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How To Start a Business in 11 Steps (2023)

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Being your own boss starts with the decision to make the big leap. 

If you’ve found us here, you’ve already taken that crucial first step. Congratulations! Now you’re ready to learn how to start a business from scratch. But where do you begin? 

Whether you already have a brilliant product idea or you’re just looking to build a future on your own terms, you’re in the right place. This guide will walk you through starting a business from pre-launch marketing to first sale.

Browse hundreds of business ideas. Explore helpful tools to manage your day to day when opening an online store. And bookmark this guide as a reference to return to as you build. 

Let’s get started. 

Ideate and validate

1. Discover your big idea

It all begins with an idea. To narrow in on that idea, it’s important to know what kind of business and lifestyle you want to have. Are you looking to sell existing products as a low-lift side gig? Do you want to go all in on an invention that will change the world? Or is your social media audience the perfect place to launch your personal brand’s merch?

If you’re stuck, start with our big lists of low investment business ideas, online business ideas, and popular business opportunities to get inspired. Next you’ll decide how to bring that new business idea to life: make, manufacture, or resell?

Developing your own product

You may decide to make a product with your own hands or develop one in partnership with a manufacturer, print-on-demand company, or private label partner. 

🦘Want to sell something that’s ready to go? Jump to: Selling an existing product

Products to make or manufacture

Mine these lists of unique business ideas to discover items you can make or manufacture from scratch.

🍝 Success Story: This 84-Year Old Grandma Taught Cooking Skills to the Masses

Nonna Nerina launched her virtual cooking experience when the pandemic all but ended tourism in her Italian village. Her granddaughter shares how Nonna runs a successful business selling a service online. 👉 Read Nonna's story

Print-on-demand ideas

Print on demand is the process of working with a company to turn your designs into merchandise like t-shirts, jewelry, or mugs and shipping them directly to your customers. This is a quick and low investment way to start a business. Research print-on-demand companies to find the right fit for your business idea.

Private label (or white label) ideas

If you have a solid idea and no experience with manufacturing, private label or white label models allow you to work with an experienced manufacturer. They can customize generic products to your brand and specifications. There are a number of private label and white label product ideas to consider, from fitness equipment to cosmetics.

Selling an existing product

If you’re looking to get up and running quickly, selling an existing product is a great option. You can decide to dropship or curate and resell products from other brands. 

Product ideas to dropship

Dropshipping is a business model that involves selling existing products on your own online store without handling inventory or shipping. An order from your customer will be fulfilled and shipped by the vendor or manufacturer, skipping you as a middleman. You can get started with dropshipping by finding a product and dropshipping partner.

💡 Tip: You can also dropship white label products, giving you the benefits of both a branded product and a low-lift business model.

Curation or resale ideas

Another way to start a business without your own products is through curation or resale. Some lifestyle and fashion brands will curate collections from a number of vendors or designers, buying inventory upfront. In this case, you will be responsible for inventory management and shipping. To find brands to work with, browse wholesale marketplaces. Resale business models are popular with antiques, collectibles, or vintage clothing

Starting a side business

What if you just want to dip a toe into entrepreneurship? Starting a side hustle—that is, running your own business alongside your full-time job—is a low-risk way to test the waters and make supplementary income. Don’t quit your day job. Instead, browse our lists of passive income ideas and businesses that let you make money from home.

Monetizing your social media following

Building an audience can be one of the most challenging parts of starting a business. If you have already grown your fan base on social media channels, the hard part is already done! Online tools make it easier than ever to monetize that audience. Drill down to your platform of choice for creator-friendly business ideas. 

🌵 Success Story: TikTok’s Plant Mom Spun Online Virality Into a Brand

Get inspired by Sonja Detrinidad, a mortgage professional turned succulent influencer who monetized her audience to start her business, Partly Sunny Projects. She buys wholesale plants in her native California and ships across the US. 👉 Read Sonja’s story

💡 Tip: The Shopify Starter Plan is perfect for creators who want to get selling fast without building a website. Or, you can also use a tool like Linkpop to superpower your social bio and push fans to your store.

Superpowered social links

Linkpop is a tool that lets you create a customized landing page for all your brand links. It’s free, customizable, and best of all: shoppable.

Graphic showing two mobile phones open to a Linkpop shopping feature

Get Linkpop

Starting in a specific industry

If you’ve already honed in on a product of interest, it’s important to understand the nuances of that industry. If yours is below, click through to the corresponding guide to get tailored advice for how to start a business in your market of choice.

