Launching your tech business is a great way to gain the freedom to do what you want. However, it’s not always as easy as it seems. Being a tech entrepreneur requires a lot of effort and time.
For example, it’s common to hear about fresh tech entrepreneurs plunging headfirst without having a structured business plan in place. Some realize too late that they have prioritized the wrong steps after pouring in a lot of resources. Others struggle with keeping up with state business compliance requirements. This can lead to avoidable fines and other penalties that could potentially put their newly founded business in jeopardy.
Make sure you start your tech business on the right foot! Have a plan to stay in compliance, maximize your market entry, and follow the best process for starting your technology business. Here are five steps you can take as a new technology small business owner. We’ll also share how ZenBusiness can help you navigate the entire process.
ZenBusiness offers all the support and resources you need to start, run, and grow your tech business.Learn more about how ZenBusiness can help you.
Your Step-by-Step Tech Startup Guide
Step 1: Decide what type of tech business you want to start.
There are so many different types of tech businesses you can choose from. Some are really popular right now—like starting an IT services company, a software startup, or an online tech business. These may be some of the best tech startup ideas right now, but each has its own set of advantages and disadvantages. Consider the pros and cons of each business type as well as your skills and interests before deciding on the type of technology business you want to start.
How Do You Know If It’s the Right Tech Startup Idea?
Once you have decided on the type of business you want to establish, you will need to conduct market research. By doing this research you’re making sure that there is sufficient demand for your product or service. It allows you to re-evaluate your business niche—whether to go forward or change course.
Fortunately, the Internet has made the process easier. You can start by browsing popular online gig websites or marketplaces. This stage of the business startup process can sometimes be demanding if you’re just starting out. Since this is an important step in your tech entrepreneurship journey, it is always advisable to consult professional experts.
Step 2: Map out a business plan.
Your business plan can determine whether your tech business succeeds or fails. It should answer the questions of how, why, when, and where you want to start your business. It should have a good estimation of startup costs. Finally, it should also be realistic and convincing enough to persuade investors and clients to fund your tech business.
Having a well-defined business plan will go a long way in ensuring you have access to the funding your business will need when the time comes. Your business plan should clearly explain how you intend to run the business and why you chose certain criteria over others. It should also highlight your business strength, weakness, opportunity, and competition in the market.
This step requires trusted professional guidance as you don’t want to design this vital business blueprint based on guesswork. The fate of your business may depend on how well you craft your business plan.
Step 3: Fund your business.
Great ideas require funding to become reality. And truth be told, building a startup is not child’s play. Knowing how to get funding for a tech startup will be one of the most difficult challenges you will face.
There are several ways you can seek funding, and your approach could make or break your effort. Once you have your well-crafted business plan ready to pitch to your potential investors, you can focus on securing funding.
When you pitch an investor, you should be able to explain why you need funding. You’ll also need itemized documentation of how the funds will be spent to take care of your business needs. Doing this provides clarity and trust, which helps your prospects in deciding to invest.
Ways to Get Funding for a Tech Startup
The following are different ways you can fund your tech business:
- Business Credit Line
- Venture Capital
- Angel Investor
- Small Business Administration (SBA)
- Small Business Loan
Your approach will vary depending on the funding method you choose. You can look up online resources or consult with ZenBusiness to save time.
Step 4: Register your business.
Make your tech business official by registering with your state. Most tech startups prefer to register as a limited liability company (LLC) versus other types of business entities. This is because of the benefits and protections that come with registering a tech company as an LLC. You can find a detailed explanation of how ZenBusiness can help you form an LLC in this article.
The cost of business registration varies from state to state. However, you can expect to pay between $40 to $500 on average. Generally, you will also require a physical business address (not a P.O.box) to register your business.
When you register your business, you have to file your business under a chosen name. Your business name is a unique identifier associated with your brand. Pick a name that best reflects what your business is about. Registering your tech company can help ensure you are on the right side of the law. It can also help shield your personal assets from unforeseen circumstances.
Again, there are several online resources that can walk you through how to register your business yourself. However, seeking the help of qualified professionals will go a long way toward making the process faster and more accurate, so you can start doing business sooner.
Step 5: Open a business checking account.
Once your tech business is registered, you’ll want to secure an “employer ID number,” or EIN, from the Internal Revenue Service. Most banks won’t let you set up a business bank account without one. Having a business bank account can help you keep track of your spending. It’s also a good way for you to separate your personal assets from your business assets.
A business bank account will make it a lot easier to calculate and file your taxes, and it will give your business credibility with investors. It also reassures clients and vendors who will be transacting with your business account rather than your personal account.
Opening up a business account is a pretty straightforward process. However, if you want to maximize the benefits of opening your business bank account, consider working with a public benefit corporation (PBC) like ZenBusiness.
A PBC can give you a number of benefits since they exist to provide a public benefit and operate in a sustainable way. ZenBusiness also provides a free tool for tracking your business spending, mileage, and important tax information. ZenBusiness Money launched in 2022 and makes managing your business finances easier so you can get paid faster.
Bonus tips: Create a business website, build and grow your social media presence, and learn how to grow your business online. A website and social media account will expand your business reach, drive traffic to your business, and potentially increase your conversion rate.
Become a Tech Entrepreneur
Becoming your own boss can be rewarding in many ways. That is why seeking professional help with ZenBusiness will help make sure you are on the right track and that you get all the support you need without breaking a sweat.
So, reach out to ZenBusiness today and begin your journey of launching your own startup.
About us: Career Karma is a platform designed to help job seekers find, research, and connect with job training programs to advance their careers. Learn about the CK publication.