How to Start a Business from Scratch: A Beginner's Roadmap

Starting a business is an exciting journey filled with questions and decisions. After working with thousands of business owners as a counselor, coach, and educator, and launching a few businesses myself, I’ve seen what works and what doesn’t. This year, as I celebrate the one-year anniversary of Flourish In Growth and our first product, The Guided Small Business Planner, I’m sharing the insights that have helped others take their first steps.

If you’re wondering how to start a business from scratch, you’re in the right place. This guide goes beyond a generic business startup checklist. While those can be helpful, they often miss critical elements that lay the foundation for a thriving business. My approach simplifies the process and explains the why behind each step, helping you build a business that lasts.

Start with a Strong Foundation

You’re likely wondering what steps to take and in what order to complete them to start a business from scratch. Like any new project, starting a business takes time and a willingness to learn. Many new entrepreneurs expect to jump from registering their business to earning thousands of dollars quickly, but that’s like buying running shoes and expecting to run a marathon a month later. It’s a recipe for burnout and failure.

Instead, break the process into smaller, more manageable steps. These steps will help simplify the process and ensure you understand the reasoning behind each action. Let’s dive into the roadmap for how to start a business from scratch.

Step 1: Map Out Your Business Model

The first thing that I tell people to do when they’re figuring out how to start a business from scratch is to map out their business model. Think of it as your business blueprint, similar to the way that a blueprint for a house shows the doors, windows, overall size, and room function. Your business model is the exact same, in that it outlines the primary functions of your business.  It doesn’t need to be overly complex and your business model is not the place for all of the nitty-gritty details.

Your business model should answer these key questions:

• What do you do or sell?
• Who are your customers?
• Who are your vendors or suppliers?
• When, where, and how do you sell?
• Why is this business meaningful to you?

Mapping out these details will provide you with clarity and direction, allowing you to make informed decisions as you move forward. Need help? My free checklist includes a business model template to guide you!

Download StartUp Checklist 

Step 2: Identify and Understand Your Customers

Once you’ve mapped out your business model, you’ll have a clearer understanding of how you will generate revenue. This will help you with step two: identifying and understanding your customers. 

We call this, ‘customer discovery’ in the entrepreneurial space. Getting to know your customers is crucial as you learn how to start a business from scratch. Identifying their problems, motivations, and challenges—particularly in connection to how they make purchasing decisions—will guide your marketing and sales strategies, saving time and money by eliminating guesswork about what will resonate with them.

Understand Their Problem and Motivation

Every business solves a problem or fulfills a need. Your ability to clearly define that problem will help you connect with your customers. For example, if you sell food, you are selling a relief to hunger or a craving. If you sell a service, you may be selling convenience or perhaps expertise. 

Examples of problems or motivations: 

• Almost 40% of American parents spend over five hours a week chauffeuring their children. This takes time away from the ability to exercise and care for themselves leading to lower levels of fitness and energy. 
• Homeowners spend an average of $500 and 70 hours annually on lawn maintenance, often to sustain landscapes that do not support healthy ecosystems, native wildlife, or pollinators. Fertilizers and monoculture grass contribute to water and air pollution while diminishing habitats for native species. More suburban homeowners are looking for options that cost less and are healthier for the environment. 

It is important to note that you want to focus on identifying the problem before pitching a solution. This keeps the conversation centered on the customer’s needs.

Talk to Real People

Once you have defined the problem, you will want to talk to people who have experienced it. Aim for 10-15 conversations with potential customers, not family or friends, as they may not provide the same type of feedback that you would get from someone who is motivated to purchase what you are selling. During your conversation, stay focused on the problem that your customers face and understand the impacts on them, rather than trying to sell them the product or service that you are going to sell.

Not sure what to ask or does this process feel daunting? I provide specific examples and a questions library in the Customers chapter of The Guided Small Business Planner. I frame customer discovery like journalism. If you’ve ever read a Pulitzer Prize-winning article, you know the lengths that a great journalist uses to uncover a story and tell it in an engaging way. 

Create a Customer Persona

After your interviews and gathering insights, develop a customer persona. This is a detailed description of your ideal customer that you will use as a reference when creating marketing material. A strong customer persona is one that reads the same way you would describe someone very close to you, in that it should be easy to conjure an image of them doing something they love. A strong persona reads like a profile of someone you know well, making it easier to create relatable content and offerings.

Note: In my experience, many people skip mapping out their business and learning who their customers are. Instead, they jump right into choosing a name and registering their business. If you’ve already done that, it’s okay! You can still map out your business model and focus on understanding your customers before you do anything else. 

Step 3: Define Success on Your Terms

The next step in figuring out how to start a business from scratch is to spend a little time on you! I know that you are likely thinking, this is NOT what I’m here to learn. The underlying reason for spending a little time on you before you do the technical steps that feel more like starting a business is because you are the owner and leader of your business. 

Every decision you make can and will impact your business. When you spend time upfront deciding what you want and defining what success looks like to you, you’ll be able to better respond to stress or uncertainty when you are faced with challenges. 

So, take some time to think about what you want out of your business. How do you define success? Is it the ability to take multiple trips per year? Is it to replace your full-time income? Is it to have a flexible schedule? People define success differently. The more specific you can be about what success looks like for you, the better you will be able to make decisions that align with your business goals. 

Note: As a mom of young children, business owner, partner, and active community member, my definition of success may be different from your version. Everyone’s definition is likely going to be different! 

The Power of Laying the Right Foundation

Half of all new businesses fail within their first five years. I believe one key reason is that many business owners skip crucial steps: mapping out their business model, deeply understanding their customers, and clearly defining what success means for them. These steps may seem simple, but they’re not always easy—and they make all the difference in creating a strong business foundation.

