How to Start a Small Business

March 20, 2025 | Insurance 101

Starting a business can be both exciting and rewarding. Many entrepreneurs were drawn to their role by perks like the freedom to set their hours, choose their clients, and control their rates. In today's digital age, the possibilities for starting a business are nearly endless, whether you're offering a product, service, or unique skill.

But, like any venture, starting a small business can come with its own set of challenges. There is a lot for a first-timer to know! From securing special licenses and permits to understanding the importance of business insurance, we’ve created a high-level guide that is intended to help you start your business while simultaneously navigating some of the more complicated aspects of starting your own business.

Woman sits at desk and looks at laptop

Define your offerings and market position

What are you going to offer? This is something you’ve likely already thought about. While what you want to do is important, it's also crucial to consider what the market expects from this line of work.

Whether you plan to sell a product, offer a service, or create something entirely new, it’s vital to understand who your potential customers are and how your offerings are unique.

For instance, let’s say you’re passionate about fitness. You might want to start a personal training business. However, with dozens of personal trainers already in the market, you’ll need to find a niche. An example might be specializing in training for specific populations like seniors.

When you start with a focused offering and target audience, you can more easily streamline your operations and reduce initial costs. Although it may seem counterintuitive, starting with a limited range of services or products will help you manage your resources more effectively, setting you up for smoother growth and expansion.

Create your business plan

Business plans aren’t always the most exciting things to pull together. Yet many entrepreneurs know that a good business plan ultimately serves as a guide for your company, helping to outline your vision and stay focused on your goals.

Why is this important?

There will be competition in almost any market you’re seeking to enter. There will also be a lot of people telling you to buy this system or that system because it’ll help you hit your goals, get more customers, make millions of dollars, and other pie-in-the-sky promises.

However, when you have a business plan, it’s easier to stay on track. Knowing your “why” and being able to review things like your financial projections and marketing plan are pivotal to success.

If writing a business plan feels overwhelming, don’t worry—there are free templates online that can make it much easier. Common elements found in most business plans include:

  • Executive summary
  • Overview of the company
  • Products or services
  • Competitive analysis
  • Organization and management
  • Financial projections
  • Marketing plan

Choosing a Business Structure

New business owners can have difficulty selecting the “right” business structure*. It’s understandable—there’s a lot to know and it’s likely your first time trying to figure it out! The most important thing to remember is that the structure you choose has significant implications for taxes, liability, and even the daily operations of your business. A lawyer may be able to help guide you on the best structure for your business. Some of the more common business structures are:

  • Sole Proprietorship: Ideal for single-owner businesses, a sole proprietorship is the simplest structure. You can operate under your own name or register a DBA (Doing Business As) if you prefer a different business name. However, a downside is that you can be held personally liable for any debts or lawsuits against your business.
  • Limited Liability Company (LLC): An LLC offers more protection as it separates your personal assets from your business liabilities. This is a popular choice for small businesses with more than one owner. The profits and losses "pass-through" to the owners' personal tax returns, simplifying tax filing.
  • S Corporation (S Corp): An S Corp can offer additional tax benefits and protection but requires more paperwork and adherence to specific regulations. This structure might suit businesses planning to grow or take on investors.

Regardless of the business structure you choose, ensure you complete all necessary forms and registrations. The IRS offers a checklist for starting a business, which can be a helpful resource. Additionally, consult with a tax professional or business attorney to ensure forms are filled out and submitted correctly.

Licensing and Certification

Depending on the type of business you’re starting, you may need specific licenses or certifications before you’re able to welcome customers. Note that this isn’t always the case: Today’s “gig economy” allows for a lot of flexibility. Do your research and consult with a business attorney if you’re unsure about what may be required to ensure you comply with your state’s local rules and regulations as this article is not intended to be legal advice.

Also, remember that while you may not be required to have certification, getting them may help enhance your credibility among potential clients. If, for instance, you wanted to start a content creation business, joining a place like Hubspot Academy and taking courses geared toward content creation could prove beneficial.

Business Insurance

Consider that business insurance is a critical component of your overall business plan. Yet according to Forbes, 29% of small businesses don’t carry any small business insurance. Meanwhile, 53% of small business owners said their biggest barrier to getting company insurance is being unaware of what kind of insurance their company requires.

We get it—when first starting a business, it's easy to get swept up in the creative and operational aspects of your new venture. Business insurance can help protect you from a range of risks that could otherwise cause big trouble. Here are a few types of business insurance to consider:

  • General Liability Insurance: This is the most common business insurance. This is especially true for those who work directly with customers. General liability insurance covers your business against claims of bodily injury, property damage, and other liabilities.
  • Professional Liability Insurance: Also known as errors and omissions insurance, it’s something service-based businesses should look into. It protects you if a client claims that your services caused them financial harm.
  • Commercial Property Insurance: If you own or lease property for your business, this insurance covers your building, equipment, and inventory from damage or loss due to events like fire or theft.
  • Workers’ Compensation Insurance: If you have employees, this insurance may be required by law in your state. It covers medical expenses and lost wages for employees injured on the job.

Whether you’re starting your first business or you’re among the 90% of small business owners who aren’t confident that their companies have the coverage they need, biBerk is happy to help.

Create a marketing strategy

Once some of the more structural elements have been decided, it’s time to start getting into some of the other aspects of running a business—like marketing!

Building a strong brand is important from the get-go for small businesses. With today’s technology and tools, there is plenty you can achieve on even the most shoestring of budgets.

Establishing your online presence is key! A user-friendly website and active social media profiles are a cost-effective way to help you reach your audience and build trust.

Another great way to increase your visibility is through Search Engine Optimization (SEO). By optimizing your website for search engines, you increase visibility and attract potential customers without the need for expensive ads. Various free tools, such as keyword.io, will allow you to look up trending keywords that you can use on your website. This makes organic search a budget-friendly strategy that helps small businesses compete with larger companies and build their loyal customer base.

Final thoughts

Starting a small business is an exciting journey, but it also requires careful consideration and planning. With the right licenses, business structure, insurance, and marketing strategies, you’ll have a solid foundation from which you can grow when starting your business.

*This article is intended for information only and is not meant to give professional advice or tax recommendations. Please contact a tax expert or the IRS with questions.