13.7 Substitutes for and Neutralizers of Leadership
  • 13.8 Transformational, Visionary, and Charismatic Leadership
  • 13.9 Leadership Needs in the 21st Century
  • 14.1 Motivation: Direction and Intensity
  • 14.2 Content Theories of Motivation
  • 14.3 Process Theories of Motivation
  • 14.4 Recent Research on Motivation Theories
  • 15.1 Teamwork in the Workplace
  • 15.2 Team Development Over Time
  • 15.3 Things to Consider When Managing Teams
  • 15.4 Opportunities and Challenges to Team Building
  • 15.5 Team Diversity
  • 15.6 Multicultural Teams
  • 16.1 The Process of Managerial Communication
  • 16.2 Types of Communications in Organizations
  • 16.3 Factors Affecting Communications and the Roles of Managers
  • 16.4 Managerial Communication and Corporate Reputation
  • 16.5 The Major Channels of Management Communication Are Talking, Listening, Reading, and Writing
  • 17.1 Is Planning Important
  • 17.2 The Planning Process
  • 17.3 Types of Plans
  • 17.4 Goals or Outcome Statements
  • 17.5 Formal Organizational Planning in Practice
  • 17.6 Employees' Responses to Planning
  • 17.7 Management by Objectives: A Planning and Control Technique
  • 17.8 The Control- and Involvement-Oriented Approaches to Planning and Controlling
  • 18.1 MTI—Its Importance Now and In the Future
  • 18.2 Developing Technology and Innovation
  • 18.3 External Sources of Technology and Innovation
  • 18.4 Internal Sources of Technology and Innovation
  • 18.5 Management Entrepreneurship Skills for Technology and Innovation
  • 18.6 Skills Needed for MTI
  • 18.7 Managing Now for Future Technology and Innovation
  • What are the first steps to take if you are starting your own business?

You have decided that you’d like to go into business for yourself. What is the best way to go about it? Start from scratch? Buy an existing business? Or buy a franchise? About 75 percent of business start-ups involve brand-new organizations, with the remaining 25 percent representing purchased companies or franchises. Franchising may have been discussed elsewhere in your course, so we’ll cover the other two options in this section.

Getting Started

The first step in starting your own business is a self-assessment to determine whether you have the personal traits you need to succeed and, if so, what type of business would be best for you. Table 7.6 provides a checklist to consider before starting your business.

Finding the Idea

Entrepreneurs get ideas for their businesses from many sources. It is not surprising that about 80 percent of Inc. 500 executives got the idea for their company while working in the same or a related industry. Starting a firm in a field where you have experience improves your chances of success. Other sources of inspiration are personal experiences as a consumer; hobbies and personal interests; suggestions from customers, family, and friends; industry conferences; and college courses or other education.

An excellent way to keep up with small-business trends is by reading entrepreneurship and small-business magazines and visiting their websites. With articles on everything from idea generation to selling a business, they provide an invaluable resource and profile some of the young entrepreneurs and their successful business ventures ( Table 7.7 ). 14

These dynamic individuals, who are already so successful in their 20s and 30s, came up with unique ideas and concepts and found the right niche for their businesses.

Interesting ideas are all around you. Many successful businesses get started because someone identifies a need and then finds a way to fill it. Do you have a problem that you need to solve? Or a product that doesn’t work as well as you’d like? Raising questions about the way things are done and seeing opportunity in adversity are great ways to generate ideas.

Choosing a Form of Business Organization

A key decision for a person starting a new business is whether it will be a sole proprietorship, partnership, corporation, or limited liability company. As discussed earlier, each type of business organization has advantages and disadvantages. The choice depends on the type of business, number of employees, capital requirements, tax considerations, and level of risk involved.

Developing the Business Plan

Once you have the basic concept for a product or service, you must develop a plan to create the business. This planning process, culminating in a sound business plan , is one of the most important steps in starting a business. It can help to attract appropriate loan financing, minimize the risks involved, and be a critical determinant in whether a firm succeeds or fails. Many people do not venture out on their own because they are overwhelmed with doubts and concerns. A comprehensive business plan lets you run various “what if” analyses and evaluate your business without any financial outlay or risk. You can also develop strategies to overcome problems well before starting the business.

Taking the time to develop a good business plan pays off. A venture that seems sound at the idea stage may not look so good on paper. A well-prepared, comprehensive, written business plan forces entrepreneurs to take an objective and critical look at their business venture and analyze their concept carefully; make decisions about marketing, sales, operations, production, staffing, budgeting and financing; and set goals that will help them manage and monitor its growth and performance.

The business plan also serves as the initial operating plan for the business. Writing a good business plan takes time. But many businesspeople neglect this critical planning tool in their eagerness to begin doing business, getting caught up in the day-to-day operations instead.

The key features of a business plan are a general description of the company, the qualifications of the owner(s), a description of the products or services, an analysis of the market (demand, customers, competition), sales and distribution channels, and a financial plan. The sections should work together to demonstrate why the business will be successful, while focusing on the uniqueness of the business and why it will attract customers. Table 7.8 describes the essential elements of a business plan.

A common use of a business plan is to persuade lenders and investors to finance the venture. The detailed information in the plan helps them assess whether to invest. Even though a business plan may take months to write, it must capture potential investors’ interest within minutes. For that reason, the basic business plan should be written with a particular reader in mind. Then you can fine-tune and tailor it to fit the investment goals of the investor(s) you plan to approach.

But don’t think you can set aside your business plan once you obtain financing and begin operating your company. Entrepreneurs who think their business plan is only for raising money make a big mistake. Business plans should be dynamic documents, reviewed and updated on a regular basis—monthly, quarterly, or annually, depending on how the business progresses and the particular industry changes.

Owners should adjust their sales and profit projections up or down as they analyze their markets and operating results. Reviewing your plan on a constant basis will help you identify strengths and weaknesses in your marketing and management strategies and help you evaluate possible opportunities for expansion in light of both your original mission and goals, current market trends, and business results. The Small Business Administration (SBA) offers sample business plans and online guidance for business plan preparation under the “Business Guide” tab at https://www.sba.gov .

Financing the Business

Once the business plan is complete, the next step is to obtain financing to set up your company. The funding required depends on the type of business and the entrepreneur’s own investment. Businesses started by lifestyle entrepreneurs require less financing than growth-oriented businesses, and manufacturing and high-tech companies generally require a large initial investment.

Who provides start-up funding for small companies? Like Miho Inagi and her Tokyo bagel shop, 94 percent of business owners raise start-up funds from personal accounts, family, and friends. Personal assets and money from family and friends are important for new firms, whereas funding from financial institutions may become more important as companies grow. Three-quarters of Inc . 500 companies have been funded on $100,000 or less. 15

The two forms of business financing are debt , borrowed funds that must be repaid with interest over a stated time period, and equity , funds raised through the sale of stock (i.e., ownership) in the business. Those who provide equity funds get a share of the business’s profits. Because lenders usually limit debt financing to no more than a quarter to a third of the firm’s total needs, equity financing often amounts to about 65 to 75 percent of total start-up financing.

One way to finance a start-up company is bootstrapping, which is basically funding the operation with your own resources. If the resources needed are not available to an individual, there are other options. Two sources of equity financing for young companies are angel investors and venture-capital firms. Angel investors are individual investors or groups of experienced investors who provide financing for start-up businesses by investing their own money, often referred to as “seed capital.” This gives the investors more flexibility on what they can and will invest in, but because it is their own money, angels are careful. Angel investors often invest early in a company’s development, and they want to see an idea they understand and can have confidence in. Table 7.9 offers some guidelines on how to attract angel financing.

Venture capital is financing obtained from venture capitalists, investment firms that specialize in financing small, high-growth companies. Venture capitalists receive an ownership interest and a voice in management in return for their money. They typically invest at a later stage than angel investors. We’ll discuss venture capital in greater detail when discussing financing the enterprise.

Buying a Small Business

Another route to small-business ownership is buying an existing business. Although this approach is less risky, many of the same steps for starting a business from scratch apply to buying an existing company. It still requires careful and thorough analysis. The potential buyer must answer several important questions: Why is the owner selling? Does he or she want to retire or move on to a new challenge, or are there problems with the business? Is the business operating at a profit? If not, can this be corrected? On what basis has the owner valued the company, and is it a fair price? What are the owner’s plans after selling the company? Will he or she be available to provide assistance through the change of ownership of the business? And depending on the type of business it is, will customers be more loyal to the owner than to the product or service being offered? Customers could leave the firm if the current owner decides to open a similar business. To protect against this, many purchasers include a noncompete clause in the contract of sale, which generally means that the owner of the company being sold may not be allowed to compete in the same industry of the acquired business for a specific amount of time.

You should prepare a business plan that thoroughly analyzes all aspects of the business. Get answers to all your questions, and determine, via the business plan, whether the business is a sound one. Then you must negotiate the price and other terms of purchase and obtain appropriate financing. This can be a complicated process and may require the use of a consultant or business broker.

Risky Business

Running your own business may not be as easy as it sounds. Despite the many advantages of being your own boss, the risks are great as well. Over a period of five years, nearly 50% percent of small businesses fail according to the Kauffman Foundation. 16

Businesses close down for many reasons—and not all are failures. Some businesses that close are financially successful and close for nonfinancial reasons. But the causes of business failure can be interrelated. For example, low sales and high expenses are often directly related to poor management. Some common causes of business closure are:

  • Economic factors—business downturns and high interest rates
  • Financial causes—inadequate capital, low cash balances, and high expenses
  • Lack of experience—inadequate business knowledge, management experience, and technical expertise
  • Personal reasons—the owners may decide to sell the business or move on to other opportunities

Inadequate early planning is often at the core of later business problems. As described earlier, a thorough feasibility analysis, from market assessment to financing, is critical to business success. Yet even with the best plans, business conditions change and unexpected challenges arise. An entrepreneur may start a company based on a terrific new product only to find that a larger firm with more marketing, financing, and distribution clout introduces a similar item.

The stress of managing a business can also take its toll. The business can consume your whole life. Owners may find themselves in over their heads and unable to cope with the pressures of business operations, from the long hours to being the main decision maker. Even successful businesses have to deal with ongoing challenges. Growing too quickly can cause as many problems as sluggish sales. Growth can strain a company’s finances when additional capital is required to fund expanding operations, from hiring additional staff to purchasing more raw material or equipment. Successful business owners must respond quickly and develop plans to manage its growth.