After working with countless business owners, I’ve seen a clear pattern: those who invest the effort upfront set themselves apart. By putting in the work early, they gain better information, which becomes one of the most powerful tools for building a sustainable, successful business.

Step 4: Understand Your Industry

Once you’ve gained insight into your customer’s motivations, it’s time to dive into your industry. Stay ahead by exploring trends and innovations shaping the landscape. The rapid growth of AI and technology is a prime example. These forces continue to disrupt and redefine industries, making it essential to understand how they impact your business.

Beyond technology, keep an eye on other influential factors, such as political developments, policies that affect industry investments, cultural trends, seasons, holidays, and major events. A broad understanding of these elements equips you to make informed decisions.

Building Connections and Conducting Research

A great way to deepen your industry knowledge is by joining trade or industry associations. These organizations can provide valuable insights and keep you in the loop on changes and opportunities. Additionally, building relationships with major players or decision-makers in your field can expand your network and open doors.

For a more structured approach, use the Competitors Chapter of The Guided Small Business Planner. This resource will guide you through researching competitors, identifying key trends, and even calculating your market share. With these tools, you’ll gain a clearer understanding of your potential revenue and how your business fits into the larger industry landscape.

Step 5: Choose a Business Name

Now comes the fun part…naming your business! Before you choose a business name, you’ll want to vet it. You will want to make sure that it’s available as a URL, on social media platforms, and that it makes sense to your customers. You also want to make sure that it does not have any hidden meanings that may confuse your customers. Lastly, you will want to check to ensure that it’s available through your Secretary of State. Trademarking your name is an optional step for added protection.  You can learn more about that here. 

Step 6: Register Your Business

Registering your business is a critical step in establishing its legitimacy and protecting it legally. You have two options: seek the guidance of a small business lawyer or take the DIY route. A lawyer can help ensure you have adequate legal protections, while the DIY option requires thorough research and preparation.

If you choose the DIY approach, consider attending a free business seminar led by a lawyer. These sessions often highlight the most common legal challenges business owners face and can help you avoid costly mistakes. Some frequent legal missteps startups make include improper business registration, overlooking necessary permits, and failing to protect intellectual property.

Protect Yourself from Predatory Practices

When you register your business, be aware of predatory practices that target new owners. Scams often come in the form of official-looking mailings, soliciting payments for services you can obtain for free or at a low cost. For example, labor law posters, frequently advertised as costly necessities, are often available for free or at minimal expense through your state agency.

Additionally, many new business owners opt to form a sole proprietorship or LLC. Both are treated similarly for tax purposes: you’ll pay income tax on your business's net income. Understanding your options and staying vigilant against scams will help you navigate this process smoothly and set your business up for success.

Step 7: Obtain Licenses and Permits

The licenses or permits you’ll need to start your business depend heavily on your industry. For example, opening a storefront or restaurant typically requires permits for occupancy, operations, food preparation, alcohol sales, and more. Similarly, if your occupation mandates professional licensing, like plumbing in North Carolina, you’ll need to comply with state board requirements for education, licensing, and legal codes.

Take the time to research and follow the regulations specific to your industry. Overlooking even a single requirement can lead to costly delays or legal issues down the line. 

Where to Find Guidance on Licensing and Permits

Each state has organizations that can guide you on the permits and licenses needed to operate in your county and municipality. Your local county or town offices should also be able to answer permitting questions. Additionally, review any rules or restrictions within your neighborhood that could affect your business.

If you’re unsure where to begin, contact your town’s economic development office, Small Business Center, SBDC, or Chamber of Commerce. You can also visit SBA.gov for comprehensive licensing resources. For businesses in highly regulated industries, it’s critical not to rush this process. I’ve worked with several business owners who thought they understood the steps, only to face significant delays when they couldn’t secure the necessary permits or licenses. Taking the time to do it right ensures a smoother path to opening your business.

Want an easy way to track your progress? Here’s my full printable checklist for starting your business.

Step 8: Open a Business Bank Account

Once your business is registered, the next step is to get your free EIN (Employer Identification Number) from IRS.gov. This essential step should be completed before opening your business banking account.

As soon as you start spending money to establish your business, you’ll want to open a dedicated business bank account. Many banks offer free business accounts, but not all accounts are created equal. Here are a few key factors to consider when choosing the right one for your needs:

• Is the bank’s mobile app user-friendly and efficient for managing your account on the go?
• Can you easily direct deposit or transfer funds without hassle?
• Does the account have restrictions that could complicate payments? For instance, some basic accounts limit debit transactions to $1,000 per day.
• If you anticipate needing a business loan, is there a local branch with a dedicated business account representative you feel comfortable working with?

Taking the time to evaluate these factors will ensure your business banking account supports your financial goals and operational needs.

Step 9: Build the Essentials

With your business registered and plans in place, it’s time to focus on the foundational elements that bring your business to life. Start by creating a logo that visually represents your brand and setting up a website to showcase your offerings and connect with customers. A professional email account is essential for building credibility and communicating effectively with clients. At the same time, ensure your product or service is fully prepared to go live and generate sales. Don’t forget to secure the necessary insurance to protect your business and its assets.

The specifics of these steps will depend on your business type and are covered in detail in The Guided Small Business Planner. For a structured approach, download the free business start checklist or invest in The Guided Small Business Planner to guide you through the process of starting your business with confidence.

Your Path to Success

Learning how to start a business from scratch is a journey that demands patience, strategy, and dedication. While the process can feel overwhelming at times, approaching it with the right tools and mindset makes all the difference. With thoughtful planning and persistence, you can create a business that doesn’t just survive but truly thrives.