When Sarah Williams decided to start a small business, she didn’t do so with the bravado of a VC-funded app launch or the “grand opening” of a store. Instead, it was the realization of a dream to use her skills to build a company all her own.
“After working as a full-time bookkeeper for a construction company for a number of years, I realized that bookkeeping was my true calling, and the only way to reach the income level I wanted was to expand and take on multiple clients at once,” said Williams of her full-time business, Bookkeeper By Trade.
Williams started slowly with a few clients in real estate and the trades. She focused on how she could improve their processes and educate them at the same time.
With five years of direct experience in bookkeeping, her detailed approach and niche target market helped her establish the business quickly.
“When I first thought of starting, I was certain there was someone out there doing the same thing as me,” she says. “But it turned out there wasn’t! If you have a skill that you think could help other people improve their business or lives in general, then go out, share it and make money in the process.”
Want to learn more about starting your own small business? Whether you’re looking to launch a side hustle or a full-time pursuit, this guide will help you:
Ready? Let’s go!
Get clear on what you’re selling
If you’re reading this guide, we can only assume you have some idea of what products or services you want to sell (or are already selling).
Maybe you work in IT for a large company and want to branch out and start a consulting business. Or you’re opening an online shop that sells coconut-based soaps. Or you just don’t want to have a boss anymore.
Whatever your idea — and however developed it is — it’s essential to put some thought into what you’re going to deliver. What makes you different from others in your industry? What are your superpowers? How can you package and sell your products or skills in a way that helps and entices others?
Businesses that succeed are good at differentiating themselves in a world where it can be hard to get anyone’s attention.
To find your niche and get closer to a product or service “fit,” go through the steps below. Write down your findings along the way:
Create 1-3 detailed buyer personas
Focus on both demographics (age, location, education level) and their likes, dislikes, and customer habits. What problems do they need to solve? What motivates them to seek help? If what you’re selling is more of a want than a need (e.g. small-batch chocolate bars), focus on why what you’re offering would be appealing to them based on their other consumer choices and habits.
Research your competition
Is anyone offering something similar? (Probably yes.) Check reviews on sites like Yelp, Trustpilot, Google, and Facebook to see what your competitors are doing well and not-so-well.
For example, Sarah Williams didn’t want to be a bookkeeper who only filed reports and reconciled accounts. Instead, she differentiated herself by offering packages that included those services alongside QuickBooks training. This “add-on” helps businesses who can’t afford a full-time bookkeeper have more control and understanding of their finances.
If you’re selling products, check other ecommerce sites or marketplaces to see where you can stand out. You can also read product reviews to see what people are looking for.
Do keyword research
Find terms people are using to find your product or service. Start by searching in Google and seeing what queries are suggested in the search bar, or that appear at the bottom of the page. Then try a free keyword tool or a website like Answer The Public to explore questions and comparisons around what you’re offering.
You might refer to your products or services in one way. But is that the way your target customers think about them? Are you providing what they want but calling it something different? Is there a particular aspect of your business that’s extra appealing or interesting to them?
Write a simple mission statement
The statement should boil down what you do and why to help guide your business in a clear direction. Examples:
“I help [target audience] by offering [these products/services] so they can [results and benefits you want to drive].
“I inspire [target audience] to [take this action/feel this emotion] by offering [these products/services].”
Talk to friends, family, or past clients who fit your target audience
Ask them questions about their needs and wants in relation to what you’re offering. Would they pay for this type of product or service? How much? Where would they go if they were looking for it now?
The goal of the above research is to develop deep empathy for your target client and what they need. The question you have to keep asking yourself is this: How are you going to get to the right people — and enough of them? This information will help you determine how to position your business for success.
Gather what you need to launch
Every business is different, but after you’ve researched your idea and identified what you’ll deliver to customers, it’s time to get a few practical items checked off your list.
- Choose a business name. It can be tempting to use your own name when starting a business, especially a service-based one. But if you want to stand out, consider something more creative — a few customer names we love include Expansion Pack (recruiting services), The Lash Box (eyelash extensions), and Magic Pixies (cleaning company). Check out our guide to coming up with a business name for more ideas, or try our free Business Name Generator.
- Decide on your business structure, register your business name, and get appropriate licenses. Business structures vary depending on where you live, but common types include sole proprietorship (the easiest to set up!), partnership, or corporation. Find out if your state, province, or country requires you to register your business (we recommend searching “Register a business + your state/province/country name). Then visit the official government site to see what steps you need to take. If you want to incorporate your business right away (or trademark it), you’ll need to consult or hire a lawyer, or use a service like Rocket Lawyer. If you’re still testing your concept, you can come back to this step later.
- Scope out a domain. Once you know you can claim a name, see if you can get the .com address on sites like GoDaddy. If you can’t, it’s time to get creative. Use your country (.ca, .uk), add a suffix to your name based on your industry (e.g. “creative,” “consulting,” “services”) or location (e.g. “Toronto”), or use a domain with .co. Note: You can buy your domain from GoDaddy or other hosting sites, or from the website builder you choose to use (see Part 2).