So, how do you know when it is time to quit? “Never give up” may be a good motivational catchphrase, but it is not always good advice for a small-business owner. Yet, some small-business owners keep going no matter what the cost. For example, Ian White’s company was trying to market a new kind of city map. White maxed out 11 credit cards and ran up more than $100,000 in debt after starting his company. He ultimately declared personal bankruptcy and was forced to find a job so that he could pay his bills. Maria Martz didn’t realize her small business would become a casualty until she saw her tax return showing her company’s losses in black and white—for the second year in a row. It convinced her that enough was enough and she gave up her gift-basket business to become a full-time homemaker. But once the decision is made, it may be tough to stick to. “I got calls from people asking how come I wasn’t in business anymore. It was tempting to say I’d make their basket but I had to tell myself it is finished now.” 17

Concept Check

  • How can potential business owners find new business ideas?
  • Why is it important to develop a business plan? What should such a plan include?
  • What financing options do small-business owners have? What risks do they face?

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  • Building Your Business
  • Becoming an Owner
  • Business Plans

Why You Should Write a Business Plan

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

what business would you plan to establish why

To Test the Feasibility of Your Business Idea

To give your new business the best chance of success, to secure funding, to make business planning manageable and effective, to attract investors, frequently asked questions (faqs).

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A business plan  is the blueprint for your business. Starting a business without a business plan is like building a house without a blueprint. Yet, unlike a house, a business isn't static. We often make the mistake of thinking of a business plan as a single document that you put together once when you're starting out and never touch again. But as the business develops, so should its business plan. In fact, any particular business may have multiple business plans as its objectives change.

Writing a business plan is time-consuming, but it's essential if you want to have a successful business that's going to survive the startup phase.

Key Takeaways

  • Writing a business plan reveals how tenable your idea is.
  • Updating and amending a business plan as the business develops and its goals change is vital to your success.
  • A good business plan helps you define your target market, competitive advantage, optimum pricing strategies, and better prepares the business for upcoming challenges.
  • A business plan helps you secure funding and attract new investors.

Writing a business plan is the best way—other than going out and doing it—to test whether an idea for starting a business is feasible. In this sense, the business plan is your safety net. If working through a business plan reveals that your business idea is untenable, it will save you a great deal of time and money.

Often, an idea for starting a business is discarded at the marketing analysis or competitive analysis stage , freeing you to move on to a new (and better) idea.

Unfortunately, many prospective business owners are so convinced that their idea for a product or service is a can't-miss proposition, that they don't take the time to do the necessary research and work through a proper business plan. The more you know about your industry, your prospective customers, and the competition, the greater the likelihood that your business will succeed.

Writing a business plan will ensure that you pay attention to the broad operational and financial objectives of your new business and the small details, such as budgeting and market planning. The process will ultimately make for a smoother startup period and fewer unforeseen problems as your business gets up and running.

The exercise of budgeting and market planning will help you define your  target market , your unique selling proposition, optimum pricing strategies, and outline how you intend to sell and deliver your products to customers. In addition, developing a budget for implementation will assist with determining your startup and operating capital requirements.

According to the Small Business Administration, one of the most-cited reasons why businesses fail is inadequate planning. By starting too soon and without a sufficient plan, your business is setting itself up for failure.

Most new businesses need startup and operating capital to get off the ground. Without a well-developed business plan, there is no chance of getting  debt financing from established financial institutions such as banks or  equity financing  from angel investors.

Established businesses often need money, too, to buy new equipment or property, or because of market downturns. Having an up-to-date business plan gives you a much better chance of getting the money you need to keep operating or expand.

Even an angel investor will want to ensure their money is going to a business that knows what it's doing. The easiest way to prove this is via a well-developed business plan.

Investors and financiers are always looking at the risk of default, and word of mouth is no substitute for written facts and figures in a properly prepared business plan.

A business plan is essential if you're thinking of starting a business, but it's also an important tool for established businesses. Viable businesses are dynamic; they change and grow. Your company's original business plan needs to be revised as you set new goals .

Reviewing the business plan can also help you see what goals have been accomplished, what changes need to be made, or what new directions your company's growth should take.

Whether you want to shop your business to venture capitalists or attract angel investors , you need to have a solid business plan. A presentation may pique their interest, but they'll need a well-written document they can study before they'll be prepared to make any investment commitment.​​​

Be prepared to have your business plan scrutinized. Both venture capitalists and angel investors will want to conduct extensive background checks and competitive analyses to be certain that what's written in your business plan is indeed the case.

What are the sections of a business plan?

A comprehensive business plan should include the following sections:

  • Executive summary
  • Company description
  • Competitor analysis
  • Industry analysis
  • Product and services description
  • Financial data

What is the purpose of a business plan?

A business plan has four main purposes:

  • Tests the feasibility and model of your business idea
  • Attracts investors
  • Sets a plan for growth
  • Identifies capital needs

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What Kind of Business Should I Start?

Maddie Shepherd

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

For some entrepreneurs, the types of businesses to start are obvious from the get-go. For others, a little more soul-searching might be in order. And finding the best answer to that question you keep asking yourself—"What kind of business should I start?"—certainly deserves a good bit of attention.

Because deciding what kind of business to start is such a weighty decision, it only makes sense to consider all the possibilities and to scrutinize multiple options. But don't settle for some one-size-fits-all quiz to tell you what kind of business you should start. Deciding on what type of business to open will depend on your own unique experience and preferences.

To help, we've compiled a six-step guide based on the experience of entrepreneurs who have successfully answered, "What kind of business should I start?"

Here are your six questions to ask when deciding what kind of business you should start.

what business would you plan to establish why

What kind of business should you start? Ask these 6 questions

Based on the experiences of entrepreneurs who have successfully decided what kind of business to start, we've come up with six crucial questions to ask yourself to determine the perfect small business idea to act on. So, to answer the ultimate question of what kind of business you should start, first tackle these questions. With these six answers, you'll be able to localize the best business to start, based on your own individual goals and experiences:

1. What experience do I have?

Ashley Hill, founder and CEO of College Prep Ready, says she started her business because she had personal success financing her college dream.

“I researched the challenges that students and families are experiencing with paying for college to help me refine my core message and services,” she says.

From her experience and research, she learned that there was a market for the knowledge she had to offer. With Americans in trillions of dollars of student loan debt, Hill understood the pain points of students and parents when navigating the college application and financial aid process. She took this understanding and converted into a business that assuaged the difficulties she had witnessed.

Similarly, Victoria Garlick, CEO of event services matchmaking website Air Events Global, also believes in choosing a business based on experience and skill set. Hers is built off of a 20-year career in event planning.

“When deciding on what type of business to start, I looked at my personal and professional history and what I could contribute as an event director,” says Garlick.

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Once we uncover your personalized matches, our team will consult you on the process moving forward.

2. What am I passionate about?

Another common recommendation entrepreneurs shared with us is to find and follow your passion. Nick Ehret, founder of Varieteas, is passionate about tea. So, he built a successful business by curating specialty teas for his monthly subscription boxes.

He’s a premium tea aficionado who knew he could transform his passion into a business. His advice to people when picking a business to start is to “[choose] something you are extremely passionate about because you will be working with it all day, every day.”

Brian Davis, CEO of Spark Rental, subscribes to a Japanese concept called ikigai . It means “reason for being.” In this context, Davis says, a truly good business idea is at the intersection of four things: what you love doing, what you’re good at, what you can be paid for, and what the world needs.

3. What problem can I solve?

We all know that necessity is the mother of invention, but applying that knowledge to the business world hasn’t always been the next step. An entrepreneur who converts that need to a business plan could swiftly become a successful business owner. As any consumer can tell you, problems and pain points abound in just about any industry. Finding out what these difficulties and inefficiencies are—and coming up with a business plan to fix them—is a sure-fire way to step out on the right business path.

Take the dog bed company Big Barker, for example. This company generated $4.75 million in revenue in 2016. Eric Shannon, founder and CEO, saw a glaring problem in the market for dog beds. “I started Big Barker because there was a huge problem that large dog owners had to deal with. They had to replace their dog beds once or twice a year because they weren’t made well enough to support the weight of a big dog.”

Shannon adjures would-be entrepreneurs to solve big problems: “The bigger problem you solve, the more potential your business has.”

» MORE: How to start a food business

4. What is my lifestyle preference?

Your business goal may or may not include revenues in the millions and employees in the thousands — and that’s OK. Perhaps what’s most important to you is choosing a business model that supports your ideal work-life balance.

Antonella Pisani was a VP of global ecommerce for Fossil and held leadership roles at JCPenney, Guitar Center, and ProFlowers. But her primary interests were in travel and photography. Because she knew she would prefer mobility in order to pursue these interests, Pisani knew she needed a flexible business model that wouldn’t require space or inventory.

This was the impetus for creating her websites, Official Coupon Code and FACT Goods. These flexible, web-based businesses have allowed her to work from Antarctica, the Arctic, Bhutan, Morocco, and other countries.

5. How much capital do I have access to?

The lean startup wasn’t a fad after all. In fact, the concept grew from one inevitable and enduring truth about starting a business -- people don’t want to risk their life savings on a business idea they have yet to prove or make profitable.

A great example of this fact is Robert Lomax, who founded an educational services firm, RSL Educational, based on needs he saw in his day job as a teacher. Not only did his teaching experience help him see gaps in the educational books market, but it also gave him the ability to keep his job and develop new products. Because he had a steady income as he founded his firm, Lomax was able to avoid taking on debt and minimize risk while he grew his business.

And he wouldn’t have done it any other way. According to Lomax, his approach is ideal because it allows you to “take your time and explore your ideas properly."

» MORE: How to start an insurance company

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6. What ideas can I test easily?

Facebook CEO Mark Zuckerberg once said, “Move fast and break things. Unless you are breaking stuff, you are not moving fast enough.”

In other words, your business idea should be something you can prove (or disprove) early on. If you’ve got no experience in the trucking industry, starting a logistics company would be costly to test out. Instead, think about the lower hanging fruit in industries that interest you.

Marc Roche, co-founder at Annuities HQ, a Canadian online resource on retirement-planning products, suggests doing preliminary research with family and friends, and then move on to the Internet for some more digging.

