Investing in cryptocurrency is a risky proposition, but there can be big rewards for those who do it right. If you’re thinking of starting a crypto investment company, there are a few things you need to know.
10 Steps to Launching a New Crypto Investment Business
1. Choose Your Type of Crypto Investment Business
The first step in launching a crypto investment business is to identify the type of crypto investment business you want to launch. You might choose from the following types among others:
- Business to business (B2B): You’ll be providing services to other businesses in the crypto industry.
- Business to consumer (B2C): You’ll be offering products or services directly to consumers.
- Peer to peer (P2P): You’ll be matching buyers and sellers of crypto assets directly.
2. Name Your Crypto Investment Business
Give your crypto investment business an identity so people will think of it as a well-known and respected brand. You can take the name of your crypto investment business from your industry, focus on a geographical location, or use your own name among other options.
The main goal for naming your crypto investment business is to make it sound appealing and trustworthy so people will want to do business with you.
Read our article about choosing the right business name.
3. Determine Your Crypto Investment Business Model
There are several possible types of business models for a crypto investment business including:
- Brokerage: You’ll be connecting buyers and sellers of crypto assets and charging a commission for your services.
- Exchange: You’ll be operating a platform where people can buy and sell crypto assets.
- Fund: You’ll be investing in crypto assets on behalf of your clients.
No matter which model you choose, make sure that it aligns with your business goals and the services you offer.
4. Choose a Legal Form for Your Business
By incorporating your crypto investment business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.
The business structure you choose for your crypto investment business will determine the amount of taxes you pay and which state or federal tax forms you need to file.
Read our article comparing the most common crypto investment business structures.
5. Write a Crypto Investment Business Plan
All crypto investment business owners should develop a business plan.
A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.
When developing your crypto investment business plan and strategy, you should think about the following questions your customers might have:
- How will this company’s products or services solve my problem?
- What needs does this company’s product or service address?
- What are the unique selling points of this company’s product or service?
- How will this company’s product or service be better than its competitors?
Read our article about how to write a crypto investment business plan.
6. Apply for the Necessary Permits and Licenses
There may be required licenses and permits you need to obtain before launching your crypto investment business.
For example, if you’re going to be operating a crypto exchange, you’ll need to be aware of the SEC limitations, along with those of the Commodity Futures Trading Commission. As of yet, there is no regulatory office within the US government that oversees cryptocurrency trading; however, the SEC will bring illicit activity to court under their jurisdiction.
You should also check with your local Chamber of Commerce or Small Business Association (SBA) for information on which licenses and permits you need to obtain for your specific business.
You must also register your crypto investment business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.
Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.
Read our article about obtaining the proper crypto investment business licenses.
7. Determine Your Budget & Apply for Funding as Needed
In developing your crypto investment business plan, you will figure out how much funding you need to start and grow your business.
If you have your own funds to invest in your crypto investment business, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your crypto investment business include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.
Read our article about the costs associated with starting a crypto investment business to help you determine if funding is needed.
8. Get the Technology & Software Needed to Run Your Business Efficiently
When you start your crypto investment business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues.
You may also want to invest in trading software, which can help you keep track of the cryptocurrency markets and make informed investment decisions.
In addition, if you’re starting a crypto exchange business, you’ll need to develop or purchase software that will enable you to facilitate trades between buyers and sellers.
9. Market Your Crypto Investment Business to Potential Clients
Before you start selling your services, you have to let the world know you exist. The first step is to create a website so people can learn more about your services and how they benefit them.
After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the crypto investment industry through social media and blogs so they can help share your business.
You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. Crypto investment businesses should consider the following promotional strategies for which you should start getting prepared:
- Develop an email marketing campaign
- Participate in online and offline crypto investment forums
- Engage in joint ventures and affiliate partnerships
- Attend relevant conferences and meetups
- Submit articles to popular crypto investment blogs
Read our article about how to market your crypto investment business for more tips.
10. Get New Clients & Grow Your Business
When you promote your services, you’ll start to get interest from potential clients.
Make sure you’re ready to serve these clients. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your crypto investment business.
Read our article about how to effectively grow your crypto investment business to learn more.
Starting a Crypto Investment Business FAQs
Why Start a Crypto Investment Business?
There are many reasons to start a crypto investment business. Some people are attracted to the industry because they see it as a way to make money. Others are drawn to the technology because they believe in its potential to revolutionize the financial system.
How Can I Start a Crypto Investment Business From Home?
Starting a crypto investment business from home is a great way to get started with low overhead costs. All you need is a computer with internet access and the right software and technology.
How Can I Market a Crypto Investment Business Online?
There are many ways to market a crypto investment business online. Social media, blogging, email marketing and search engine optimization are all great options.
What are Some Tips for Starting a Crypto Investment Business?
Here are some tips for starting a crypto investment business:
- Do your research on cryptocurrency in all offerings
- Create a business plan
- Register your business
- Get the right technology and software
- Find the right partners
- Stay compliant with SEC requirements
- Protect your clients' information
Where Can I Find a Simple Checklist for Starting a Crypto Investment Business?
A simple checklist to use when starting a crypto investment business is as follows:
- Choose Your Type of Crypto Investment Business: This should be based on what you are best at and how much experience you have. Remember to keep your interests, skills, and experience in mind at all times.
- Name Your Crypto Investment Business: This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
- Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
- Determine Your Crypto Investment Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
- Write a Crypto Investment Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
- Apply for the Necessary Permits and Licenses: In most locations you will be required to apply for a business license and/or permits before you can begin operations.
- Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
- Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
- Market Your Crypto Investment Business to Potential Clients: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the services they truly need.
- Get Clients & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your services.
Summary
The cryptocurrency industry is booming and presents a great opportunity for entrepreneurs to start a crypto investment business. However, it is important to do your research, create a solid business plan, and get the right technology and software in place before getting started. With careful planning and execution, you can be on your way to success in this rapidly growing industry.