👗 Clothing: How to Start a Clothing Line
👕 T-shirts: How to Start a Successful T-Shirt Business Online 
💍 Jewelry: Start a Jewelry Business: Step-by-Step Guide
🕯️ Candles: How to Start a Candle Business (with Examples)
🥝 Food and Drink: How to Sell Food Online (Step-by-Step Business Guide)
🙂 Stickers: How to Make and Sell Stickers Online
🛋️ Home: Sell Furniture and Home Décor Online: The Ultimate Guide
🌱 Plants: Fronds with Benefits: A Beginner’s Guide to Selling Plants Online
🎨 Art: How to Sell Art Online: A Complete Guide
📚 Books: Sell Books Online: Page-Turning Advice From the Pros
🐶 Pets: How to Start a Pet Business
🧴 Skin care: Start a Skin Care Line: Lessons From a Serial Beauty Entrepreneur

🦘 Ensure that you understand any legal constraints or requirements specific to your industry before going all in. Jump to: Operations

💄 Success Story: She Quit Her Wall Street “Dream Job” to Manufacture Lipstick 

Melissa Butler started The Lip Bar by whipping up color formulations in her kitchen. The specific requirements of the cosmetics industry prompted her to work with a skilled manufacturer as the brand grew. 👉 Read Melissa’s story

🦘 Jump back to: Table of contents

2. Research your product and audience

Now that you have a killer idea, it’s time to validate it! Your product or business idea may excite you, but it’s only worth pursuing if there’s an audience (a.k.a. future customers) looking for it.

There are many ways to do your research upfront before you start investing. You can look for gaps in the market, find an underserved audience, run a focus group, and investigate your competition. 

Finding a target audience

Your target audience or target market refers to a group of potential customers for your brand. This is the group you’ll eventually aim all your marketing efforts and dollars toward. As a result, it’s critical to define them as thoroughly as possible.

Identifying and getting to know your target audience is important because:

✅ It helps you make smart and cost-effective marketing decisions
✅ It influences your product development (because you have a direct line of feedback)
✅ It can increase revenue (by focusing your efforts on the most promising customers)

Building buyer personas is an effective method for drilling down into your ideal customers’ needs. How old are they? What do they love? On which social media platforms do they spend most of their time? What’s important to them?

👩🏾‍🦱 Success Story: An Art Major Developed a Product to Fill a Market Gap

Yelitsa Jean-Charles was dissatisfied by the options for dolls with Black hair. So she designed her own. She built her successful business, Healthy Roots Dolls, to teach a generation to love their curls. 👉 Read Yelitsa’s story

Conducting market research

Market research is the process of gathering data about the potential customers (or “market”) for your brand. It can validate that you’re on the right track or inform you that you need to make a shift. You can conduct market research through surveys, focus groups, and interviews. 

Market analysis is a similar concept but involves researching the industry as a whole, combining insights you get directly from your target audience with third-party sources like reports and industry publications.

🎧 PODCAST: Compound Studios Builds Brands For Unique Target Markets 

Shane Vitaly says he ignores competition when conducting market research. For his multiple distinct brands, emerging trends are the key to defining the audience for each. 👉 Listen

Analyzing the competition

Understanding the competitive landscape can ensure that you’re setting your brand apart in the industry. This exercise will also help you clearly define your unique selling proposition (USP), which is the benefit that your product offers over that of your competitors. Explore the in-depth resources below to get started.

👩🏻‍🎓 FREE COURSE: Building a Business for a Niche Market

In this 12-part course, host Vivian Kaye walks through the steps to launching a niche business, including how to define and target a niche audience for your brand.

Portrait of host Vivian Kaye next to a title reading "4 steps to niching your business"

Register now

🦘 Jump back to: Table of contents

3. Calculate your startup costs

Once you’ve validated that there’s an audience hungry for your product and you’ve nailed your value prop, it’s time to talk money. Your business will be viable if you have the funding to get it off the ground and you can identify a price that’ll turn a profit.

Writing a business plan

A business plan is a document you can use to help you secure funding from a bank or venture capital (VC) firm. But even if you’re not seeking outside funding, a business plan forces you to answer important questions about how you will run your business. It includes everything from your mission statement to your financials. 

💡 7 business plan writing tips:

  1. Know your audience. 
  2. Have a clear goal.
  3. Invest time in research.
  4. Keep it short and to the point. 
  5. Keep the tone, style, and voice consistent. 
  6. Use business plan software.
  7. Check out other business plan examples, like the ones here, to inspire your own.