“Don’t be afraid to try a have a few ideas in mind to ‘test drive’ before you choose a direction,” Roche says. “Do some basic research online and get a feel for what idea will be worth the time and effort of developing into a business.”

On a similar note...

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  • Setting business goals: The first step ...

Setting business goals: The first step to a successful business

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Business goals are a predetermined target that a business or individual plans to achieve in a set period of time. This article discusses the importance of business goals and reasons why you should set them for your team.

These are just a few benefits the goal setting process provides. Whether you're looking at the big picture or looking for small stepping stones, we'll explain everything you need to know to set goals for your business.

What are business goals?

Business goals are a predetermined target that a business or individual plans to achieve in a set period of time. These goals are often split into short-term goals and long-term goals . Business goals can be general and high level, or they can focus on specific measurable actions. 

A good example of a general business goal is a mission statement. Missions statements are a general goal because they don't have one metric that defines their success. They’re more often used as a guiding North Star—something your team can strive for as opposed to hitting hard numbers.

Alternatively, you can set specific goals—measurable goals that are easy to track as your team progresses towards them. When someone talks about "setting goals" or the "goal setting process," they're talking about specific goals. A common goal setting process to use is the SMART goals process .

Short-term goals

Short-term goals are often bound by a set period of time, usually ranging from a few hours to a full year. Long-term goals can also be time-bound, but if they are, they’re typically set further into the future. 

Short-term goals are often used as building blocks towards larger goals. A common strategy in business is to set multiple short-term goals to make the long-term goals more achievable.

Examples of short-term business goals:

Increase net promoter score by 10 points this quarter.

Hire 12 new support representatives by the end of the year.

Increase employee satisfaction by 20%.

Long-term goals

Long-term goals are bigger visions—goals you want to achieve further into the future. A common long-term goal is a 10-year goal. Think about where you want your business to be 10 years from now. What business objectives do you want to have achieved by then? What new businesses do you want to break into, if any? 

Long-term goals are often used as vision or mission statements —these goals serve as a compass for your business to help you move in the right direction. Think of your goals as a map to get you where you want to go. Long-term goals may not tell you how to get there exactly, but they point you in the right direction. Short-term goals are like a GPS. They provide step-by-step directions on how to get where you want to go. 

Examples of long-term business goals:

Nike : To bring inspiration and innovation to every athlete in the world.

Patagonia : We're in business to save our home planet.

Google : To organize the world's information and make it universally accessible and useful.

Why are business goals important?

Setting business goals is a best practice for a reason—goals help drive businesses in the right direction. Here are a few more reasons why companies take the time to establish strong goals. 

Confidently define success

One of the easiest ways to know if your team is successful is by clearly outlining what success looks like. When you set your goals, take into consideration what you know your team is capable of, and push them slightly farther than expected.

There are a few common frameworks used to define goals. One of the most common ones used to create measurable and actionable goals is the Objectives and Key Results (OKRs) framework.

Connect work to goals

A good business strategy to get into the habit of doing is connecting your business goals to the work your team is already doing. When you connect daily work to short- and long-term goals, individual team members have a clear sense of what they need to do, when they need to complete it, and the strategies they're doing to achieve those goals. 

Not only are team members more confident in what they need to do, but it gives them a sense of pride and ownership over their work. Team members are confident in how the work they’re doing impacts your business and how they’ve contributed to that success.

Keep teams aligned

A key benefit of using business goals is to align teams towards a common goal. Establishing clear business objectives allows team leaders to define which tactics their individual teams should use to achieve these goals. 

For example, imagine your company's overall business goal is to increase profitability by 10%. This is an overarching goal, but there are many different ways your company can achieve this. By establishing smaller, more tailored goals, business leaders can define the specific strategy you plan to take to achieve this goal. Your sales team may increase their sales quota, and your marketing team may implement a new outreach strategy. These are two different tactics that can be implemented to ultimately reach the same goal.

Maintain accountability

Once you set business goals, you can then break them down to the individual level. Using a technique like this can help maintain accountability from the leadership level all the way down to individual team members. When individual team members are responsible for their individual goals, it's easy for managers to gauge how they're performing and when they might need more support. 

Inform decision-making

If your company regularly tracks its business goals, you can use past goals as a way to inform your decision making process. For example, if your team sets up a new marketing strategy to track your goals and progress, you can use that information to set your business strategy for the next year based on performance.

Tips for setting clear business goals

Now that you know the reasons why business goals are important, here are a few tips on how to establish them.

Use a framework to set goals

If you're on the path to setting your first business goal, it can be challenging to figure out where to start. You want to make sure that your goal is achievable, but not so easy to achieve that it's not a challenge.  Goal setting frameworks like SMART goals or OKRs are a good way to establish your first set of business goals.

Co-create with other business leaders

Your team doesn't work in a bubble. The work that your team does can affect other teams in your company and your business strategy as a whole. This is why co-creating with stakeholders is important. By working together, your team can utilize their unique knowledge and experience to set goals and create a sound business plan.

Start with the big picture

When you're establishing your goals, choosing numbers and tactics can feel overwhelming. To prevent that, start with the big picture first. Focus on answering the questions:

What do you want your company to stand for? 

Why was your company created? 

Where do you want to be in 10 years? What about 25 years? 

Once you’ve defined a big picture mission, break it down into smaller, more actionable goals. What steps can you take to get there? What new products can you introduce to help achieve that overall, big picture mission? 

With goal setting, there is no right or wrong answer. It's all about finding the strategies and methodologies that work best for your team.

Manage goals using software

There's no use in setting goals if you set them and forget them in a document somewhere, only to be opened again at the end of a quarter. Using software to regularly track goal progress is important, and what better way to do that than to use software that connects your goals to the work that needs to be done? 

Connecting the work you’re doing to goals is easy. Guru aligns their company OKRs to their projects with Asana. The Guru team uses Asana as a source of truth for clarity and accountability company-wide.

Start setting—and achieving—business goals today

All businesses start small, and setting goals is how they grow into successful companies. If you're interested in learning more about different goal strategies, how to measure them, or where to start with planning, visit the Asana goals resource page for more information.

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7 Real Reasons Why Entrepreneurs Start Their Own Business

Posted april 5, 2022 by kody wirth.

young man fixing up cars in a garage exploring the possibility of starting his own business.

Why do people want to start their own business? What drives them to strike out on their own?

If you’re considering becoming an entrepreneur , understanding your answer to this question is critical. Honestly, assessing your motivations can tell you a lot about your likelihood of success. Will you be able to navigate a financial crisis? Invest the extra hours to rework your strategy even when you’d rather go home? 

If you don’t have an answer to that question, it may be helpful to explore why you want to be an entrepreneur further. Let’s take a look at some of the most common reasons why entrepreneurs start their own businesses—which are probably leading you to do the same.

1. Freedom to pursue your passion

You’ve had this talent, skill, or hobby for years, maybe even since childhood. Now, you see a potential opportunity to develop a business structure and monetize it. So you decide to use your passion to start a business. 

However, you may want to take a moment to assess the potential of your passion. Yes, it makes you happy, but can it pay the bills?

When you set aside emotion and focus strictly on dollars and common sense, does your passion-fueled business idea truly have the potential to be financially successful? Don’t forget, with ongoing record inflation, you’ll need continuously increasing income to support yourself and your business. Can your passion keep you afloat? 

If the answer is yes, start writing a business plan and go for it. If not, then you should likely rethink using your passion and explore other small business ideas. Consider another talent or hobby that can bring emotional fulfillment, as well as a tangible financial reward. 

Or, do further market research into other opportunities outside of your core interests. You may find that there is another reason for being an entrepreneur is really what’s driving you.

Recommended Reading: 12 Types of Entrepreneurs Explained

2. Create generational wealth

Many people are fixated on the idea of creating wealth that can be enjoyed by their families. For some, it’s an ambitious financial planning goal derived from witnessing living examples of absurdly wealthy families. People who’ve been able to pass down highly successful businesses from generation to generation. Others simply want their kids and grandkids to be spared from the financial hardships they were forced to overcome. 

Yet, only a handful of businesses are able to survive the passage of time. Yes, building a prosperous foundation for your descendants is a worthy cause. However, there is no guarantee that they’ll have the work ethic or discipline necessary to maintain an existing business. Much less position it to remain competitive in an ever-evolving global marketplace.  

Therefore, your focus has to be on how this endeavor will improve your life right now. Yes, your hard work could benefit your great-great grandkids, and you can teach your children to appreciate your business. You can’t force them to have the same passion you do. You can only set them up for success and hope for the best.  

3. Support community, non-profits, and other social efforts

Many new entrepreneurs have a deep desire to use their businesses as vehicles to help the less fortunate. These noble souls see starting a small business as a means to effect change.

Social entrepreneurs aren’t driven by money but rather by a desire to create a better world. In our 2021 State of Small Business Study , we found that 12 percent of respondents identified giving back to their community as the primary reason for starting a business. 

If you’re one of these generous individuals, you must never forget that business remains business. Even though you have the best intentions, this doesn’t remove the responsibility to serve the needs of your target market. To provide competitively viable products and services for your customers. Failure to do so will result in your customer base taking their hard-earned money elsewhere, leaving you and your cause, out in the cold.

4. Turn a side-project into something more

Many successful businesses were once the side-gigs of nine to five employees who were simply trying to earn extra money. One thing led to another, word got around, and after a while, that side-project earned enough to replace the nine to five job, and boom: A business was born. 

As of 2022, we found that 23 percent of entrepreneurs were either starting a side gig or trying to turn a side gig into a full business. In fact, for most people, having a side gig is just a necessary part of survival. 

Yes, it is possible to turn your side project into a full-fledged business that becomes your primary source of income. However, it’s often difficult to know when it’s the right time to step away from your full-time position. 

When should you begin to promote your business? Should you invest in business insurance? Get the necessary licenses and permits to become a sole proprietorship?

These are just some of the questions you’ll need to answer when turning a side gig into your full-time pursuit. You don’t need to immediately make it your primary work; just take steps in that direction to see how viable it can be.

Remember, this can take months or years to gain traction. Just like a seed that you plant, you need to water it to see growth. With enough time and “watering,” that little side-gig seed can become a huge tree that becomes a profitable business. 

