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How to start a business: the simple guide

How to start a business simple guide

Figuring out how to start a business can feel like an uphill battle. It’s easy to get stuck thinking you need a groundbreaking concept or a hefty investment to succeed. Fortunately, that’s not the case.

In this post, you’ll learn 11 practical steps to starting a business (even without a clear idea or large budget).


11 steps to starting a business for the first time

Starting a business doesn’t have to be overwhelming. This step-by-step guide outlines exactly what you need to do, from validating your idea to launching your first product or service.

Here are 11 of the most crucial steps to starting your own business.


1. Identify your business idea

Many business owners start with an idea for a product or service that solves a problem, fulfills a need or makes life easier for their target audience. You don’t need to reinvent the wheel. Just find something you can improve upon or do better than others.

A clear and realistic business idea focuses your efforts and minimizes unnecessary financial risks. It defines:

  • What you’ll offer

  • Who you’ll serve

  • How you’ll stand out from competitors

Let’s say you’re proficient in design software like Photoshop. You may use your existing skills and offer a graphic design service to meet a growing community’s or online demand.

Relying on your expertise or existing tools can reduce startup costs.

  • Start with your know-how: Think about your skills, experiences and interests. Can you turn a hobby, talent or past job experience into a business?

  • Solve a specific problem: Talk to potential customers or look online (forums, social media, reviews, etc.) to identify pain points to address.

  • Keep it simple: Start small with a single product or service to test the waters.

Write down all your potential ideas and research and narrow down the most viable (i.e., cost-efficient, easy to get started, etc.). If you’re struggling, try free exercises like “Finding Your Ikigai”:

How to start a business Ikigai diagram


Create a Venn diagram with four circles labeled “You love it”, “You are great at it”, “The world needs it” and “You are paid for it”. List answers in each and look for overlapping themes where all four intersect.

Note: If you have the resources, develop a unique offering that requires some investment (e.g., a patent or proprietary design). This makes it harder for competitors to copy your idea, helping you stand out in the market.


By starting with an idea matching your skills and budget, you’ll set yourself up for a manageable and rewarding business.

2. Conduct market research

Market research involves understanding your target audience, competitors and the demand for your new business. It’s about learning what customers want, what others already offer and where market gaps exist.

Without market research, you risk investing time and money in an idea that might not work. Research helps you validate your idea, identify opportunities and make informed decisions that align with customer needs and market conditions.

If you have some investment, hire a market research firm or offer paid surveys. Thankfully, you don’t need to spend money on formal studies to get substantial insights.

Instead, you can:

  • Identify trending topics or products using free tools like Google Trends

  • Run polls on social media or contact potential customers directly for feedback

  • Ask questions in online communities to pinpoint your target market’s pain points or preferences

For example, you might use Google Trends to assess consumer demand for your new idea. Let’s say you’re considering developing a new note-taking app. Exploring this keyword suggests search interest is minimal (likely because many people use their smartphones for the task).

How to start a business Google Trends


The term “task manager app”, on the other hand, has far more interest. You may use these insights to branch out your idea to meet a broader target market.

How to start a business Google Trends comparison


You can also analyze competitors yourself. Look at similar businesses in your niche and note how they market their products or services, what they’re doing well and where you could do better. Compile all your insights in a spreadsheet to stay organized and easily make updates.

3. Write a business plan

A business plan is a roadmap for your company. It outlines your mission and goals, how you’ll make money and how your operations will keep you on track.

A well-thought-out plan focuses your efforts, allocates resources wisely and attracts potential investors, lenders or partners. It can also give you clarity on how to grow your business sustainably.

There are two main types of business plans:

  • Lean business plans are short, flexible documents that outline the key elements of your company

  • Traditional business plans are comprehensive documents that anyone investing or lending will need to see

If you have a new idea, use lean business plans to avoid unnecessary complexity while setting a clear direction.

For example, you can use Pipedrive’s free business plan template to fill in crucial components (e.g., your proposed pricing strategy and value proposition) and organize your ideas.