Calculating startup costs

What does it really cost to start a business? It depends on many factors, such as whether or not you carry inventory or you need to lease space. Much of the money spent in the first year consists of reinvesting profits back into the business, not spending out of pocket. This is called “bootstrapping” and you can learn more about it later in this section. 

Accounting for all business costs

Your startup costs in the first year will help you cover everything from setting up a website to buying inventory to running your first paid ads. Here’s what business owners reported as the breakdown of their spending in the first year:

Data visualization depicting 7 categories where entrepreneurs spend the most money in their first year of business

🚨 Tip: Don’t forget to consider unexpected costs like business insurance, taxes, legal fees, and shipping costs. 

Conducting a break-even analysis

A break-even analysis is the process of determining at what point your business (or product) becomes profitable. It’s a financial calculation used to determine the number of products you need to sell to cover your production costs.

There are several benefits to conducting a break-even analysis:

✅ It helps you make smart decisions about product pricing.
✅ It can mitigate risk and eliminate surprise.
✅ It sets informed targets for your business.
✅ It can identify any missing expenses. 

Determining profit margins

A profit margin is the measure of a business’ profitability expressed as a percentage. Your profit margin will depend on the industry you’re in, the retail price ranges set by the market, and your costs. You may have a lower profit margin if you’re selling a high volume of goods (say, selling digital art prints) or a high profit margin if you sell luxury products.

💵 FREE TOOL: Profit Margin Calculator 

Determine selling prices for your products by entering your costs and markup. This handy tool will instantly calculate your retail price, profit amount, and profit margin. 

Try it

Pricing your products

Knowing how to price your products can be tricky, but with a few basic calculations, you can confidently set prices that make sense. In a nutshell, there are three steps to setting prices:

  1. Add up your variable costs, or the costs that change depending on the amount of product you produce.
  2. Add a profit margin.
  3. Don’t forget about fixed costs, or the consistent costs to do business that aren’t affected by how much you produce (think office space lease or utilities).

As you’re setting your prices, consider common pricing strategies like competitive pricing, value-based pricing, or keystone pricing. Note: Each strategy has its pros and cons and not all will be right for your unique business. 

Bootstrapping your business

Bootstrapping is the process of starting a business with little or no money and investing the profits back into the business as it grows. This method of funding a business may mean slower growth, but it also minimizes risk and debt. 

💰 Success Story: How These Founders Turned $900 into an 8-Figure Brand

Skin care brand Bushbalm launched with a mere $900 investment from its three founders. They then funded their massive growth through crowdfunding and pitching investors. 👉 Find out how

Some businesses are easier to bootstrap than others. Low investment ideas like dropshipping or print on demand require no inventory and are great candidates for this method. Other small business owners use personal savings to cover startup costs before bootstrapping growth. It’s still important to have a solid business plan in case you decide to seek additional funding later.

🦘 Looking to grow more quickly? Jump to: Getting funded 2.0

Get access to the funds you need to grow

Skip the lengthy paper applications and get quick access to funding to help your business thrive. Access Shopify Capital from your dashboard in a few clicks.

Graphic reading "Simplified, fast funding. Shopify capital"

Get funded

🦘 Jump back to: Table of contents

Build your business

4. Source products

By now, you’ve validated your product idea, your business plan is locked, and you’re ready to bring it to life. It’s time to get creative. In this section we’ll take you through the options to make, manufacture, or source your product as you get ready to start a business.

Making or manufacturing a product

If your product is a handmade item, you can get up and running by setting up an appropriate space in your home, a rented studio or office, or a co-op. Be sure to check the legal requirements for setting up a home-based business, especially if you’re selling food or cosmetic items. There are generally rules around ventilation and other safety protocols.

🏭 Success Story: Making the Leap to Manufacturing

In this guide to starting a skin care line, Meghan Cox discusses the early days of starting her business, Amalie. While she launched on handmade formulations, she eventually made the move to manufacturing—and then opened her own lab. 👉 Read Meghan'’s story

🦘 Ensure that you understand any legal requirements for setting up a home-based business. Jump to: Operations

If your product is designed to be produced in a third-party facility, you’ll likely need to source a manufacturing partner. A good manufacturer is one who understands your industry, knows packaging and labeling laws specific to your product or market, and can be a true partner in your business. 

Some manufacturers will be part of the product development process, advising you on best practices to get to your finished product. 