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5. Challenge the status quo

Have you ever felt like there’s a better way to do something? This is a sentiment often held by game-changers. The employees and dreamers who feel the job or industry they’re in isn’t doing something right, and it’s up to them to change the status quo. 

Disrupting current norms can be a powerful incentive for new entrepreneurs. It can also be extremely beneficial for consumers wanting higher quality products or more efficient service. Nevertheless, disruption shouldn’t be based on personal feelings or experience. Instead, it must be centered solely on customer wants and expectations. 

Will consumers actually be interested in the innovation you provide? If you truly want to shake up the status quo, it’s up to you to find out if the solution you see truly benefits others.

6. Flexibility and balance

Having more personal and family time is one of the most powerful motivations for many new and prospective entrepreneurs. Nothing beats working on your own time and not having to worry about someone else’s standards. 

It’s time to make your own clock and choose your own hours. The harsh reality, as many new small business owners discover, is that work hours tend to increase, not decrease, after launching your own business. 

This is your project, your idea, and your customers, so it’s your responsibility. Reasoning such as “I’m not feeling well” or “that’s not in my job description” no longer applies to you. When you’re an entrepreneur, you’re always on duty.

Sure, you have “absentee owners” who simply hire people and leave them to run a business. But take a look at the most successful entrepreneurs. There is one common thread—they are hands-on. Oftentimes, their level of micromanagement is borderline psychotic. 

No, you don’t have to follow in the footsteps of Steve Jobs to be a successful entrepreneur. You don’t have to spend every waking hour to ensure your business succeeds. But you must care deeply about your business and, yes, sacrifice a great deal of time to make it a success.

7. Being the boss

One of the greatest driving forces for people starting a business is taking on the title of “Boss.” 47% of new entrepreneurs surveyed said that their main reason for starting a small business involved wanting to be their own boss. 

There’s a certain aura, a distinctive swagger, that many entrepreneurs have. Unlike top-level executives or even appointed CEOs, entrepreneurs garner a great deal of respect for being the ones who took the initial risk . They’re the ones whose vision enabled them to see an opportunity and whose determination made it happen. 

Entrepreneurship is a medal worn with pride, which most onlookers cannot ignore. Why do people start their own businesses? Because many want the respect and admiration that comes with starting a business. 

If that’s your main reason, make sure you’re totally prepared for the responsibility that comes your way. You owe it to yourself, your employees, and your customers. 

Recommended Reading: 6 Requirements of Successful Entrepreneurs

How to successfully start your own business

Whatever your reason, there is one thing you absolutely must do in order to be successful— plan . This is especially true when starting and attempting to grow a business. For an entrepreneur, being prepared is often the difference between success and failure. 

If you’re seriously considering starting your own business, then you can’t afford to leave anything to chance or be surprised by any eventuality. With powerful planning and management tools available such as LivePlan , there’s no excuse for prospective entrepreneurs not to have a solid course of action. Your planning should incorporate regular forecasting and preparing contingencies for likely scenarios.

Confirm and test your reason for starting  

Effective planning not only helps you identify the reasons you want to start a business but also allows you to assess if your business truly has the potential to be sustainable. There’s no need to waste precious time or money pursuing an idea that won’t work. By taking the time to plan properly, you’ll be able to see clearly if your business idea is worthwhile and figure out the necessary steps you’ll need to take to bring it to fruition. 

Turn hard work into strategic work

After you have developed a plan, it’s time to act. That means dedication, hard work, and the willingness to plan. Make no mistake, if you’re not prepared to put in the hours toward your entrepreneurial dream, then you should reexamine if starting a business makes sense. 

Nothing in entrepreneurship is guaranteed, and it’s driven by strategic risk. This is why effective planning, reviews, and revisions are so vital for business owners. It can help streamline time-consuming work, eliminate unnecessary risk, and ultimately help you know more about your business.

Gain the confidence of a successful entrepreneur

Now that you’ve been reminded of just how difficult starting a business can be, there is one more requirement necessary for you to succeed—self-confidence. No one is going to fully

believe you can do it until you actually turn your idea into a successful business. First and foremost, you must believe in yourself. Without this critical element, your new business is almost certain to fail.

Why would anyone support a business whose owner doesn’t believe in its future? People are attracted to winners who showcase the capability to maintain that success. Possessing this attitude, combined with thorough, objective planning , will empower you to aggressively pursue your goal and find success as an entrepreneur. 

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Kody Wirth

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6 reasons why you need a business plan before starting a business

Table of Contents

1) Know the market

2) plan your growth, 3) minimise risk, 4) help guide future decisions, 5) improve as you learn more, 6) secure financing, making informed business decisions.

Sometimes success comes with luck. Otherwise, it comes with hard work and planning. If you’d like to maximise your success as you launch a business, this article is for you. 

Learn six reasons you need a business plan before starting a business in this article by Countingup. If you’re new to business, a typical business plan includes research on market trends, competition analyses, customer profiles, marketing goals, logistics and operations plans, cash flow information, and an overall strategy on how they will grow.

Find out how a plan helps your business to:

  • Know the market
  • Plan your growth
  • Minimise risk
  • Help guide future decisions
  • Improve as you learn more
  • Secure financing

This article will cover why you should plan and how you can use these elements to build your business more effectively. If you’re ready to write a business plan instead, check out our dedicated article How to write a business plan . There we cover what sort of information is expected and useful in business plans and how to research them.

At Countingup, we want to empower new entrepreneurs to take on new challenges and be financially independent. Read on to find out more.

If you’re to be successful in business, you need to know your market and the value customers are seeking within it. However, this can potentially be a lot of information to gather and manage. Therefore, you need a business plan to centralise and summarise all the important reasons why your business is valuable.  

To do this, you need to consider two main perspectives: what your customers want and what your competitors are already offering. This second question is essential as it will allow you to identify how you can be different.  If you already have something of a business idea or would like to turn a side-hustle into a full-time job, you should do research to understand if your idea will be a viable business and how. This market research in your business plan should look something like the following:

From your research, you can build a detailed picture of where your business should be positioned as you launch from the market gaps you’ve identified. 

As you anticipate what your business might look like in five years, you may have some ideas for milestones to hit. For example: first customer, thousandth customer, break-even financially, first £1,000 in profit, and so on. However, do you know how you’re going to reach each of them? 

From the market research you’ve just completed, your business plan allows you to take various steps to use this information. Therefore, you need a business plan to maximise your growth and create specific objectives and strategies to meet this growth. 

For example, if you run a craft beer business, you might aim to sell 1,000 units within your first year. Your sales objective could be achieved with a strategy to ‘Attend trade fairs and beer festivals to meet potential retailers and interested customers’. Depending on the direction you choose in providing to retailers or selling directly to customers, you can reach this objective (first 1,000 units) in very different ways.

In contrast, if you run a consultancy business in financial services or marketing, you could aim to grow your client base to 12 full-time contracts across the year. Therefore, you might plan to ‘Use social media and industry contacts to advertise to clients’ or ‘Develop your service to retain clients for longer periods and larger projects’. These goals’ methods are critically different from one another – therefore strategies for your goals will need to be relevant and focused.

Once you’ve taken steps to meet these objectives, you can use your business plan to track your progress and identify where you still need to develop your business. With these formalised goals and methods, you can grow your business faster than entrepreneurs who don’t plan. 

Another direction in which to focus market research within your business plan is towards identifying vulnerabilities. Each business has fragile areas where they are threatened. Therefore, you need a business plan to protect weak points and avoid excessive risk sources.

From the SWOT analysis (strengths, weaknesses, opportunities and threats) included in your business plan, you can highlight areas that may need more proactive management and back-up plans in case something goes wrong. For example, this can be recognising whether your business idea is patentable, if external factors are driving up costs for consumers or if customer interest is a fading trend. Each of these threats and weaknesses presents vastly different problems to your business. Therefore, each will also need suitable methods to address them.

As you’re looking to start, having this awareness can mean you can anticipate problems ahead of time. Depending on the severity of these issues, you can take steps to cushion any damage or preserve your profits entirely. Without this insight, you leave yourself open to threats you were able to anticipate and mitigate but didn’t manage to – a critical oversight for any business owner.

On balance, having this awareness of weaknesses and threats can be more important than your opportunities, as you’ll be aware of steps to avoid and what to look out for. Therefore, outline threats to your business’ future to protect it.

Unfortunately, even the best plans have blindspots and circumstances where they’re of limited use. Therefore, you need a business plan to navigate uncertain futures.

Your market research is a snapshot of the market at one point in time. Therefore, the information, objectives and strategies you create are only useful for a certain period after this. If something changes in the market or some element of your business no longer works, you can still fall back on other parts of your business plan without having to start from scratch. 

For example, as you build your business, you can revisit future objectives and decide whether your currently available options can still meet them. If they do, and you’re able to stay on target for your goals, you can grow your business in the direction you initially planned. However, where your plan hasn’t worked out, you’ll need to decide to the best of your ability.

Navigating these future scenarios with updated information is especially important as you balance the short and long-term priorities of growing your business. For example, do you want to take more money to compensate yourself or reinvest a higher proportion of your profits in the hopes of growth later on?

Even if you’ve planned to reinvest every penny for the first 5 years, maybe something in your personal life has meant you need to support yourself.

Some critical information to look out for as your business plan evolves includes: 

  • Demand lower than predicted
  • Cash flow issues due to poor forecasting
  • Not enough differentiation from competitors
  • Prices too high or too low for the industry to be sustainable

As the months and years pass by while you trade and grow your business, you can update your plan with more insight. Therefore, you need a business plan to improve your business.

As an example, in some instances, a manufacturing process is harder than anticipated or a planned funding source isn’t available. Here, you can adapt your growth strategies based on this new information and update your plan to be more pragmatic and accurate. Similarly, if you find that certain marketing strategies don’t work, you can rule out certain business strategies in the future to expand your business with more confidence.

There would be little point in planning a course of action for your business, facing difficulties and then not updating your plan with a new direction. This would risk your business being disorganised and ineffective in its growth.

Even if your initial plans and growth strategies go the way you planned, at a certain point, your plan will expire anyway. This is because you can only plan so much on a single market snapshot. Therefore, you can use the experience you gain with time from growing your business to fine-tune your plans. This will make sure your business is always performing at its best within an evolving marketplace.