Here’s an example of what that plan could look like:

How to start a business lean template


If you’re starting with no money, use your plan to outline how you’ll crowdfund, take out a personal loan or apply for business grants. If you have funds, hire a consultant or buy business planning software to create a polished, investor-ready document.

However you create your plan, set SMART business goals based on your research and resources.

How to start a business Pipedrive SMART goals

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Download your free business continuity plan template

Prepare your own business continuity plan using this free spreadsheet


4. Choose a business structure

Your structure (or business entity) determines how your company is recognized legally and taxed.

Your choice of structure affects your personal liability (i.e., whether or not you pay for damages or injuries to a third party), tax obligations and compliance requirements.

Selecting the right one can save you money (i.e., how much the state charges you) and simplify your operations (i.e., the complexity of your ongoing paperwork).

Five typical structure options include:

Sole proprietorship

A simple, low-cost structure where one person owns and runs the business (and is personally responsible for all debts and obligations).

Limited liability company (LLC)

A flexible structure with personal liability protection for owners (also fewer formalities and tax options than corporations).

Corporation

A more complex structure that’s legally separate from its owners (includes strong liability protection).

Partnership

A business owned by two or more people who share profits, losses and responsibilities.

Nonprofit

A nonprofit serves a public benefit (rather than generating profit for shareholders) and reinvests income into the company’s mission and activities.


If you’re on a budget, start as a sole proprietorship or single-member LLC. These legal structures often have lower upfront costs and fewer compliance requirements. Each state has its own fees and requirements.

For example, Californian sole proprietorships can start a business for virtually nothing. Then, LLCs must pay a franchise tax of $800 per year (even as a single member).

As you scale, consider becoming an LLC for liability protection (i.e., you won’t be personally responsible for company debts) or a corporation to fundraise capital. Many investors prefer corporations because they can more easily buy and sell shares in the business.

Consulting a business attorney or accountant can clarify the long-term implications of your choice.

Many states also offer resources (e.g., your city’s Chamber of Commerce) and free advice to help new small businesses choose the right structure.

5. Register your business

Registering your business involves securing your name and filing necessary documents. This practice ensures your new company is legally recognized and compliant with state regulations.

For example, you can register your business in Texas because you live there. Another option is to register somewhere with lower fees (e.g., Kentucky or Arizona) if your business can operate from anywhere, like an online store or consulting service.

Let’s say you live in Pennsylvania. You might register your business in Delaware because it’s known for low registration fees, a business-friendly legal system and no sales tax.

Here are three top small-business-friendly states and why you might choose them:

  • Delaware. Affordable registration, strong legal protections for businesses and no state sales tax.

  • Wyoming. No state income tax, low filing fees and privacy protections for business owners.

  • Nevada. No corporate or personal income tax and business-friendly policies.

Before you do, check your chosen state’s business registry or free name-checker websites to confirm your name isn’t already used. For example, you can run a business name search on Northwest Registered Agent or ZenBusiness.

You can also register a “doing business as” (DBA) name that’s different from your legal business name. For example, “John Smith Enterprises” could also register a DBA of “Smith’s Landscaping” to better reflect its services.

To save extra cash at this stage, skip premium name registrations (e.g., trademarks or high-demand domain names) unless you’re building a brand where uniqueness is critical.

If your budget allows, work with a registered agent or service to handle registration paperwork for the Secretary of State more efficiently.

6. Obtain startup licenses and permits

Many companies require specific licenses or permits to avoid fines or penalties. These requirements ensure your business operates within federal, state and local laws.

For example, small businesses in New Hampshire are exempt from sales and income tax. However, they have to pay one of the highest property tax rates in the country.

For online businesses, licensing requirements depend on what you sell and where your customers are located. Some states demand home-based business licenses (even for e-commerce), while others only require permits if you ship physical goods.

Here are three tips to make sure your new company is covered:

  1. Research requirements. Check federal, state and local guidelines to identify the licenses, permits or self-employment tax ID numbers you need.

  2. Use free resources. Local small business development centers (SBDCs) or government websites like the US Small Business Administration (SBA) can guide you through the process.

