The 3 Most Important Steps to Take When Starting a Small Business

Starting a small business can be overwhelming enough to make you want to spike your morning coffee with 100 proof tequila.

But that’s not to say you shouldn’t bother launching your business idea. In fact, the hard work of getting going should mean you’re doing something meaningful – something that will help a lot of other people while providing you with a comfortable (dare we say lucrative?) income from doing work you love.

A lot of people ask me what the first steps are to starting a new business. You might think I’m going to launch into a long tome about mindset and finding your ideal customer and defining your value proposition, but no – the 3 most important first steps to take before you start a small business are way simpler than that.

Really, stupidly simple. But essential.

The 3 Most Important Steps to Take When Starting a Small Business

Don’t Launch a Small Business without Doing these Three Things

  1. Register your business name. Can’t decide on a name? That’s okay. Register something. You can always change it later, or register a DBA (Doing Business As) entity once you’ve determined your branding. In Canada you can get started on the Industry Canada web site (though names also need to be provincially registered) and in the US, the Small Business Administration can guide you through the process. As for whether to register as a sole proprietor or some type of corporation – that’s a question you need to answer with the help of an accountant or a local small business resource office, but that shouldn’t hold you back.
  2. Open a business bank account. Once you have a registered business name (with some identifiable number to go with it), you’ll be able to get a business bank account at your local bank or credit union. Do this right away and put some money in the account, even if it’s just $100. You need to get into the  habit of separating your business and personal expenses right off the bat, so it’s important to take this step as soon as you can.
  3. Buy a domain name (at least one). If you can’t get the .com for your exact business name, you could try adding the word “shop” or “store” or some other relevant description to your business name and purchase a .com like “shoprenegadeplanner.com” or similar. You could get a .ca domain if you’re in Canada, or one of the vanity domain extensions that are available now. Buy a domain name that is easy to remember and easy to spell, so when you’re famous and being interviewed on podcasts all over the globe, people will easily understand what you’re saying when you state your web site URL. You can buy more domains later and redirect them to each other, so what’s important right now is that you park a place on the internet for your business to exist. Webnames is a great service to help with this.

The Best Part Is, These Things are Incredibly Easy

In fact, they’re probably the three easiest actions you’ll ever take as a business owner. So why do so many wantrepreneurs delay these steps?

Because completing them makes your business real.

They tell a really important entity (that is, the government) and another incredibly important organization (that is, the internet) that you’re serious about this thing. That you’re committed. That you agree to fill out a stupid amount of paperwork to do your business taxes every year.

If you haven’t done these three things yet, then I challenge you to get them out of the way (they can all take less than an hour of your time if you’re super efficient about it).

Then leave a comment on this post and ask me ONE big burning question you have about how to start your own business. What’s the NEXT thing you need to know? I’m working on something that will give you all the answers and I can’t wait to share it with you – but I need your feedback and input to make it as great as possible. So please leave a comment below!

  • Nab Kee

    Jessica – Thanks for keeping it simple. This is a process I have been struggling with for a while and you have inspired me to get moving. It is true that I was expecting some hype about my inner voice but you gave it to me straight. Thanks again.

    • Thanks Nab – any other questions you have right now? I might just answer yours in Friday’s blog post.

      • Nab Kee

        Jessica,

        I actually have a ton of questions. I am starting from scratch and want to get a fast start. I am at the about to jump stage. As an OCD perfectionist I naturally want to make sure everything is perfect before I jump. I know that isn’t realistic, but nonetheless it seems to be keeping me from making the leap. I do, at a minimum, want to make sure that the design of my company and product line will not come back and haunt me or slow me down later. Thanks for listening to my chatter.

        Nab

        • Nab, if you have a ton of questions, why not share some? You’ll get unlimited chances to ask questions in the $200 New Business Blueprint too so definitely stay tuned for that announcement on Monday.

  • Mike Walmsley

    Hi Jessica, an important distinction there! It is essential to keep ALL of your business banking activities separate from your “regular” bank account. By keeping all your business related income and expenses in one place it makes record keeping and yes the dreaded taxes at CRA or IRS so much easier to track and file.

  • Hi Jessica,

    An important question I have is why it’s necessary to do 1 and 2, especially if I’ve already done 3, and I already believe it’s real.

    • Hi Chris, believing you have a real business carries zero weight with government and tax agencies. You need a legal business entity in order to operate a real business. There are usually tax advantages to this as well, since certain kinds of business entities pay less income tax than you would if you just operated as a self-employed person.

      As for having a separate business bank account, see Mike’s comment below. It will become impossible to (accurately) separate your business from your personal expenses without separate accounts.

  • Ani Railkar

    Jessica,

    Thank you. That is helpful. I need to do #3, but my vision is to have multiple services on the same website or should I have a separate website for each service?

    Regards,
    Ani

    • Hi Ani, a lot of that depends on what customers you serve with each service. If your customer groups don’t have much (or anything) in common, you might want separate web sites, and possibly separate businesses. On the other hand, some companies do quite well with a simple splash page on their domain that gives people two options to choose from based on their needs.

  • Nikki H

    Hi Jessica, if you register as a DBA, what kind of identifying number do you get so you can open a business bank account? (I know if you have a LLC you get an EIN, but I wasn’t sure what happens if you just have a DBA.)

    (So. Many. Acronyms!)

    Thank you! 🙂
    –Nikki

    • Hey Nikki, it varies by bank and probably by state as well, but you’ll definitely need a Business Tax ID # or your SSN (more acronyms, argghgh) if you’re a sole proprietorship. You’ll also need some kind of business name filing document that proves you’ve registered the business name. I hope that helps!

      • Nikki H

        That helps a ton, actually! Thank you, Jessica!

  • Bobby Graham

    If you are just starting a business, it can be scary. This article gave a great rundown of a few key steps to take. I also think you should plan out your budget for the first 6 months. Even if it is low, having some kind of budget is a great start.

    • Yes Bobby that’s definitely a smart idea – even if your budget turns out to be totally wrong…it’s important to put some structure around your spending right away and create a benchmark. Great tip!

  • Just as important as having the right paperwork and money in place to open your business is a plan of how to market yourself. If nobody knows you exist, how will they know to find you? You don’t have to have a big marketing budget, in fact many small businesses start out with a zero dollar marketing budget. Utilizing free and low cost marketing options such as social media, eNewsletters and good old fashioned media publicity are essential to getting your name out there.

  • These steps are crucially important while running a small business and as you said doing these things are really easy.

    • You’re right, they are easy! People sometimes put them off just because they make the business real…and that’s kind of scary (understandably). But once it’s done you’re empowered to move a lot faster. Thanks for your comment!

  • Thiranya Ravi

    Hi Jessica, It’s true these 3 are the more important things that is needed to start a business. Thanks for explaining the importance of 3. Really helpful and thanks for sharing.

  • Kristy Glenn

    Thanks for sharing such a wonderful piece of information about starting a business. I must say that while reading your post I found my thoughts in agreement with the topic that you have discussed, which happens very rare.For more information, you can read this blog..
    http://www.businessandlifetips.com/2018/07/19/7-important-steps-to-startup-small-business/

  • Emma Worden

    These steps are very important, yet easy to be done. For example, if you struggle with choosing the most suitable name, you can contact a company for registering business name like https://easycompanies.com.au/business-name-registration/