Finally, investors and lenders want to see entrepreneurs with a good understanding of what they offer to customers and a clear vision of how to grow their business. Therefore, you need a business plan to help convince other people that your business has value and potential.

When seeking funding, having a business plan to share with potential investors and lenders is sometimes a requirement as they’ll want to evaluate your claims more critically. While they may not be familiar with every business plan they come across, they may know more about typical business growth patterns and will be able to spot poor research or naive expectations. 

Therefore, having a detailed and realistic business outline can help your plan withstand their criticism and robustly show your growth potential. Similarly, if you’re considering an exit strategy to sell your business in the future, a business plan may be needed to secure a higher valuation. 

If you’d like to know more about communicating your business’s value and plan to secure funding, read our dedicated article How to present a business plan to potential investors . 

Make your business plan more effective with Countingup.

Countingup is your business current account and accounting software in one app. With it, you can automate your financial admin and save time – so you can get back to doing what you love.

The Countingup app offers real-time profit and loss data so you detect changes in your business’ performance as they happen. So you’ll be able to see success instantly if you change your marketing strategy. 

Get paid faster and improve your cash flow with automated invoicing. Gain complete confidence in your books as they’re always accurate and up to date – even if you’re on the go – with automatic expense categorisation and prompts for receipt capture as you make transactions. Countingup’s tax estimate tool will help you confidently set aside the right amount each year to pay any tax owed. Find out more here and sign up for free today.

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How to Start a Business: A Startup Guide for Entrepreneurs [Template]

Published: February 15, 2024

I started a local HVAC business in the summer of 2020, and since then, I’ve learned a lot about which steps are most important for getting a business venture off the ground. To help you make your business idea a reality, I've put together a complete guide that walks you through the steps of starting a business.

how to start a business; entrepreneur learning how to start a business and talking to suppliers

The guide covers every step I’ve discovered you need to start a business, from the paperwork and finances to creating your business plan and growing your business online. At the bottom, you’ll find a library of the best free tools and resources to start selling and marketing your products and services.

Use the links below to navigate to each section of the guide:

  • What do you need to start a business?

How to Start a Business

How to make a business plan, how to decide on a company name.

  • How to Choose a Business Structure

How to Register Your Business

How to comply with legal requirements, how to find funding for your new business, how to create a brand identity for your new business, tips for starting a business, resources to start a business, how to start a business online.

Let's get started.

Every budding entrepreneur wants more visitors, more qualified leads, and more revenue. But starting a business isn’t one of those “if you build it, they will come” situations. So much of getting a startup off the ground has to do with timing, planning, and the market, so consider if the economic conditions are right to start a company and whether you can successfully penetrate the market with your solution.

In order to build and run a successful company , you’ll also need to create and fine-tune a business plan, assess your finances, complete all the legal paperwork, pick your partners, research apps for startup growth, choose the best tools and systems to help you get your marketing and sales off the ground … and a whole lot more.

When I first started my business, I felt overwhelmed by the sheer magnitude of requirements, which is why I’ve summed up the process to make it easier for you.

In brief, the requirements for starting a business are:

  • A business plan.
  • A business name.
  • An ownership or business structure.
  • A business registration certificate.
  • A legal license or seller’s permit (as well as other legal documents).
  • A source of funding.
  • A brand identity.

Without these elements in place, you unnecessarily risk your new business’s future. Now let’s go over these basic steps for starting a business.

  • Write a business plan.
  • Choose a business name.
  • Choose an ownership structure.
  • Register your business.
  • Review and comply with legal requirements.
  • Apply for funding.
  • Create a brand identity.

Having a great business idea is only part of the journey. In order to be successful, you’ll need to take a few steps to get it off the ground. In order to refine your business idea and set yourself up for success, consider doing the following:

1. Write a business plan.

Your business plan maps out the details of your business, including how it’s structured, what product or service you’ll sell, and how you’ll be selling it. Creating a business plan will help you find any obstacles on the horizon before you jump into running a business.

Pro tip: Remember that part of a business plan is telling investors or funders which specific items you need funding for. Be sure to list what you need to be funded, the reasoning behind items, and how long you will need funding.

Recommended Reading:

  • What is a Business Plan? Definition, Tips, and Templates
  • How to Build a Detailed Business Plan That Stands Out
  • How to Write an Ecommerce Business Plan
  • How to Become an Entrepreneur With No Money or Experience

70 Small Business Ideas for Anyone Who Wants to Run Their Own Business

Jump to: How to Start a Business Plan →

Featured Resource: Free Business Plan Template

what business would you plan to establish why

Below are the key elements in a business plan template, details about what goes into each of them, and example sections at the bottom. You’ll also learn tips for writing a business plan .

1. Use a business plan template .

what business would you plan to establish why

The executive summary should be about a page long. It should cover:

  • Overview . Briefly explain what the company is, where you’ll be located, what you’ll sell, and who you’ll sell to.
  • Company profile. Briefly explain the business structure, who owns it, what prior experience/skills they’ll bring to the table, and who the first hires might be.
  • Products or services . Briefly explain what you’ll sell.
  • The market. Briefly explain your main findings from your market analysis and product market fit .
  • Financial considerations . Briefly explain how you plan to fund the business and what your financial projections are.

Featured Resource: Executive Summary Template

what business would you plan to establish why

On the marketing side, you’ll want to cover answers to questions like:

  • How do you plan to penetrate the market?
  • How will you grow your business?
  • Which channels will you focus on for distribution?
  • How will you communicate with your customers?

Pro tip: Marketing trends change year after year, so be sure to keep up on the latest trends by subscribing to the Hubspot Marketing blog .

On the sales side, you’ll need to cover answers to questions like:

  • What’s your sales strategy ?
  • What will your sales team look like, and how do you plan to grow it over time?
  • How do you plan to scale for growth ?
  • How many sales calls will you need to make to make a sale?
  • What’s the average price per sale?

Speaking of average price per sale, you’ll want to go into your pricing strategy as well.

Featured Resource: Marketing & Sales Alignment Template

what business would you plan to establish why

More importantly, it typically doesn’t entail giving partial ownership of the business away. Instead, it’s a way of getting funding not from potential co-owners, but from potential fans and customers who want to support the business idea, but not necessarily own it.

What you give donors in exchange is entirely up to you — and typically, people will come away with early access to a product, or a special version of a product, or a meet-and-greet with the founders.

Pro tip: Choose the right platform for your crowdfunding campaign type. Some platforms are more geared towards traditional investors, while others are for donations. Learn more about crowdfunding here .

5. Venture Capital Financing

Only a very small percentage of businesses are either fit for venture capital or have access to it. All the other methods described earlier are available to the vast majority of new businesses.

If you’re looking for a significant amount of money to start your company and can prove you can quickly grow its value, then venture capital financing is probably the right move for you.

Venture capital financing usually means one or more venture capital firms make large investments in your company in exchange for preferred stock of the company — but, in addition to getting that preferred return as they would in series seed financing, venture capital investors also usually get governance rights, like a seat on the Board of Directors or approval rights on certain transactions.

VC financing typically occurs when a company can demonstrate a significant business opportunity to quickly grow the value of the company but requires significant capital to do so.

Pro tip: A lot of venture capital financing is simply being in the right room with the right people. Make sure to network extensively if this is your approach to financing.

When you’re first starting a business, you’ll need to build the foundation for a strong brand identity. Your brand identity is about your values, how you communicate concepts, and which emotions you want your customers to feel when they interact with your business. Having a consistent brand identity to promote your business will make you look more professional and help you attract new customers.

Here’s what you need to do to develop your brand identity:

1. Design a logo.

Creating the right logo for your business requires careful thought and consideration. It should be representative of your brand’s purpose and target audience, while also being memorable and distinct from competitors.

To start, you need a deep understanding of your business’s mission, values, and target audience. Think beyond what your company does and truly examine why you do what you do and who you do it for. This knowledge will serve as the foundation for your logo.

Conducting market research and identifying current logo trends can help you understand what works well for others and strategize on how to stand out. Then, start brainstorming design ideas that showcase what makes your business unique.

For instance, you could try writing out a list of words that best describe your business and what makes it special and then use those words as inspiration to start sketching ideas and concepts.

Once you have some sketches created, pick which ones you think are the best and share them with stakeholders, colleagues, and buyer personas to gather feedback and refine your design. After narrowing down a design, you’ll want to test its versatility and scalability to ensure it works well in different sizes and formats.

Pro tip: Check out this blog on designing your logo, and then try out different logo design features in Canva’s logo maker .

2. Develop a visual identity.

Your brand’s visual identity doesn’t stop at creating a logo — you’ll also need to establish guidelines for typography, color palette, imagery, and other graphic elements. The more consistent your brand is with its visuals, the more consumers will be able to recognize and trust it.

To get started, consider creating a brand mood board. Ask yourself: What kind of emotions do you want your brand to evoke? Is there a specific visual aesthetic that you want to emulate? This can help you gather visual inspiration that resonates with your brand.

Choose your color palette and typography wisely. Spend some time researching color theory , as color can have a major impact on how people perceive your brand. Make sure your typography is readable and looks good across different sizes and formats.

Additionally, you should create other visual assets such as patterns, shapes, illustrations, and icons that pair well with your color palette and typography.

Pro tip: If design and color palettes aren’t your thing, consider hiring a freelance graphic designer on LinkedIn or Fiverr to help you create your visual identity and incorporate it into your logo and overall design.

3. Craft a tagline.

In just a few words, your tagline should encapsulate your brand’s essence and communicate its value. Think of it as a written or verbal version of your logo. Both elements are created to immediately capture the attention of your audience. Even if consumers don’t remember anything about your product or service, they will remember a catchy tagline.

When crafting your tagline, keep it simple. You want your tagline to be memorable, so aim for a short phrase and focus on key benefits or unique aspects of your brand. Also consider using techniques like alliteration, rhyme, or play on words to make your tagline stand out — just make sure it aligns with the rest of your brand’s voice and tone.

Pro tip: This is another element of starting a business that could benefit from someone with experience. A marketing consultant or a content writer could help you establish a compelling tagline with the next step of developing your voice and tone.

4. Develop your voice and tone.

Your brand voice refers to the personality that your brand adopts in its communication with its audience. It provides direction on what to say and how to say it, allowing you to differentiate yourself and cut through the noise.

