Nothing can be more personally and financially rewarding than starting a business.
Lots of financial and mental capital must be invested. This requires planning, steady decision-making and following a detailed plan.
Below is a list of what it’ll take to get your business idea off the ground and turn a long-term profit.
Market Research
Is there a market? This is a fundamental question that must be answered before moving forward with grand plans of building a successful business.
A clientele base must be available and market research will reveal the details. Market saturation shouldn’t deflate your plan. A competitive analysis can help shape your business into something unique and more desirable than the rest. These two research areas will both help you see where customers are and how you’ll match up against the competitors.
Put Your Business Plan in Writing
What you plan on doing will define your business and how it goes about making a profit.
The principal components of a business plan include guides to starting and managing the day-to-day. It’ll also provide the business instructions on how to structure, operate and flourish as a new business.
Build a 3-5 year forecast into your plan and be sure to re-visit the plan frequently! There are varying factors (external and internal) that may change your path. Be sure you update and adjust your plan accordingly.
Funding
Perhaps to most important concept in the business world is that it takes money to make money.
Be prepared to invest in both the initial stages of your business and beyond. Bankability comes with time and typically a minimum of 2 years in business. Don’t rely on the banks for investment funds unless you’re willing to secure the loan with personal assets.
These important financial decisions are critical for the upstart and long-term health of your business. Among the decisions you’ll make will be determining how much funding you’ll need and figuring out whether you’ll self-fund or rely on outside assistance. Those aspiring to start their business must also conduct research on what type of government incentives and resources are available to help with their business plans.
Location
A lot will be determined by where your business is located.
Zoning, taxes and regulations will vary depending on the site of your business. Or, if you decide to launch your business from home, there are tax liability considerations to account for, as well.
Structure
Whether you opt for a sole proprietorship, partnership, S-Corp, C-Corp or Limited Liability Company, the structure you select will impact how you pay taxes, raise money, deal with liability and the type of forms you’ll use for tax and legal purposes.
Naming Your Business
Selecting the right name for your business is more important than you think.
It’ll reflect your brand, value and personality. Let your creativity and marketing prowess shine as you select your name – but also be careful that the name isn’t already taken.
Registration
In order to make your business a distinct legal entity, you’ll need to register your business.
This step will be governed by the business structure and location.
In most cases, this step will be accomplished by submitting the business to state and local governments.
Tax Identification
One of two certainties in life and the business world are taxes. The state tax and federal ID numbers (Employer Identification Number) are similar to a Social Security number. They function as the ID that’s used to pay state and federal taxes. Furthermore, this unique ID will be needed to run Human Resources, open bank accounts and apply for pertinent licenses and permits that allow you to conduct business.
Get Licenses and Permits
Some combination of licenses and permits will be needed to keep your business afloat and compliant. Be sure to contact your state and local (city/county) offices and research the various licenses required by your business. You might be surprised!
These come with fees that are determined by the nature of the business. They are also subject to the location and local and state governance.
Business Bank Account
Once you “open the doors” and accept or spend money, you’ll need a business bank account to keep track of funds and be compliant to the rules and regulations of owning a business.
The benefits of a business account go beyond compliance. It will also streamline credit accounts and merchant services that allow you to accept various payments in a centralized business hub. In addition, the bank you’ll do business with will offer perks and maximize your purchasing power to keep your business moving forward.
For additional guidance on setting all of this up, contact us today.
