Do you dream of entrepreneurship? If so, you’re not alone. Census data shows that more than five million Americans launch new companies each and every year, with the rate of entrepreneurship steadily increasing. Of course, some of those businesses fare better than others. There’s no great secret to ensuring your startup succeeds; it’s really a matter of having intentionality, strategy, and grit.

If there’s no special blueprint or recipe for startup success, there are a few best practices that we can recommend across the board. In this post, we’ll offer a quick startup primer.

Covering the Basics

First things first: Before you launch a startup, you’ll need to have a business idea with some real legs to it. That requires you to identify a problem, then come up with an idea for solving it. Above and beyond that, you’ll also need to validate the idea. Here’s what that means:

• Spend some time defining the target audience for your product or service. Create buyer personas to help you summarize the values, goals, and pain points that motivate these customers.
• Do some market research to get a better sense of the competitive landscape. How much demand is there in your field, and who are the main competitors? Can you identify a clear way for your business to stand out?
• Use focus groups, surveys, polls, and online research to validate your idea, determining whether it genuinely has any appeal for your target demographic.

These foundational steps are important for ensuring your business has real potential for lasting impact and success.

Choosing Your Business Structure

Next, you’ll need to get into some of the legalities of business ownership. Specifically, you’ll need to determine which business structure is right for you.

Four Options for Structuring Your Startup

Here are some of the primary options to consider:

• The default position is sole proprietorship, which means you own and operate the business all on your own. You get to make all the decisions and keep all the profits, but there are no personal liability protections in place… which could be disastrous if you’re hit with litigation.
• A partnership works in much the same way, but provides you with an option to split duties and profits with a business partner.
• A corporation provides liability protections and also allows you to issue shares, which can be great for courting outside investors. But the regulatory burdens are intense, and make this non-viable for entrepreneurs looking to keep things relatively nimble.
• The Limited Liability Company, or LLC, provides the best of both worlds: It offers personal liability protections with minimal administrative or regulatory burdens. For many startups, this is the ideal option.

Quick Tips for LLC Formation

The specifics for registering an LLC can vary depending on which state you’re in, but the process usually looks something like this:

• Choose a name for your LLC, which must be unique. You can’t pick a name being used by another LLC in the same state.
• Appoint a Registered Agent to receive tax and legal correspondence. For example, consider enlisting a service like Northwest Registered Agent.
• File Articles of Organization with your state, and pay whatever the nominal registration fee is. Depending on the state, this could be anywhere from $20 to $300.

These basic steps should get your LLC up and running within a couple of weeks.

Handling Other Legal and Tax Documents

In addition to registering your LLC, there are a few other assets and documents that might position your startup for success. Here are a few primary examples.

A Business Plan

Your business plan provides a basic summary of your business, a list of goals and objectives, a list of products and services, and a rundown of the sales and marketing channels you’ll use. It might also provide some financial forecasts.

This document is not legally mandatory, but it can help give you a sense of direction. And, it can be essential for earning the trust of potential lenders or investors.

An Operating Agreement

Your Operating Agreement serves as a charter for your business, outlining how you and your business partners will allocate duties, responsibilities, profits, and liabilities. Note: Even if you’re currently working solo, an Operating Agreement can be wise if you ever plan on bringing a partner on board. It can help prevent legal friction down the road.

An Employer Identification Number

You’ll need an EIN before you can administer payroll or fill out your business taxes. If you’re a US resident, you can apply for a free EIN from the IRS.

Securing Funding

A final point to consider: Sooner or later, your startup will likely need an infusion of capital. There are a few different avenues for pursuing funding, and the route you choose will depend on the legal structure you choose for your company.

• One option is to self-fund your business, which can mean dipping into your nest egg or asking friends and family for assistance. Naturally, this only works if you or the people in your life have money!
• Another route is to secure a loan or a line of credit. You’ll need to have some professional credibility here, which registering as an LLC can help you to achieve.
• Finally, you can bring in third-party investors. This is most viable for Corporations, which can issue shares to shareholders in exchange for their investment.

Keep these funding options in mind as you look ahead to your growing business.

Establish Success with Your Startup

Many people dream of business ownership. To turn your dream into a reality, you’ll need to consider a number of legal, financial, and strategic imperatives. Hopefully, this guide will set you down the right direction, showing you the basic steps you need to take to position your startup for lasting success.

About the Author

Amanda E. Clark  is a contributing writer to LLC University. She has appeared as a subject matter expert on panels about content and social media marketing, and also speaks regularly on topics related to small business ownership.