
How to Start a Small Business in 2025
Starting a new business in the new year can be nerve-racking because it involves many moving parts. From deciding what venture to pursue to determining your target market and ideal location, it can be overwhelming.
Unsurprisingly, the Bureau of Labor Statistics reports that only 34.7 of businesses survived the decade between 2013 and 2023. This means significantly more businesses fail within the first few years of operation than those that succeed. However, with the right tips and guidance, you can start, manage and run a successful business and overcome these statistics.
How to Start a Small Business
The following is a checklist for starting a small business organized into actionable steps that help you avoid overthinking and analysis paralysis, which are common at the beginning of your entrepreneurship journey.
1. Figure out Your Business Concept
The first step in opening a small business is choosing the right concept that aligns with your interests, skills and passions. Translating your skills and passions into business ideas makes them more viable and sustainable. Another way to source business ideas is to identify problems or needs you can fulfill within your target market. Don't forget to balance passion for a business with potential for profitability.
The following are some questions you can ask yourself when trying to select and validate business ideas:
- What do you love, and what do you hate doing?
- Do you have any monetizable skills?
- How much time, energy and resources can you invest in a business?
- How fast do you want to scale your business?
- Do you have any prospective partners?
2. Research the Market
After choosing a business concept, conduct market research to determine whether it's feasible and who the right people to sell to are. Market research also helps you understand your competitors and how they differentiate themselves in the market you want to enter. Understanding the gaps and opportunities in the market will guide you toward the right unique selling point (USP) for your business.
Market research for a new business should cover the following:
- Primary research, which involves gathering data from potential consumers using questionnaires, interviews and surveys.
- Investigating valuable industry insights, trends and patterns to envision the possibility of success.
- Conducting a SWOT analysis that analyzes the strengths, weaknesses, opportunities and threats of your business idea.
- Running a minimum viable product (MVP) test to determine how effectively your product or service solves the intended problem.
- Performing a financial feasibility analysis to compare your initial investment costs to the operational expenses and potential revenue.

3. Create a Business Plan
A business plan is a comprehensive document that defines the steps to start a small business. It provides an overview of the business's future by outlining its goals and strategies. While there's no one-size-fits-all format for a business plan, all business plans include the following sections:
- An executive summary
- A description of the products and services
- A market analysis
- A marketing and advertising strategy
- Financial plans and projections
Business plans legitimize business ideas to attract investors and partners or assist with obtaining external funding from financial institutions. They also guide the company's strategic growth by ensuring the management and executive teams remain aligned with the business goals.
4. Choose the Business Structure
Business structure refers to the company's legal or corporate structure that defines your day-to-day operations, personal liability and income taxes. The right business structure should accommodate your business as it grows and help you achieve your projected bottom line.
Your attorney or business accountant can advise you on the best structure for your new enterprise. However, it helps to understand the main types of business structures:
- Sole proprietorship: They are the easiest type of business to form where the business owner assumes liability for the company. It requires minimal paperwork to start and allows you full control, but you will be personally responsible for the business's debts if it fails.
- Limited liability company (LLC): These are run or managed by one or more people known as members who enjoy benefits similar to those partnerships and corporations. While LLCs offer liability protection for the members, they have limited life in many states.
- Limited liability partnership (LLP): This is a popular type of partnership for licensed professionals like law firms or health care centers. One or all partners have limited liability for the company's debts and actions. However, all partners must participate actively in the business.
- Corporation: This business structure comprises unlimited shareholders with limited liability for the owners. Corporations are often double-taxed because profit is taxed when earned and later when distributed to shareholders, but it may be subject to special deductions.
5. Register the Business and Obtain All Necessary Licenses
The first step in registering a business is selecting a unique business name that is not already taken by another registered company or infringes on a registered trademark or service mark. Verify business name availability by searching your state's online database or contacting your state's filing office and the U.S. Patent and Trademark Office (USPTO) for trademarking.
Choose a business name that reflects your brand and values while being easy to recognize and remember. Purchase the same or a recognizable version of the name for a domain name. Registering a business with local authorities is not mandatory in most regions but is necessary for certain business structures. However, you're often required to register the business in the state where it's formed and others you plan to operate in.
A company's industry and location dictate licenses, permits and insurance policies. Ensure you understand what you need so your business is legally compliant.
6. Fund Your Business
Your business plan explains how much money you need to start, manage and grow your business. With these figures, you can start finding ways of raising money either through personal savings or borrowing capital. The best method for funding your business depends on your business structure, size and initial set up costs.
Some funding methods for small businesses to consider include:
- Bootstrapping: This method uses personal funds to gain complete control of your business but has the highest personal financial risk.
- Small business loans: These include small personal loans from banks and credit unions that allow you full ownership of your business.
- Venture capitalism: This method involves convincing angel investors to fund your business in exchange for a stake in your company or membership on your board.
7. Find the Right Tools for Running Your Business
Business tools are necessary to streamline your processes and boost productivity and efficiency. The primary business tools to consider for a startup help automate or eliminate repetitive daily tasks. These include:
- Communication tools
- Accounting software
- Social media management tools
- Project management tools
- Analytics software
8. Market Your Business
Once you launch your new business, you must inform prospective customers about your products and services. A well-informed marketing and advertising strategy also helps grow your business efficiently and maximize profitability. So, here are some tips to start marketing your new business:
- Build a website: Establish your business online by building a standard informational or e-commerce website to showcase your offerings and provide information about your website.
- Optimize the website for search engines: Implementing search engine optimization (SEO) techniques helps your website rank highly on search engines, boosting your visibility and driving more traffic.
- Establish a social media presence: Open business profiles for your company on the platforms most relevant to your industry, and create a strategy to keep your audience engaged.

Contact Business Consumer Alliance (BCA) for Ongoing Business Support
If starting a new business is at the top of your list for the year, you need all the support you can get. BCA is a nonprofit organization focused on helping businesses in the long term. We offer ongoing support in many ways, including legal advice, arbitration, invoice collection, marketing and advertising.
If you're looking for experts to support you throughout your business journey, sign up for our business membership. The membership gives you access to unique benefits that contribute to the success of your entrepreneurial start-ups and small businesses.