When it comes to your career, it might be time to take matters into your own hands.
That’s why every independent writer should consider starting their own business. Whether you aspire just to have a client on the side here and there, or want your business to become your full-time livelihood, having a business entity unlocks financial benefits and will help both you and your customers take your work more seriously.
- You can start a business with low or no startup costs.
- Contrary to popular belief, you don’t need a fancy business plan to get started in business.
- However, you do need to validate your idea and confirm what you sell is something people actually want.
- New business formation can feel overwhelming, but once you have your ducks in a row, the operations piece is pretty straightforward.
- Having a business can positively affect your personal finances in ways that annual raises and side hustles simply cannot. A business is a financial risk, though.
Here’s what to keep in mind on your path toward becoming a successful business owner.
Facts and Figures About Small Business Owners
According to the U.S. Chamber of Commerce:
- Over 32 million small businesses currently exist in America.
- Average business owner income for incorporated businesses is $51,816.
- Average business owner income for unincorporated businesses is $26,084.
According to a Harris poll conducted by Zapier:
- Two in five Americans say that they have a side hustle.
- Side hustlers say they spend an average of 13.2 hours per week on their business.
- Average annual earnings from a side hustle was $12,689, but it should be noted that only 37% of respondents said they generate over $5,000 annually, so that average can be misleading.
A business structure can be a great way to cultivate financial independence and more vocational freedom in your life. Business structures also have income tax benefits, because governments want to encourage entrepreneurship. Here are the nuts and bolts of what you’ll want to put into place first.
How to Start a Creator-Centric Business: 7 Steps
Step 1: Validate Your Business Idea and Structure
Before you start filing paperwork or obsessing over logos, we have to first confirm that your business idea is actually viable. Do market research, start talking to prospective customers, and get a sense for what people would find valuable and actually pay for.
For a writing business, example business ideas might be:
- Ghostwriter: You help busy people or organizations publish written material under their name.
- Developmental editor: You work with authors to develop a book or proposal.
- Copy editor: You work with authors or publishers who need very precise proofreading for grammar and syntax, such as for textbooks or legal documents.
- Creator: You publish your work and attract an audience, then monetize this audience either through direct selling, display ads, affiliate links, or brand deals.
- Content marketing agency: You produce and publish content on behalf of a business to help them market themselves over time.
To ensure your business grows, we want to make sure there are customers who would actually purchase these services. Study where these customers hang out online and what they like to read about.
You might even land a client or two before you’ve officially developed your business structure, and that’s okay. Get proof that there is demand for your services and/or content.
Step 2: Form a Business Plan
Now that you’ve validated your idea, you can begin to develop your business plan. This gives you time and space to really think about your business model and who your target customers are.
A well-developed business plan is crucial for any aspiring entrepreneur. It serves as a roadmap that outlines your business goals and strategies for achieving them. Business plans typically include:
- An executive summary.
- A description of your product or service.
- Market analysis.
- Competitor analysis.
- A marketing and sales strategy.
- Financial projections.
- An implementation timeline.
A solid business plan will also guide you through the initial stages of your venture and help secure funding if needed. You’ll need these details if you want to bring angel investors, business grants, or other forms of funding into the picture.
Step 3: Form the Business Structure
Setting up legal and financial structures is essential for the success and legitimacy of your business.
First, you’ll want to determine the legal structure that best suits your needs. The different business structures in the U.S. are:
- Sole Proprietorship
- Limited Liability Company (LLC)
In addition to your chosen structure, you’ll also need to register your business name and obtain the necessary licenses and permits for your state. Some industries in medical or legal fields require additional general liability insurance or professional liability insurance, for example. If you plan to hire employees, you’ll also need to have workers’ compensation insurance.
Additionally, you’ll want to get an Employer Identification Number (EIN). You can apply for an EIN for free from the IRS here. Think of an employer identification number as being the social security number of your business.
Pro Tip:There are many types of business insurance, but if you’re just getting started, most of them won’t apply to you until later when you have assets you want to protect.
Step 4: Set Up a Business Bank Account
Once you have an EIN, you’ll be able to open a business bank account. Business bank accounts are important for tax purposes and will actually make it much easier to file taxes. These accounts will also protect you from personal liability and make it easier to open business credit lines, a small business loan, or a business credit card.
Most banks and other financial institutions work with small businesses as well as individual consumers. If you know you don’t like to pay close attention to your books, consider also getting accounting software that will track your transactions for you. Quickbooks, Bench, and Xero are common options for many business owners. You’ll thank yourself later when it comes time to pay taxes to the federal government, along with any other local tax obligations.
Takeaway:It’s important to keep your personal finances separate from business activities. Apps like Venmo and Paypal have added features in recent years to make this easier.
Step 5: Build Awareness with Marketing and Advertising
In today's digital age, having a strong brand and online presence is crucial for business success.
- Create a catchy and memorable brand name, logo, and tagline that resonate with your target audience.
- Develop a user-friendly and visually appealing website that showcases your products or services.
- Utilize social media and other digital marketing strategies to reach and engage with your potential customers.
A robust online presence will help you establish credibility and attract customers. Ensure your marketing plan is built around a customer funnel to ensure a smart marketing strategy.
Step 6: Offer Your Professional Services, Programs, or Products
Effective sales and marketing strategies are vital for attracting and retaining customers. Identify your target audience and tailor your business plan and marketing to appeal to them. Utilize both traditional and digital marketing channels, such as social media advertising, content marketing, email marketing, search engine optimization (SEO), and paid advertising to reach your target market.
Also ensure you have a clean point of sale system (POS) that can accept credit card payments smoothly and without any operational hiccups. Many businesses use Stripe for this.
Step 7: Know the Basics of Self-Employment Tax
If you conduct business, you have to pay taxes on those earnings, even if you don’t have an official business structure. The U.S. classifies unincorporated business activity as sole proprietorship. Additionally, when you receive payments as an independent contractor, you pay the full burden of employment taxes, whereas in an employee arrangement the employer will pay half.
LLCs, corporations, and sole proprietorships all have different tax conditions to consider. Consult with a financial advisor or accountant on how to set up the best structure for yourself.
Frequently Asked Questions
How Can I Start a Business with No Money?
Offer free trial services to businesses, either directly or through social media. If you’re offering services, you can launch without any upfront costs, thanks to the power of platforms like social media.
How Can a Beginner Start a Business?
Start with what you already know and can do well. Focus on creating a clear offer that has a finite beginning and end. Offer your services to other businesses or individual consumers, then slowly raise prices as you become more experienced and refined.
Is $1,000 Enough to Start a Business?
It depends on the business type. $1,000 is more than enough to get a first coaching client, but it’d be nowhere near enough to get a furniture store off the ground. In most cases, software or service-based businesses will have lower initial overhead than product-based businesses.
What Do I Need to Do First to Start a Business?
Validate your business idea. This ensures that you don’t build a business that doesn’t actually do anything. Help solve your customers’ problems and you’ll be well on your way.
Start a Business and Make It Official
Your business can make $1, $1,000,000, or anything in between. By making things official, you'll be more confident, which will result in you doing your best work. ◆
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