- Make a logo. This is the fun part! Start with inspiration: What are some common elements of design and branding in your area of business? What types of design do people in your target audience like? If you need ideas, check out our logo inspiration pages by industry. Simplicity is the name of the game when it comes to making an impactful and long-lasting logo. (More on this in Step 3.)
- Open a business bank account (recommended). While business bank accounts charge more fees than personal accounts, having one account to track your expenses and revenue makes life easier in the long run, especially when it comes to tax time. This is also the account you can connect to a payment processor like PayPal or Stripe if you decide to accept payments online. When you’re ready, you can also order cheques or apply for a credit card from this account. Again, if you’re still testing your concept, you can wait until later to do this.
- Choose a tool for tracking your finances. Start your business on the right foot by picking a tool or system to track your finances. It’s easy to let this one slip but trust us — getting your financial processes figured out from day one will help you determine the health of your business as you grow.
Ready to start building a brand for your small business?
Other startup costs and considerations
- Equipment/supplies – Are you running a photography business, snow-plowing service, or something that requires an upfront investment in professional equipment? If so, this could be one of your biggest costs. Even if you’re running a smaller-scale service business, you’ll likely need supplies — a professional cosmetics kit and brushes if you’re a makeup artist, for example, or a toolkit and color swatches if you’re offering interior design services.
- Products/inventory – Are you making or sourcing products to sell? Figure out how much inventory you need to start, taking into consideration minimum orders you can place with suppliers or vendors. Who will you order supplies or stock from and how much will you pay for wholesale pricing and shipping?
- Packaging – If you’re running an online store and shipping items yourself, you’ll need to source packaging like boxes, padded envelopes, tissue paper, stickers, packing tape, shipping labels, etc. You can always start with plain packaging and upgrade to branded packaging as you grow!
- Certification/training – If you’re running a coaching, teaching, or real estate business — or any other type of service where proof of skills and training is important — you may have to complete a course or update your credentials.
- Insurance – Not every business needs insurance. But if you’ve purchased expensive equipment, or if you could be held liable for injuries (e.g. yoga, personal training), research what options are recommended for your industry.
- Business cards – Depending on if you run your business online, in-person, or both, you’ll need to consider business cards, brochures, and promotional cards to drop off at coffee shops, community centers, or wherever your target audience hangs out.
- Website – You’ll need to purchase a domain, subscribe to a hosting service (or use an all-in-one website builder), and potentially pay for a premium theme or template — or hire someone to get your website launched. If you’re an ecommerce business, you’ll want to make sure you’re building a website on an ecommerce platform with payment processing options. (More on websites in Step 3)
- Online tools – You’ll likely need a few tools to run your business more smoothly, especially if you’re a one-person operation. Think of scheduling tools, online phone services, accounting software, or payment processors for online transactions. For certain industries, you may also need subscriptions to software like Adobe PhotoShop or QuickBooks.
- Physical space – Where will you run your business? Home-based offices are a great, low-cost place to start, but you may need to rent a locker to store inventory or consider a co-working space to meet clients.
- Travel – Do you need to travel to clients if you’re a service-based business? If so, factor in the cost of a working vehicle or public transit.
How much do you need to invest?
When you’ve made the list of what you need to start your business, create a spreadsheet with estimated costs beside each line item, so you know what your initial investment will be.
Remember: It’s a good idea to start lean as you work on getting your first paying customers. We love the book The $100 Startup for low-cost business ideas and inspiration!
If you’re still working full-time and starting a side hustle, figure out an amount you want to save each month toward your business.
Organize your finances (or find ways to earn extra income) and give yourself a deadline to check everything you need to start off the list. You’ve got this!
Ahh, pricing. The tricky business of putting a profit-making dollar value on your products or services AND hitting the range of what people are willing to pay for what you’re offering. Here are three questions to ask when setting pricing:
- What’s the competition doing? Whatever strategy you choose, one of the best ways to research and decide on pricing is to compare your services to competitors. Can you come up with a more premium (or more affordable) service or package? How does your experience line up with these providers? What does their quality of work look like compared to yours?
- What’s my time worth? Running a business, either full-time or on the side, takes a lot of energy and hard work. Don’t make the mistake of undervaluing your time by undercharging for your services or products. Calculate the cost of providing your offering, then add in your desired profits. Don’t forget to factor in your expenses from Part 1, including things like software, office space, supplies, and insurance. And don’t forget all your earnings are before taxes!
- How can I show value? The most important thing you can do to encourage clients to pay what you want is to demonstrate value. When you set up your website, look for opportunities to stand out from the competition with your offerings. Over time, you’ll get better at determining what’s involved in your work and adjust your pricing accordingly.
Pricing for service-based businesses
If you’re running a service-based business, determine if you’re going to charge an hourly rate or package pricing. You may also use a combination of these pricing tactics depending on your business.
For example, Sarah from Bookkeeper By Trade decided to sell bookkeeping packages instead of charging hourly pricing. As she explains:
“I went with packages instead of charging hourly for two main reasons. First, a lot of time with bookkeeping, things can be confusing or difficult. Things don’t download correctly, transactions don’t match, all sorts of computer and bank errors can occur. Even though these things happen for seemingly no reason, it does take extra time.
