You have decided to take the plunge, by establishing your very own business. You’re in good company too as the Small Business Administration reports that millions of people start new businesses every year, ranging from garage- or basement-based enterprises to franchises and beyond. To successfully launch your business, you will need to keep the following in mind:
1. Create a business plan. Develop a plan that will take your business from inception to further out, with you visualizing where you want your business to be in the coming months and years. A business plan will help you to formulate what must be done to get established including your start up costs, licenses and fees, and the cost of doing business. Having a business plan will also help you secure funding as lenders, including banks and investors, will be able to gauge your plans.
2. Select a business structure. Legally, you will want to structure your business to separate your personal accounts from your business accounts. You will also want to consider personal liability and your tax ramifications. At this point, you may want to work with a tax accountant or a financial advisor to establish the business structure that is right for you. Your choices are many and include a sole proprietorship, a limited liability company, a cooperative, a partnership, a corporation or an S corporation. Make sure that you understand the one that works best for you because it will cost you to make a change later on.
3. Register your business. Once you determine your business structure, you are ready to register it with your state. Your state’s department of corporations or similar department will handle this. You will need to have articles of incorporation or a certificate of charter drawn up and you may need other documentation per your state. Expect to pay a fee for this process, one that includes registering your business name. Once your business is registered, contact the IRS to obtain an Employer Identification Number for your enterprise. This 9-digit number should be used for all business dealings including opening up checking accounts, applying for credit and payroll.
4. Obtain licenses and permits. When you registered your business with your state, you paid the appropriate fee and may have received a state license. Separate licenses for handling food, shipping goods and paying employees may also be required. Locally, your community may require that you put in for an operation license. This may apply to a businesses operating at home and may also involve the payment of an annual fee with your registration.
5. Seek financing. Does your business require start up funds? If not, you may still need a business credit to track your transactions. Apply for credit through your bank, a credit union or other financial institution. If you need significant start up funds, expect to pitch your business idea to investors who may want to take a slice of your business in exchange for providing funding. Explore venture capital and grants as options for financing your start-up.
6. Choose your location. If you can start your business in your home, in a spare bedroom or in your attic, basement or garage, then your business address is your home address. If you need more room, identify the amount of space that you need and search accordingly. For franchises, you will most likely work with the home office to find a suitable location. For a new company that will be based on shipping, you will need warehouse space. Office space is plentiful as is retail space. Consider your foot traffic needs and find the place that you can use for a year or more.
7. Get ready for business. Hire and train employees, if they are needed. If not, do the work yourself or hire contracted help until you are ready to hire permanent staff. Prepare to open for business by launching a website, notifying local and social media, printing up fliers and getting the word out. If you have a physical-based business such as a retail store, invite the mayor and local dignitaries for your ribbon-cutting ceremony. Serve snacks and give away door prizes. Make this a major event to create buzz.
Success for Business
If starting a business seems like a daunting prospect, it is. However, you can get mentored by other business people including retirees. Check out the SCORE website for assistance, including mentoring and classes.
SCORE: Starting a Business — http://www.score.org/topics/starting_business