A well-defined brand voice helps create a distinct and memorable identity for your brand, allowing you to connect with your target audience on a deeper and more meaningful level.

When determining the appropriate voice and tone for your brand, remember that consistency is key. Ensure that your brand voice and tone align with your brand’s values, mission, and positioning. Alignment between your brand’s personality and its communication style is crucial for building trust and authenticity.

Pro tip: Adapt your voice and tone to suit the preferences and understanding of your audience. Additionally, use emotion and storytelling techniques to engage your audience and resonate with them.

5. Create brand guidelines.

Once you determine all of the previously mentioned brand elements, establish a set of brand guidelines that communicate how to appropriately use them. Having these rules and standards set in place ensures consistent and cohesive messaging and representation for your brand.

Get started by defining the rules for using your brand elements across different channels and applications, such as digital and print media, social media profiles, web design, packaging, and any other relevant materials.

Show practical examples of correct and incorrect usage scenarios to demonstrate the do’s and don’ts of brand representation. This helps stakeholders and users understand the guidelines and their application. You can also offer your team templates or mock-ups to ensure correct implementation.

Once the brand guidelines are set, distribute them to internal stakeholders and relevant external partners. To make sure everyone’s on the same page, take the time to review the guidelines with everyone and consider conducting training sessions if necessary.

As your brand evolves, so should your brand guidelines. Continuously review and update them to reflect any changes or refinements. Keep the guidelines easily accessible and communicate any updates effectively.

Pro tip: A writing style guide is a great place to start when creating brand guidelines. Check out this blog on brand style guide examples.

what business would you plan to establish why

Starting a business online is a little different from starting a traditional business. Here are some important steps for starting and scaling your business online.

1. Determine your niche and business idea.

Your business niche is the target focus area for your product or service. It’s important to choose a niche because customers like brands and businesses that specifically cater to their needs. Most customers are more likely to purchase products or services from a brand that provides personalized experiences.

When determining your niche and business idea, first identify your target audience and specify everything from their age to their interests. Then, use that information to figure out their principal need. If your product doesn’t resolve a specific need, your business will fail to get off the ground.

Pro tip: You should have a good idea of the market at this point. Use that knowledge to position yourself in a way that differentiates you from your competitors.

2. Conduct market research.

Conduct market research to understand what product or service you should offer, whom you should serve, and where you face the stiffest competition. From physical goods to digital downloads, understanding your target market and competitors will help you determine how to best position your product.

Your research should help you create a strong selling proposition . In other words, what makes your business unique? Why should someone buy from you?

Pro tip: Sometimes, market research is as easy as calling around to competitors and getting a quote on services. Make sure your pricing is competitive but not so low as to be unsustainable.

3. Learn online business laws.

While online businesses may require fewer licenses and permits than traditional businesses, there are still legal requirements that you will need to adhere to. Be sure to check:

  • What kind of business license (if any) do you need to start operations?
  • What legal structure makes the most sense for your company?
  • Are there any permits that you need to obtain?
  • Are there any inspections that you need to pass?
  • Do you need a sales tax license?
  • Are there any specific regulations applicable to online businesses only?
  • What are the laws regarding hiring contractors and hiring employees?

Pro tip: Check out this article for more information on starting an online business and navigating online laws.

4 . Make sure your business is insured.

Depending on your business type, you may be required by state law to be both licensed and insured. HVAC businesses have a lot of liability as they involve both plumbing and electricity. I spoke with several insurance agents before deciding on the best insurance for my business needs.

There are also many different business insurance types, such as:

  • Liability insurance.
  • Worker’s comp.
  • Property insurance (think your business location, tools, and equipment you use).
  • And more. Be sure to research these different insurance types and purchase the necessary ones.

Pro tip: Check out this article on small business insurance.

5. Create a website.

After handling the research, taking care of legalities, and honing your products or services, it is time to create your website . When creating your website, you will need to choose a strong ecommerce platform that will allow you to sell products online.

Pro tip: Check out Hubspot’s free CMS tool for website building here.

6. Set up shop.

Once your website is complete, it’s time to add products or services to your store. When adding your products, pay attention to product images and descriptions. Having a crisp image and a detailed but concise description will help your audience maneuver your website smoothly.

After you have finished setting up your store, it’s critical to ensure you offer a seamless shipping or delivery experience to your buyers. For example, you can use HubSpot to manage quality control before you ship products out.

Finally, you want to make sure everything is working before you hit the live button on your website. Make sure that everything is clickable and that all pages look good across all devices and browsers. Once you’ve checked that, you are ready to go live.

Pro tip: If you take credit card information on your website, you will need to abide by compliance laws that ensure the safety of sensitive data. Read more on credit card compliance .

7. Create a marketing plan.

You’ve created an awesome product, and now it’s time to get the word out. In other words, it’s time to grow your audience. There are numerous ways to reach your target customer, including:

  • Social media : Use hashtags and paid ads to expand your reach.
  • Influencer marketing : Send free samples to “celebrities” in your niche.
  • Facebook groups : Connect with your target market on this platform.
  • Google advertising : Put your products in front of people all over the web.
  • Content marketing : Publish blog posts to bring organic traffic to your site.
  • Word-of-mouth : Encourage customers to spread the word.
  • YouTube videos : Start a channel to showcase your products.

Pro Tip: Google ads and LinkedIn ads regularly offer discounts or free ad money; consider using these promos to try online advertisements out.

8 . Grow your business.

You’ve heard it said that in business, you’re either growing or you’re dying. Here are a couple of tips for growing your business online:

  • Reduce the amount of time it takes online viewers to receive value from you and your brand.
  • Answer the questions no one in your industry is answering — for example, a lot of companies won’t talk about pricing, forcing customers to keep looking for someone who will.
  • Create a dynamic website that changes with the times. Update your images and writing to reflect what’s happening with your business now, and ensure your website isn’t dating you.
  • Invest in content and SEO . They aren’t cheap, but they are really important for being found online, organically.

Pro tip: Check out this blog on how to become an SEO expert, according to HubSpot’s SEO team.

9. Watch your income and expenditures closely.

The first year of your business is an essential set point for discovering your overhead and your profit. Have a date in mind of when you want your business to start turning a profit and a solid plan for if you aren’t meeting that goal. Read further on potential exit strategies below.

Pro tip: Use a free business budget template to monitor your finances.

10. Plan for an exit strategy.

If you’re like me, you didn’t consider an exit strategy when thinking up your business. You probably assumed you’d run your business for the foreseeable future. However, economic uncertainty or unexpected success can both impact the end of your business. In fact, 90% of startups fail , which makes it a wise choice to know under what circumstances you would close down your business.

You could also experience unexpected buzz and success and be offered a buyout. A good exit strategy will plan for this as well. What amount of money would make selling worth it? Consider also how long you would have to run your business before considering offers. Some want to sell high and fast, whereas other business owners want to see where things go during a set amount of time.

An exit strategy could also include who you want to inherit your business, maybe family or an employee.

Pro tip: Check out this blog on the importance of having an exit strategy.

Next Steps: Getting Ready to Launch Your Business

I know from experience that being a small business owner isn’t easy, but with the right plan, you can set up your business for success. Be sure to check and know your requirements, have a solid business plan, and submit your legal paperwork before you take your business live. Once you have a solid business plan and the financing to execute your goals, you’ll be well on the path to launching a successful enterprise.

Editor’s note: This post was originally published in August 2019 and has been updated for comprehensiveness.

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Want Your Business To Thrive? Look At What Employees Want.

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There is one truth about the workplace that we all intuitively know but don’t say enough: People go to work for more than just a paycheck.

Employees want good pay, of course, but they also want to work in a place that gives them the chance to advance and grow in ways that go beyond finances. They desire purposeful work.

Instead of an issue to be solved, employers can think of this desire as an exciting opportunity. Businesses are in a unique position to help employees discover their strengths, grow their potential, and find fulfillment by contributing to something they find meaningful.

The employers that get this right will have an engaged and enthusiastic workforce that’s more innovative and wants to stay. To achieve that, however, businesses need to have a good grip on what employees want.

For workers, purpose and meaning are key.

The data is clear: employees want to work in a company where they find purpose and can apply their unique talents and potential to contribute.

Career advancement is a must.

By nature, people always want to do better and improve, which is why it’s no surprise employees care deeply about career progression opportunities when deciding where to work.

It’s good for business when employees contribute.

Companies benefit if they help their employees feel their work has purpose and there is opportunity for career advancement. Employees stay longer and commit more to their work in the short term. In the long term, people are motivated to propose new ideas and find more opportunities to contribute. They see their career success tied to the success of the business.

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what business would you plan to establish why

Small Business Trends

How to start a makeup line.

Personal brands play a big role in the cosmetics industry, especially with the rise of social media influencers and beauty gurus. These individuals often leverage their personal brand to launch their own cosmetic line, capitalizing on their loyal followers and unique aesthetic.

Personal makeup brands can bring authenticity, relatability, and a strong connection to consumers, which are invaluable assets in the highly competitive cosmetics market. Read on for a guide on how to start a business in this exciting industry.

The Cosmetics Industry Today

The cosmetics industry in the US is robust, and the beauty industry is continuously evolving. The global beauty industry is driven by factors such as consumer demand for innovative products, increasing emphasis on self-care and personal grooming, and the influence of social media on beauty trends.

With challenges like regulatory scrutiny and market saturation, the US cosmetics industry remains dynamic, with ample opportunities for new entrants to carve out their niche.

how to start a makeup line

Why Start Your Own Makeup Line?

There are several compelling reasons to start a makeup line and establish a beauty brand, including:

  • Passion for beauty and cosmetics: Many entrepreneurs who start cosmetic lines are drawn to the industry due to their love for makeup and skincare products.
  • Creative expression: Launching a makeup line in the cosmetics business allows individuals to express their creativity through product formulation, packaging design, and branding.
  • Business opportunity: The makeup industry offers significant potential for profit and growth, especially with the right combination of innovation, quality, and marketing.
  • Addressing unmet needs: Identifying gaps in the market or specific consumer pain points can inspire entrepreneurs to create unique products that fulfill those needs.

Initial Steps to Starting a Makeup Line

Developing a business plan for your makeup line.