👩🏻‍🎓 FREE COURSE: Building a Business for a Niche Market

In less than an hour, Jason Wong walks new business owners through the process of developing and manufacturing a product from finding a credible partner to managing shipping and logistics. 

 

Portrait of host Jason Wong next to a title that reads "How to manufacture your product"
Register now

Finding a supplier 

If you’ve opted to sell existing products, you’ll need to research suppliers or other brands that you can source them from. Find the business model that applies to you below and click through for a deep dive on how to find products for each, along with some examples:

🧾 FREE TOOL: Purchase Order Template 

In 4 simple steps, complete your company and order information to automatically generate a professional purchase order that you can download and print.

Try it

🦘 Jump back to: Table of contents

5. Figure out your shipping strategy

Shipping is often cited by small business owners as one of the most challenging aspects of getting started. Luckily, the tools aimed at simplifying this task keep getting better. Ecommerce platforms like Shopify consolidate rates to help you make informed shipping decisions. And app integrations can solve specific shipping issues or help you more easily manage inventory.

Setting up shipping and fulfillment

When deciding on a shipping strategy for your business, you’ll first need to decide how you will handle order fulfillment. For many new business owners, that means personally packaging and shipping orders one by one. Unless you choose a dropshipping or print-on-demand model, managing your own fulfillment in the early days helps you better understand all aspects of your business. 

As you grow, you may decide to outsource shipping and fulfillment to a third-party logistics (3PL) company. Research different fulfillment services to see which is right for your growing business.

Shipping cost is often a factor in a customer’s decision to buy from your business. You can decide to offer free shipping and build that cost into retail prices or, if you’re passing on the cost, take steps to keep those costs as low as possible. 

Ways to reduce shipping costs include:

✅ Reducing weight of packages (by, say, using poly mailers instead of cardboard, if applicable)
✅ Choosing the right-sized packaging for the product
✅ Using flat-rate shipping when possible
✅ Using Shopify Shipping to cut carrier costs
✅ Knowing when rates change so you can adjust accordingly
✅ Offering local delivery or pickup as an alternative for in-town customers

💡 Tip: Take advantage of free tools and templates to create a shipping policy, generate shipping labels, and complete a bill of lading form.

🍕 Success Story: How Pizza Pilgrims Pivoted to Sending Pies by Mail 

In this episode of Shopify Masters, founders Thom and James Elliot explain how they pivoted during the pandemic. Through trial and error (and “exploding dough”), the two developed a shipping strategy to suit their new pizza kit offerings. 👉 Read their story

Understanding international shipping

If you plan to ship internationally, keep in mind that there are a few more steps involved. First, be sure that your products are legal in their country of destination, that you adhere to labeling and packaging requirements in those places, and that you know how to complete customs paperwork. 

Duties and taxes are often the responsibility of the customer upon the arrival of the package. You can elect to make those fees transparent at checkout by collecting them upfront.

Managing inventory

If you’re working with a fulfillment service, or using a dropshipping or print-on-demand model, inventory management is usually handled entirely by this partner. Otherwise, keeping inventory organized ensures that you can make informed decisions about production and stock reorders—and avoid customer disappointment.

Here are a few top-rated inventory apps in the Shopify App Store. These apps integrate with your ecommerce store to automate tasks and send low-stock notifications.

👀 Forecasting: CartBite
⏩ Optimization: Realtime Stock Sync & Bundling
✉️ Tracking: Notify Me! Back in Stock Alert
🤝 Syncing: Stock Sync
🚰 Replenishment: SUPLIFUL
🔔 Stock alerts: Back in Stock - Out of Stock

Find your community

Access a network of over 900,000 business owners through Shopify Community. Make connections, share learnings, and engage in meaningful conversations.

Two people stand outside exchanging business cards

Join

🦘 Jump back to: Table of contents

6. Develop a brand strategy and brand identity

Aside from a unique product or exemplary service, your brand is the driving force behind a customer’s decision to buy from you. Your brand is more than a business name or a logo. It is a guiding set of principles and design specifications that tell your story, create consistency, and build trust. A branding exercise will create the foundation upon which you make creative decisions for your brand as you grow.

As you build your brand, be sure to consider all its components:

✅ The basics (who you are and what you sell)
✅ What you stand for (mission statement, brand values, and brand promise)
✅ Your unique selling proposition (why customers should choose you over the competition)
✅ Your brand story (sometimes one and the same with your personal story)
✅ Brand voice (the tone and language used consistently in brand communication)
✅ Your visual brand identity (logo, style guide, and brand name)

To develop your brand strategy, answer questions like: How do you want customers to feel when they interact with your brand? What’s important to you (such as giving back, excellent customer service, fair wages for staff)? What colors and design styles appeal to you and represent the mood you’re trying to achieve? The answers to these will help inform the rest of the branding exercise.

