Follow these simple steps to start your next business.
1.) Perform market research. Research your business idea and determine how profitable it will be. There is nothing worse than starting a business only to determine that it will not be profitable.
2.) Develop a business plan. You will find that your business plan is a free flowing document that will change almost daily at the start of your business. It needs to be complete enough that you can use it as a reference when you can’t remember your original plans. If your business is going to require capital to get it off the ground then any investors, and or lenders is going to want to look at this document. Especially your financial projections. Don’t forget to include an exit strategy for your business.
3.) Determine the Best Business Structure. Common types are: Sole Proprietor, Limited Partnership, Limited Liability Company (LLC), Professional LLC, Corporation, Professional Corporation, Sub-chapter S Corporation, Nonprofit Corporation or a Benefit Corporation. You need to spend some time here examining the different types of entities and how they can protect your assets. It is always advisable to seek legal counsel when making these decisions.
4.) Select key business advisors. One of the best things you can do for your business is to surround yourself with key business advisers to help you navigate the many facets of owning a small business. For example you will benefit from having a great accountant, attorney, leading institution, Insurance Agent just to name a few.
5.) Insure your Business, and Comply with Licensing Requirements. Your business will require insurance. The type of insurance needed will depend upon the type of business you are operating. If you are going to have employees you will need the following insurance and licensing requirement:
- Unemployment insurance
- Workers’ compensation
- OSHA requirements
- Federal tax
- State and local tax
- Self-employment tax
- Payroll tax requirements (such as FICA, federal unemployment tax, and state unemployment tax)
- Sales and use tax
6.) Get necessary tax identification numbers, licenses and permits. Remember to check licensing requirements with State, County and municipality requirements. Even if you are operating out of your home you must comply with local licensing requirements. What is a Tax Identification Number? It serves as a social security number for your business. It is required if you plan on having any employees. You will need to contact the IRS to get a tax identification number.
7.) Get your financial house in order. You may want to use an accountant, or handle finances yourself with a small business accounting solution. Either way, properly account for all business disbursements, payments received, invoices, accounts receivable/accounts payable, etc. And if you don’t have enough capital to start a business, this is also the time to seek funding from your local bank.
8.) Check Zoning Requirements If you plan on operating your business from your home you will need to check your local zoning requirements and make sure you comply with these rules. If you cannot operate from your home location then you will need to lease space.
9.) Open a Business Bank Account. This is probably the biggest most small business owners make and that is they fail to separate their personal and business accounts. Most banks will require company details, such as the date the business was formed business type, and owner names and addresses. If your business is not incorporated, most banks will require a DBA (doing business as or fictitious business name). Contact your bank about requirements prior to opening an account.
10.) Free Assistance from Local Resources. Every business owner needs guidance during the start up and running of their business. Your local Small Business Administration has a variety of programs available to assist you through your journey as a small business owner. These services are free of charge and is a great way to get your business off the ground.