  3. Start small. If your business can operate with minimal licensing, focus on the essentials and upgrade as needed.

For example, here are some of the topics covered on the SBA.gov website:

How to start a business SBA topics


Having the correct licenses and permits from the start allows you to focus on growth. If you can afford it, consult an attorney to handle more complex compliance needs.

7. Open a business bank account

A business bank account separates your personal and business money, making accounting and tax preparation easier. Separating finances maintains accurate records, simplifies bookkeeping and builds credibility with vendors and customers.

There are two types of business accounts you should consider:

  • Checking accounts are essential for day-to-day operations (e.g., receiving payments, paying bills and managing cash flow)

  • Savings accounts are useful for setting aside funds for business taxes, emergency reserves or long-term investments

Prioritize a checking account when starting out. Once your business generates steady revenue, open a high-yield savings account. This builds financial security while earning interest on your reserves (i.e., letting your emergency funds and tax savings grow passively over time).

Note: Apply for a business credit card as a short-term financing option. It can cover immediate expenses (e.g., inventory, supplies or marketing) while you work to generate revenue. Try to pay off the balance quickly to avoid accumulating debt.


If you’re starting with funds, explore accounts that offer added perks like cash-back rewards or integrated financial tech (like invoicing tools).

Many financial institutions offer free or low-fee business accounts for startups. Online banks with fewer overhead costs are a great money-saving option. Have your business registration and identification on hand for a quicker setup.

8. Research the right business management software

Business management software streamlines operations, including accounting, sales, customer relations and project management. Using the right tools saves time, reduces errors and improves efficiency so you can focus on growing your business.

Small business owners need tools that assist with crucial jobs like:

Look for free trials or entry-level plans for software that handles multiple functions. For example, Pipedrive offers sales, email marketing automation and project management all in one to reduce the need for several tools.

Note: You can also use Pipedrive’s Marketplace to integrate accounting platforms (e.g., Xero or QuickBooks) or website-building tools (e.g., Wix or Wisepops).


Pipedrive’s CRM

Finding customers and closing sales fast is a must when starting a business. With Pipedrive’s intuitive interface, you can see where every sales opportunity stands and take timely action to close deals.

How to start a business Pipedrive CRM


Pipedrive’s CRM helps you:

  • Organize leads in one place so no potential customer slips through the cracks

  • Visualize your sales pipeline to see precisely where deals are and what actions to take next

  • Track follow-ups and deadlines to stay on top of every opportunity

Centralizing sales tasks in one platform means no longer managing spreadsheets or juggling multiple tools.

Download Your Sales and Marketing Strategy Guide

Grow your business with our step-by-step guide (and template) for a combined sales and marketing strategy.

Pipedrive’s Campaigns

Growing a customer base takes time, especially if you do everything manually. Pipedrive’s Campaigns feature saves hours while keeping your communications professional and effective.

For example, you can create professional emails introducing your business to sales prospects in minutes using simple drag-and-drop elements – with no design experience needed.

How to start a business Pipedrive Campaigns


The AI email writer features allow you to personalize outreach without extra effort, making customers feel valued even as your list grows.

By tracking email strategy performance (like open and click-through rates), you’ll see what messages resonate to refine your efforts.

Pipedrive’s Projects

Whether you’re coordinating a product launch, managing a small team or juggling freelance work, Pipedrive’s Projects can help.

Use this project management solution to break big goals into smaller, manageable tasks, set clear deadlines and assign responsibilities (even if you’re a team of one).

How to start a business Pipedrive Projects


Tracking progress ensures nothing gets overlooked, especially during a busy startup phase. Pipedrive aligns your projects with your sales goals, ensuring every task contributes to your growth.

When your business demands more features or scalability, simply upgrade to a more comprehensive plan.

9. Set up your business insurance

Protecting your business from unexpected risks is crucial, even when starting with limited resources. Business insurance safeguards your assets, reduces liability and prepares you for potential setbacks.

Unexpected events like lawsuits, accidents or natural disasters can threaten your business’s survival. The right insurance coverage minimizes financial risk and provides a safety net.

For example, general liability insurance protects against property damage or injury claims. On the other hand, product liability insurance covers risks related to defective goods.