Creating a business plan for a makeup line is one of the essential building blocks for new businesses to succeed . It involves several key components that lay the groundwork for your business’s structure, strategy, and financial planning. Here’s a detailed expansion on each of these components:

Small Business Deals

  • Look into common business structures and choose one that suits your business needs.
  • Analyze current makeup industry trends to identify potential opportunities.
  • Study consumer behavior to understand their preferences and needs.
  • Evaluate competitors to identify their strengths, weaknesses, and market positioning.
  • Identify gaps in the market that your makeup line can fill.
  • Determine the demographics and psychographics of your ideal customer, such as age, gender, lifestyle, and beauty preferences.
  • Develop a brand identity that appeals to your target audience, including your brand’s mission, values, and personality.
  • Choose a brand name, logo, and design theme that reflects your brand identity and resonates with your target market.
  • Decide on the types of makeup products you will offer (e.g., foundations, lipsticks, eyeshadows).
  • Define the formulations for your products, considering aspects like ingredients, benefits, and performance.
  • Design packaging that aligns with your brand identity and appeals to your target audience while also being functional and sustainable.
  • Develop pricing strategies that reflect the value of your products, considering factors like production costs, market positioning, and consumer willingness to pay.
  • Identify the most effective sales channels for your makeup line, such as online platforms, retail partnerships, or direct sales.
  • Develop a marketing strategy that includes a mix of digital marketing, social media, influencer collaborations, and traditional advertising to reach your target audience.
  • Plan promotional activities, such as product launches, events, and special offers, to generate interest and drive sales.
  • Source high-quality suppliers for ingredients and packaging materials, prioritizing reliability, sustainability, and ethical practices.
  • Choose manufacturing partners that can meet your quality standards, production needs, and timelines.
  • Set up distribution channels to efficiently get your products to market, whether through direct-to-consumer shipping, retail partners, or distribution centers.
  • Estimate initial startup costs, including product development, branding, legal fees, and inventory.
  • Project ongoing expenses, such as manufacturing, marketing, staffing, and operational costs.
  • Forecast sales based on market analysis, pricing strategies, and marketing efforts.
  • Plan for contingencies by setting aside a budget for unexpected expenses.

By meticulously planning each of these components, you can create a comprehensive business plan that not only guides the launch of your makeup line but also supports its growth and sustainability in the competitive beauty industry.

how to start a makeup line

Legal Considerations and Brand Protection for Makeup Lines

  • Choose a unique and memorable brand name that is legally available for use and registration.
  • Secure trademarks for your brand name, logos, and product names to protect your intellectual property.
  • Comply with regulatory requirements for cosmetics labeling, ingredient disclosure, and product safety testing.
  • Consider forming a legal entity, such as an LLC or corporation, to protect your personal assets and limit liability.
  • Draft contracts and agreements with suppliers, manufacturers, distributors, and any other business partners.

Funding Your Makeup Business Venture

  • Assess your startup costs, including product development, manufacturing, branding, marketing, and distribution expenses.
  • Explore funding options such as personal savings, loans, investments from family and friends, crowdfunding, or venture capital.
  • Consider bootstrapping or starting small to minimize initial financial risk and prove the viability of your makeup line before seeking external funding.
  • Prepare a comprehensive business plan and financial projections to present to potential investors or lenders.

how to start a makeup line

Starting a Makeup Line: Step by Step

These are foundational steps to consider when starting a makeup line, but each venture will have its unique challenges and requirements based on factors like product niche, target market, and business goals.

Building Your Makeup Line Business Model

Define your unique selling proposition (USP) and pricing strategy to differentiate your products in the market while ensuring profitability.

Identifying Your Target Market in the Cosmetics Industry

Conduct thorough market research to understand the demographics, psychographics, and purchasing behavior of your ideal customers, allowing you to tailor your products and marketing efforts accordingly.

Sourcing Ingredients and Manufacturers

Prioritize quality and consistency when sourcing ingredients and manufacturers, and consider factors like ethical sourcing, production capacity, and regulatory compliance.

how to start a makeup line

Exploring Private Label Options

Evaluate private label options carefully, considering factors like product customization, minimum order quantities, lead times, and the level of control you want over product formulation and branding.

Product Development and Testing

Invest in rigorous product development and testing processes to ensure the safety, efficacy, and quality of your makeup products, including formulation testing, stability testing, and consumer trials.

Creating Your Makeup Line Brand

Develop a cohesive brand identity that reflects your values, resonates with your target audience, and sets you apart from competitors, encompassing elements like brand name, logo, packaging design, and brand messaging.

how to start a makeup line

Marketing and Selling Your Makeup Line

Building an online presence for your cosmetics line.

Utilize an e-commerce platform or website startup guide to create a visually appealing and user-friendly website for your cosmetics line, optimizing it for search engines and incorporating features like product descriptions, images, customer reviews, and secure payment options to enhance the online shopping experience for your customers.

How Makeup Lines Can Leverage Social Media

Leverage social media platforms such as Instagram, TikTok, and YouTube to showcase your makeup products through engaging content like tutorials, product reviews, behind-the-scenes glimpses, and user-generated content, fostering a sense of community and authenticity while driving brand awareness, engagement, and sales.

Launching Your Makeup Line

Generate buzz and excitement around your makeup line launch by implementing a strategic marketing plan that includes teaser campaigns, influencer partnerships, press releases, and social media promotion. Then, create a memorable launch event or online release that captures the attention of your target audience and drives initial sales momentum.

FAQs: How to Start a Makeup Line

How much does it cost to start a makeup line.

The cost to start a makeup line can vary widely depending on factors such as product complexity, manufacturing processes, packaging design, branding, marketing efforts, and distribution channels. For example, developing a skin cream could require initial investments in formulation research, ingredient sourcing, manufacturing equipment, packaging materials, branding, regulatory compliance, and marketing. Costs for launching a single skincare product may range from a few thousand dollars to tens of thousands or more, depending on the quality and scale of the operation.

What are the challenges of entering the makeup business?

Some challenges of starting a makeup line include fierce competition in the cosmetics industry, high upfront costs for product development and manufacturing, stringent regulatory requirements for cosmetics labeling and safety testing, establishing brand credibility and consumer trust, securing retail distribution channels, and navigating market trends and shifts in consumer preferences.

Can a small makeup line compete in the cosmetic industry?

While the cosmetics industry is dominated by large established brands, small makeup lines can still compete by leveraging niche markets, focusing on product innovation and quality, building a strong brand identity and community engagement, utilizing digital marketing and social media channels to reach target audiences directly, offering personalized customer experiences, and cultivating strategic partnerships with retailers or influencers.

How can a new makeup business compete with established beauty brands?

Here’s a business startup checklist for makeup businesses that want to compete with larger brands:

  • Identify a unique niche or target market that is underserved by larger brands.
  • Emphasize product differentiation through innovative formulations, packaging, or branding.
  • Prioritize quality and customer satisfaction to build loyalty and word-of-mouth referrals.
  • Optimize digital marketing efforts to increase online visibility and engage with consumers directly.
  • Seek collaborations or partnerships with influencers, bloggers, or complementary brands to expand reach and credibility.

Can you start a makeup business solely online?

Yes, it is possible to start a makeup line solely as an online business. Launching a cosmetics brand online offers several advantages, including lower startup costs compared to establishing a physical retail presence, global reach and accessibility to a wider audience, flexibility in product offerings and marketing strategies, real-time customer feedback and analytics for informed decision-making, and the ability to scale and adapt quickly in response to market trends and consumer demand.

However, it’s essential to invest in a user-friendly e-commerce platform, effective digital marketing strategies, and exceptional customer service to succeed in the competitive online landscape.

Image: Envato Elements

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How to Create an Action Plan After a Cancer Diagnosis

Through her own journey with cancer, Kathy Giusti has learned how important it is to create an action plan after receiving a diagnosis. (Bing Guan—Bloomberg/Getty Images)

I t begins with something. A wonky test result. A spot on an image. A surprising remark from your doctor on an otherwise regular visit— there’s one thing I’d like to check again… I don’t understand… something is off.. We need to take a closer look…

The moment is vague, unsettling, an abrupt deviation from normal that sticks and you cannot unstick it. Whatever characterizes the moment, it’s inescapable. You hold on to the notion that it could be nothing, but everything going forward feels a little unscripted, uncertain, and perhaps unbearable.

Many people will develop cancer in their lifetime. If that happens to you or a loved one, there’s no need to panic. Your first step should be to take a deep breath. When I was 37 years old, my doctor told me that I had cancer of the bone marrow and there was no cure. Almost 25 years later, I was also diagnosed with breast cancer . Through my journey, I’ve learned how important it is to create an action plan after receiving this kind of news.

While a goal like “not being a burden” sounds like four simple words, it requires us to define what those “burdens” are and the specific what, who, and when it will take to address each one. It also requires us to do something most of us aren’t that great at— setting boundaries . You must accept that there are things you may not be able to do. You will have to say no and realize that people are going to have to help you. If you don’t let them, it could impact your health both physically and mentally.

Here’s how to get started.

Establish what you will need

After you’ve broken down your goals into more manageable objectives, you need to identify the resources and support that you will need to achieve each objective. In business, these are called critical success factors (CSFs) and they are essential to achieving your objectives. For example, if your objective is financial security, the CSFs might include creating a budget, reducing unnecessary spending, and increasing savings. You might look at taking out a mortgage or identifying financial assistance programs. Many pharma companies, hospitals, and foundations offer financial aid for patients in need, as well as other services.

Identify who you will need

Just as important as what you need to succeed is who. Who is critical to help you achieve your plan? How can they participate in helping you fulfill your plan? How will it impact them? Is there some sort of middle ground that can work for everyone? You need to identify all the people who can help you achieve your priorities, as well as the people whom your diagnosis directly impacts—spouse, immediate family, friends, employer, colleagues, and so on. You will likely need to depend on some of these people, maybe just a single individual, to execute your plan. They are your partners. Figure out the journey together, celebrate the wins, and always show gratitude for their support.