I want all of my client’s financial information to be perfectly correct; no need for them to pay for extra hours because I just couldn’t let that $0.10 error go.
The other reason has to do with applications my clients might need. I include the cost of QuickBooks Online in all of my services because I want my clients to have the best possible version of an app for their business. I want them to have it without fretting about the cost of any of it.”
Pricing for ecommerce businesses
If you’re an ecommerce business, your pricing will largely depend on your cost of materials (if you’re making the product) or the wholesale costs you pay to manufacturers or suppliers, who will often provide a suggested retail price for goods.
Tracey Reed, owner of the online lingerie store Beguile Intimates, talks about how she came up with her pricing model:
“We had to look at our competition to make sure we were competitive. But I also chose to go with suppliers with reasonable wholesale prices, so I could pass those savings onto my customers. My suppliers will also have discounts at different times of the year, at which time I pass those savings along to my customers by either discounting prices or offering seasonal sales.”
What’s your break-even point?
One of the most important things to figure out when setting pricing is your “break-even” number. How many items/packages/hours of work do you need to sell to cover the cost of your monthly operational (or recurring) expenses like software and rent?
In other words, how much revenue do you need to bring in to “break even” so that when you surpass that number, you’re making money? Make sure you have a financial cushion for taxes, as you’ll have to deduct those yourself! (Here’s a formula to help you figure it out.)
Getting clear on your break-even number will help you determine if the pricing you’re setting is realistic.
Build your brand and online presence
If you’ve done the work in Step 1 of finding your niche, writing your mission statement, and identifying your target audience, you’re well on your way to building a brand that resonates with potential customers.
As a small operation, your brand identity starts with a logo and a website. You can then branch out into social media channels and marketing materials like business cards and brochures.
Building your brand is one of the most exciting parts of starting a business, but it can also be time-consuming. The important thing is not to lose momentum!
- Create a logo. A logo sets the foundation for all your future branding efforts and is the visual asset you’ll use the most. Opt for a simple design that translates well across channels. It should also match the personality of your business and audience (go back to your customer personas!). Our logo maker is a great place to start (and it’s free to try!).
- Make a website. A website is where people will discover and learn about your products or services. Make yours count! Use a website builder to get started on your own. You can also hire someone to help you if you’re looking to build a more complex website or don’t have the time to make one yourself. Read our guide on how to make your own website >
- Get on social media. Going full-tilt on social media doesn’t make sense for every business. That said, it’s a great place to build your brand voice, find potential customers, and share content that’s relevant to your niche. Choose 1-3 channels to focus on and see where you see the most engagement with your target audience. Read our guide on how to use social media for business >
After you have your logo, you’ll know your brand colors and can use them across your other marketing materials.
You can also add it in your email signature, set it as your desktop wallpaper, and get business cards. Or do even more offline branding by printing your logo on letterheads, stickers, clothing, and more. You’ll know what works best for your industry!
Find your first customers
After you’ve checked off Steps 1-4, you can find your first customers and grow your business!
Here’s how to get started for free:
- Spread the word. Send a personal invitation to friends and family to let them know about your business. Offer them a discount or free consultation as a way to build your experience and spark word-of-mouth growth. If you have industry contacts from previous jobs or networking events, reach out to those people, too!
- Browse online classified ads. The bookkeeper we introduced at the beginning of this guide found her first clients through Craigslist ads. Many people think they need to hire an employee for bookkeeping when they can hire an independent contractor for less. If this is the case for your business — think services like social media management, videography, and event planning — online ads could be a great place to find prospects.
- Get listed on local directories. If you deliver services locally and in-person, add your listing on directories like Facebook Pages and Apple Maps, ensuring you include an accurate business name, address, and phone number. You’re likely to appear on local searches in a short time.
- Start blogging. Blogging takes work and doesn’t typically deliver instant results. But developing industry-related content can position you as an expert and give you a supply of helpful information to share. Start by answering common questions you get from customers about your products or services — They Ask You Answer by Marcus Sheridan is an in-depth book on how to do this.
- Use social media. After launching your website, open accounts on social media platforms that your target audience uses most regularly. Join groups, include a link to your website in your profile, and start sharing content that’s relevant to your audience.
Don’t try these free customer acquisition tactics all at once or you’ll get overwhelmed! Pick 2-3 that make the most sense for your business. Then put your focus there for a set period (we recommend a month) and see what results you get.
For more ideas on how to find customers, see these real-life examples from business owners.
And there you have it! If you’ve been thinking about starting a small business, there’s no time like the present.
The number of tasks to complete before launching can seem daunting. But if you carve out a set amount of time each week, you can get them done. Remember that slow, steady progress is better than no progress.
Do your research, plan carefully, and start a business that makes fantastic use of your skills and interests — and more importantly, helps people (or treats them to something special). You can do it!
Last thing: Don’t forget to learn as you grow — the faster you’re able to adapt and find opportunities to offer the best products or services to your target market, the better off you’ll be.