Here are four tips for finding affordable coverage:

  • Start with basic policies, which are often more cost-effective for new entrepreneurs

  • Compare rates from multiple insurers to find the best coverage at the lowest cost

  • Focus on coverage based on your industry and business model (e.g., dropshipping businesses might prioritize cyber liability insurance)

  • If you can afford to, work with an insurance broker to tailor coverage to your company’s specific needs

Having even minimal insurance gives you peace of mind and lets you focus on growing your business.

10. Develop a marketing strategy

A marketing strategy outlines how you’ll reach your audience, build brand awareness and generate sales. Effective small business marketing plans attract customers and help your business grow without wasting time or resources.

For example, a well-executed social media marketing campaign can turn a single post into hundreds of shares – driving traffic to your website without significant expense. Be patient, as this won’t happen overnight.

If you’re starting from scratch, these four cost-effective methods can bring awareness to your company:

  • Leverage free social media platforms (e.g., Instagram, TikTok or LinkedIn) to build your presence and engage with your audience

  • Attend industry-specific networking events to meet potential customers, collaborators or mentors who can spread the word about your business

  • Read online guides on search engine optimization (SEO) tactics like keyword research, on-page optimization and backlinks

  • Create valuable content on a blog that solves problems or entertains your audience to encourage organic traffic

If you have the budget, invest in a marketing agency, paid ads or advanced tools to build targeted campaigns.

As you attract more customers, build marketing funnels that track your customer journey stages and use the insights to improve traffic and sales.

11. Launch your business

Launching your business introduces your product or service to the market. This process allows you to test your idea, gather feedback and adapt before scaling further.

For example, one product feature might resonate more with some customers than others, so you prioritize it in your marketing content and ads.

Start with a simplified version of your product or service to gauge interest and refine it based on feedback. Testing the market identifies what works, uncovers potential challenges and minimizes unnecessary spending.

After launching, track your progress with these four methods:

Adjust your sales and marketing approaches based on these insights to spot improvement areas and boost performance.

If you have the budget or resources, plan a more robust launch with marketing campaigns, influencer partnerships or media coverage to maximize visibility. You can also start small and reinvest your profits to scale gradually.

5 challenges when starting a business with limited funds and resources

While starting a business with limited funds is challenging, it’s also an opportunity to build resourcefulness and creativity into your foundation.

Being aware of common roadblocks (and how to overcome them) can help you navigate the process more confidently.

Here are five typical challenges and solutions for entrepreneurs working with tight budgets:

Challenge

Solution

Limited funding for startup costs

Focus on bootstrapping your business with minimal resources. Start small and only invest in essentials.

Consider crowdfunding, applying for grants or seeking small business loans for additional support.

Difficulty accessing tools and technology

Use free or low-cost tools. Platforms like Google Docs, Canva and Wave offer excellent alternatives to expensive software.

You can also use free trials to test premium tools (e.g., Pipedrive) before committing to a paid plan.

Lack of professional guidance

Seek free resources and mentorship. Organizations like SCORE, SBDCs or online communities can provide free advice and mentorship.

Use forums and educational platforms like YouTube or Coursera to learn independently.

Time constraints from juggling multiple roles

Prioritize tasks that generate the most immediate value and use automation tools where possible.

For example, automate email marketing with platforms like Pipedrive and use scheduling tools like Buffer to streamline social media management.

Building brand awareness in a competitive market

Leverage organic marketing strategies like social media, content marketing and SEO.

You can also:


  • Engage in local networking

  • Collaborate with influencers or other small businesses for cross-promotion

  • Ask satisfied customers to leave reviews or refer others


By understanding and addressing these challenges, you can turn limited resources into an innovative and resilient company foundation – proving you don’t need a big budget to build a successful business.


How to start a business FAQs


Final thoughts

Anyone with the right idea and attitude can start a business. Following the above steps will cover all the bases and set you up for success.

When you’re ready to manage your company online, try Pipedrive free for 14 days to see how it can support your business’s growth.

Make selling simple with the CRM for growing businesses.

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Driving business growth