How to start a new business

By: Amanda Phagan, Edited by: Valerie Black

Published: June 17, 2025

Starting a new business can seem daunting if you've never done it before. By creating a strong business plan, understanding your state's and city's business requirements, and knowing how to measure success, you can easily bring your business idea to life.

Whether you're starting from scratch or need a refresher on the entrepreneurial process, knowing the ins and outs of building a business can help you go from dreaming to taking action.

Discover how to start your own business in our guide.

You have a business idea. Now what?

All businesses begin with an idea. After you've envisioned what you want your business to be, you need a business plan to make your dream a reality. A business plan addresses every aspect of your venture from your perspective as well as from future customer and investor perspectives.

Creating a business plan requires significant research, refinement, and consideration, but it makes starting a business much easier and increases your chances of success.

A strong business plan should consist of:

• An executive summary: Your business's elevator pitch
• A business overview: Your business's story (the same content you'd want displayed on your website's "about us" page)
• Business goals: The short- and long-term objectives you plan to meet
• A description of your operations model: An introduction to the departments or teams that will help you meet goals
• A list of your products/services: An overview of what you plan to sell and any pricing and supply chain information
• An analysis of your market/industry: Research regarding market size, estimated market value, and your ideal customer
• Your marketing and sales plan: A blueprint for recruiting customers and creating a unique brand presence
• Your financial projections: An outline of your financial goals meant to convince potential investors or lenders to invest in your business idea
• An appendix: Any supporting information or documentation relevant to your business

Once you've completed your business plan, pitch it to investors and/or lenders with the goal of securing funding. Then, apply for the licenses and permits necessary for you to do business in your state, city, and industry. Reference your state's Department of Revenue and your city's business license department to determine exact requirements.

Is now a bad time to start a business?

Several factors may impact the timing of becoming an entrepreneur. Generally, macroeconomic headwinds like high inflation, political instability, and high interest rates create a challenging environment for new businesses. However, several other factors can impact the success of your business. These include your:

• Regional economy: If you plan to fill a niche in your city, state, or region, you may be able to counter broader national or global headwinds.
• Product/service and sector: If there's enough demand for your product or service, you may see success even in an uncertain climate.
• Financial savvy: If you are skilled at budgeting, have a financial "nest egg" in place, and can clearly communicate the ROI for your business idea, you're likely to be well-positioned for success.

Tips for starting a new business

Whether you want to start a brick-and-mortar or online business, the following tips can help you set your venture up for success:

1. Solve a real problem people are facing

Offering an insightful solution to a pressing problem is the key to ensuring long-term success for your business. When brainstorming business ideas, start with a real problem people face and build a solution based on their needs. Consider talking to potential future customers to understand their pain points before refining your product or service.

2. Research your market and competitors

Before bringing your idea to market, you should identify and analyze your competitors. Note how many players are in the space, whether the market is growing or stagnating, and how you might be able to occupy a niche within it. Identify your competitors' strengths, weaknesses, and opportunities for growth. After analyzing your market and competitors, you should have a clearer idea of your business's unique value proposition.

3. Build your brand

Building a brand starts long before your business opens its doors. Branding consists of a bold logo, clever color scheme, and intuitive website — but it also requires a thoughtful social media presence, a crafty content plan, and smart advertising. Establishing a brand presence takes time, but the increased credibility and visibility that branding can bring make the effort and time well worth it.

How to find funding for your business

You may have heard people say, "You need to spend money to make money." This adage is true in almost every case. There are several ways entrepreneurs fund their businesses, and the method you choose depends on your financial situation. You can fund your business by:

• Self-funding ("bootstrapping"): Use your own personal funds to get your business off the ground.
• Obtaining a small business loan: Apply for a loan through the Small Business Administration.
• Using a business credit card: Put start-up costs on a credit card or line of credit designed for business use.
• Crowdfunding: Harness platforms like Kickstarter to recruit donors who believe in your idea.
• Securing "angel" investors: Pitch your idea to wealthy investors who can fund your startup.

Evaluating your business's success

According to the U.S. Census Bureau, 5,612,682 business applications were received between January 2024 and January 2025 — an average of 431,745 applications per month.

Per 2022 census data, 43% of businesses that closed were between one and five years old, illustrating the tendency of new businesses to fail early on.

What steps can you take to ensure your business succeeds in the long run? In addition to the general tips above, ensure you:

• Enroll in an expert-led business administration or entrepreneurship course or program
• Set performance goals and evaluate against them
• Track your profits and losses
• Know how to calculate and communicate your ROI
• Plan ahead for tax season (and employ a tax expert if needed)