Next, brainstorm business names and domain names. It’s important that you research any potential business name to see if it is already used (and therefore could cause confusion or legal issues) and if the social handles and domain are available. Once you’ve landed on a name, secure it by setting up social profiles and registering the domain

💡 Tip: If you’re stuck coming up with a name to represent your brand, try these free business name generator and domain name generator tools.

🎧 PODCAST: How Headphones.com Secured a Priceless Domain

Andrew Lissimore started his headphones business after seeing the impressive profit margins in consumer electronics. He negotiated a deal to secure a domain name that would help his business get discovered. 👉 Listen

Establishing brand voice and story

Brand voice is how your business speaks to customers and the world. It incorporates decisions around tone, personality, brand vocabulary, and slang. Defining your distinct brand voice is important as it can:

✨ Spark recognition
👓 Influence perception
🤝 Build trust
🔌 Create connection
👨🏽‍🤝‍👨🏻 Ensure consistency (no matter who’s writing brand copy)

Create and maintain a style guide, a document that sets out clear dos and don’ts for your brand voice (as well as your visual brand requirements—more on those below). For example: “Our brand voice is confident. Our brand voice is not condescending.” This will ensure that as you hire for or outsource marketing tasks, your brand voice will remain consistent.

🍊 Success Story: This Skin Care Founder Blended Her Personal Story with Her Brand

In this guide to brand storytelling, founder Charlotte Cho explains how her personal story and that of her culture were critical to building two skin care brands. As a popular beauty blogger first, she was able to build credibility when she eventually launched. Read more

💡 Tip: Your brand voice will inform brand storytelling on your About page as well as other copywriting throughout your website and marketing. 

Designing a visual identity 

Your visual identity encompasses anything that impacts how your customers, and the general public, see your brand out in the world. This includes your logo, fonts you use on your website, photography, and color choices. 

These design decisions and assets will all be captured within your brand guidelines or style guide. If you’re not a designer, it’s still possible to DIY your visual brand and design a logo with some free tools and a few tips from the pros:

Keep it simple. A simple logo will be the most versatile, allowing it to work on everything from a website favicon to a billboard ad.
Create variations. Variations—like a wordmark as well as an icon—will help your logo fit into different applications.
Consider context. If using recognizable symbols or objects in your logos, consider what message those symbols mean in various contexts and cultures.

DIY your brand identity

Hatchful is a free and easy-to-use tool for business owners. No skills are required to produce unique logos from a range of beautiful templates.

Graphic depicting a tablet open to a logo maker. Icons and logo samples dot the background

Get started

💡 Tip: If you’re struggling to DIY your visual identity, tap into Shopify Experts. These are vetted professionals who can help you build out brand elements like logos, color schemes, and social templates.

Bringing your brand to life

As part of branding design, you will make decisions about assets like photography, printed materials, and packaging. This will ensure a consistent experience across every customer touchpoint. 

Shooting product photos

Photography is incredibly important for ecommerce brands that rely on 2D images to tell a story about a 3D product. Photography does a lot of heavy lifting as a stand-in for feeling or trying on the product in person. That’s why good ecommerce photography can increase buyer confidence—and conversion. 

Most business benefit from having two types of photos for their collections:

  1. Product photos: These are generally detailed clear shots of the product itself, sometimes on a model, but almost always uncluttered and shot against a plain background. These are well-suited toward product and collection pages.
  2. Lifestyle photos: These are more aspirational shots that show your product in the context of an environment or action. They tell a story and inspire customers with ways to use or style a product within their own lives. These shots are useful for your home page, social media accounts, and digital lookbooks

Using examples from Burst, a free stock photo resource for entrepreneurs, you can see the difference between the first product photo and the second lifestyle photo:

Product photo of a blue tea set against a solid blue background

Lifestyle image of a hand pouring water from a copper kettle into a pourover coffee maker

If you decide to go the DIY photography route due to budget constraints, you can still pull off professional looking photos with little more than a simple lighting kit and a smartphone

📚 Read: DIY Guide to the Perfect Product Photography Setup

Your DIY photos may need a little editing to get them website-ready. You can access free and inexpensive design and photo editing tools online.