Know when you will need what and who

Your needs will vary depending on where you are in your journey. And the support and care you need will depend on a schedule neither you nor your caregivers can control. Therefore, it’s critical to get as much information as you can, as early as you can, so you can build a calendar with your caregivers. Start by asking your doctor what you’ll need and when. When do I WANT someone to be there? When do I NEED someone to be there? Ask about the timing and needs tied to each procedure. Will I have surgery right away or will there be a watch-and-wait period first? How difficult will that surgery be and how long might the recovery period take? Will there be a window of rest before radiation. If so, how long, and how difficult should I expect the radiation to be? Then make a calendar and share it with your support team. Who can be there when? Who can be a backup if someone can’t make it? Make sure they understand that the calendar can change and ask in advance for as much flexibility as possible. I’ve had procedures postponed for everything from hospital schedule changes to testing positive for COVID-19 . And again, always be grateful for their support.

Break down the plan into specific actions

It’s not enough to say “I won’t be a burden” or “I will be the best cancer mom or dad.” Translating broad needs and wants into specific concrete actions will make your plan more achievable. Start by breaking down each need and want into smaller, more manageable actions or steps. For example, if your want is to minimize the burden on your family, an action might be to find health services that are within easy driving distance from your home. Or scheduling appointments around the days your spouse can easily take off. If your want is to spend more time with your children or loved ones, an action would be to work with your doctor to avoid treatment during certain weeks. It’s not easy, and there will be times when even the best-laid plans must change on a dime, but it can help. If your want is to optimize quality of life in the short term, your action might be to go for a less aggressive course of treatment with fewer side effects. But if your want is to live longer, you might choose more aggressive treatment, sacrificing short-term quality of life for a chance at longer-term survival.

These actions should be specific, measurable, achievable, relevant, and time-bound. There’s a business acronym for this: SMART. A specific set of realistic SMART actions can be the best path to achieving your broader needs or wants. And regularly reviewing and adjusting these actions will help you stay on track as you make progress toward your ultimate goals.

Celebrate your wins

It’s important to celebrate the good moments, no matter how big or small. Making it through surgery or chemotherapy or radiation. Attending a special event. Or just having a good day, going on a nice walk, enjoying a meal with family or friends. It helps you to stay positive and it motivates your support team. It reminds you that you are making progress.

Adjust to your setbacks

You are on a roller-coaster ride. To some degree, you have to surrender to whatever happens—illnesses tend to do whatever they want to do. There’s only so much you can prepare for in advance and create that safety net. But if you watch and learn, you can adjust to make the peaks and valleys smaller. You will start to understand which appointments you can handle on your own versus those where you need a buddy. You will learn which days you feel too sick to work and which are okay. Adjust your plan accordingly.

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How Presidents Day went from George Washington’s modest birthday to big sales and 3-day weekends

Hundreds of revelers lined the streets of Alexandria’s Old Town on Monday to cheer on the annual parade to mark George Washington’s birthday. (Feb. 19)

Members of Alpha Company, 3d U.S. Infantry Regiment (The Old Guard), give a firing demonstration on the Bowling Green of George Washington's Mount Vernon on Monday, Feb. 19, 2024, in Mount Vernon, Va. The ceremonies at Mount Vernon were held to honor George Washington's birthday on Feb. 22, and President's Day. (AP Photo/Kevin Wolf)

Members of Alpha Company, 3d U.S. Infantry Regiment (The Old Guard), give a firing demonstration on the Bowling Green of George Washington’s Mount Vernon on Monday, Feb. 19, 2024, in Mount Vernon, Va. The ceremonies at Mount Vernon were held to honor George Washington’s birthday on Feb. 22, and President’s Day. (AP Photo/Kevin Wolf)

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Members of Alpha Company, 3d U.S. Infantry Regiment (The Old Guard), charge during a movement demonstration on the Bowling Green of George Washington’s Mount Vernon on Monday, Feb. 19, 2024, in Mount Vernon, Va. (AP Photo/Kevin Wolf)

FILE - John Lopes, playing the part of President George Washington, stands near the Washington Monument following a ribbon-cutting ceremony with first lady Melania Trump to re-open the monument, Thursday, Sept. 19, 2019, in Washington. Like the other Founding Fathers, George Washington was uneasy about the idea of publicly celebrating his life. He was the first leader of a new republic — not a tyrant. (AP Photo/Patrick Semansky, File)

FILE - The likeness of George Washington is seen on a U.S. $1 bill, March 13, 2023, in Marple Township, Pa. (AP Photo/Matt Slocum, File)

A statue of Abraham Lincoln towers over lifts overlooking Interstate 57 at the Anderson Equipment Rental Sales Service Company, Friday, Feb. 16, 2024, in Bourbonnais, Ill. (AP Photo/Charles Rex Arbogast)

NORFOLK, Va. (AP) — Like the other Founding Fathers, George Washington was uneasy about the idea of publicly celebrating his life. He was the first leader of a new republic — not a tyrant.

And yet the nation once again commemorated the first U.S. president on Monday, 292 years after he was born.

The meaning of Presidents Day has changed dramatically, from being mostly unremarkable and filled with work for Washington in the 1700s to the consumerism bonanza it has become today. For some historians the holiday has lost all discernible meaning.

Historian Alexis Coe, author of “You Never Forget Your First: A Biography of George of Washington,” said she thinks about Presidents Day in much the same way as the towering monument in D.C. that bears his name.

First lady Jill Biden speaks to the National Governors Association during an event in the East Room of the White House, Friday, Feb. 23, 2024, in Washington. (AP Photo/Evan Vucci)

“It’s supposed to be about Washington, but can you really point to anything that looks or sounds like him?” she said. “Jefferson and Lincoln are presented as people with limbs and noses and words associated with their memorials. And he’s just a giant, granite point. He has been sanded down to have absolutely no identifiable features.”

Here is a look at how things have evolved:

WASHINGTON’S BIRTHDAYS

Washington was born Feb. 22, 1732, on Popes Creek Plantation near the Potomac River in Virginia.

Technically, though, he was born Feb. 11 under the ancient Julian calendar , which was still in use for the first 20 years of his life. The Gregorian calendar , intended to more accurately mark the solar year, was adopted in 1752, adding 11 days.

Either way, Washington paid little attention to his birthday according to Mountvernon.org, the website of the organization that manages his estate. Surviving records make no mention of observances at Mount Vernon, while his diary shows he was often hard at work.

“If he had it his way, he would be at home with his family,” Coe said. “Maybe some beloved nieces and nephews (and friend) Marquis de Lafayette would be ideal. And Martha’s recipe for an indulgent cake. But that’s about it.”

Washington’s birthday was celebrated by his peers in government when he was president — mostly.

Congress voted during his first two terms to take a short commemorative break each year, with one exception, his last birthday in office, Coe said. By then Washington was less popular, partisanship was rampant and many members of his original Cabinet were gone, including Thomas Jefferson.

“One way to show their disdain for his Federalist policies was to keep working through his birthday,” Coe said.

The Library of Congress does note that a French military officer, the comte de Rochambeau, threw a ball celebrating Washington’s 50th birthday in 1782.

FILE - The likeness of George Washington is seen on a U.S. $1 bill, March 13, 2023, in Marple Township, Pa. (AP Photo/Matt Slocum, File)

The likeness of George Washington is seen on a U.S. $1 bill, March 13, 2023, in Marple Township, Pa. (AP Photo/Matt Slocum, File)

AFTER HIS DEATH

Washington was very aware of his inaugural role as president and its distinction from the British crown . He didn’t want to be honored like a king, said Seth Bruggeman, a history professor at Temple University in Philadelphia.

Still, he said, a market for Washington memorabilia sprang up almost immediately after his death in 1799 at age 67, with people snapping up pottery and reproductions of etchings portraying him as a divine figure going off into heaven.

“Even in that early moment, Americans kind of conflated consumerism with patriotic memory,” said Bruggeman, whose books include “Here, George Washington Was Born: Memory, Material Culture, and the Public History of a National Monument.”

MAKING IT OFFICIAL

It wasn’t until 1832, the centennial of his birth, that Congress established a committee to arrange national “parades, orations and festivals,” according to the Congressional Research Service.

And only in 1879 was his birthday formally made into a legal holiday for federal employees in the District of Columbia.

The official designation is as Washington’s Birthday, although it has come to be known informally as Presidents Day. Arguments have been made to honor President Lincoln as well because his birthdate falls nearby, on Feb. 12.

A small number of states, including Illinois, observe Lincoln’s birthday as a public holiday, according to the Library of Congress. And some commemorate both Lincoln and Washington on Presidents Day.

But on the federal level, the day is still officially Washington’s Birthday.

A statue of Abraham Lincoln towers over lifts overlooking Interstate 57 at the Anderson Equipment Rental Sales Service Company, Friday, Feb. 16, 2024, in Bourbonnais, Ill. (AP Photo/Charles Rex Arbogast)

SHIFT TO CONSUMERISM

By the late 1960s, Washington’s Birthday was one of nine federal holidays that fell on specific dates on different days of the week, according to a 2004 article in the National Archives’ Prologue magazine.

Congress voted to move some of those to Mondays, following concerns that were in part about absenteeism among government workers when a holiday fell midweek. But lawmakers also noted clear benefits to the economy, including boosts in retail sales and travel on three-day weekends.

The Uniform Monday Holiday Act took effect in 1971, moving Presidents Day to the third Monday in February. Sales campaigns soared, historian C. L. Arbelbide wrote in Prologue.

Bruggeman said Washington and the other Founding Fathers “would have been deeply worried” by how the holiday became taken over by commercial and private interests.

“They were very nervous about corporations,” Bruggeman said. “It wasn’t that they forbade them. But they saw corporations as like little republics that potentially threatened the power of The Republic.”

Coe, who is also a fellow at the Washington think tank New America, said by now the day is devoid of recognizable traditions.

“There’s no moment of reflection,” Coe said. Given today’s widespread cynicism toward the office, she added, that sort of reflection “would probably be a good idea.”

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    13. To share your business plans with coworkers and family. When you open a business, you will likely get a lot of questions about what you do from previous coworkers and family members. Drafting a business plan can help you answer these questions, sharing your goals and plans with them.

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  21. 6 reasons why you need a business plan before starting a business

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  27. How to Start a Makeup Line

    Developing a Business Plan for Your Makeup Line. Creating a business plan for a makeup line is one of the essential building blocks for new businesses to succeed. It involves several key components that lay the groundwork for your business's structure, strategy, and financial planning. Here's a detailed expansion on each of these components:

  28. How to Create an Action Plan After a Cancer Diagnosis

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  29. Presidents Day: How George Washington's birthday became a federal

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