Are you one of the millions of people who want to start their own business? Perhaps the better question is, will you be one of the few that go on to become small business owners?
For many aspiring small business owners, the hardest part is knowing where to begin. It’s not like when we were kids setting up lemonade stands and mowing lawns. The stakes are higher, the competition is stiffer, and the rules are stricter.
With that said, new businesses are popping up all the time. Starting a small business – while not easy – is not impossible. Here’s a road map for making it happen:
Writing a business plan
Every business idea needs a business plan to back it up. Consider it a proof of concept. A solid business plan can be presented to lenders, investors, and potential partners as a way to convince them of the merits of your idea. Writing a business plan also helps weed out any flaws in your thinking by exposing them on paper. Read the Small Business Administration’s guide on how to write a business plan for more information.
Starting a small business requires money. Some people tap into their savings, while others borrow from friends and relatives. Many aspiring small business owners apply for personal loans with no credit score needed. Using credit cards is another option. Most startups rely on multiple funding sources to get the money required to get off the ground.
Picking a name
Here comes the fun part. What will you call your business? Choose a name that’s easy to say, easy to remember, and does a great job describing what you offer. That said, it’s essential to adhere to your state’s laws regarding business naming policy. For instance, you’re usually barred from picking a name similar to an existing competitor (like calling your burger restaurant “Mick Donnell’s”).
Launching a website
Business websites offer a wonderful chance for small companies to reach people around the world. With this in mind, setting up a website for your business should be a top priority. Many online services offer easy website-building tools to those with little experience. However, given the high stakes, you may want to hire a professional web designer to create the best business website possible.
Choosing a legal structure
Now back to the boring (but essential) stuff. You’ll need to decide on the legal structure of your small business. Is it a sole proprietorship? A partnership? An LLC? A corporation? Compare these business structures, then factor in your business plan to determine the best choice. Please note it’s difficult to change your legal structure once the business gets going, so make sure to choose wisely.
Registering your company
Your small company has thus far primarily existed as a concept. But we’re almost there! You create your company’s legal existence by registering it. While you still need to operate the company for it to be genuine, once registered, it becomes a legitimate enterprise in the eyes of the law. Although the beginning of a company is an exciting time, there are still some steps to take.
Applying for authorizations and licenses
To function lawfully, several companies need certain licenses and permissions. The most typical example would be bars and restaurants, which need liquor licenses and food service permits to continue operating as public establishments. States will differ about which licenses and permits are necessary for what kinds of enterprises.
Obtaining a tax identification number, both state and federal.
Tax difficulties are the very last thing any small company owner wants. Obtaining an employer tax identification number (EIN) from the federal government is the initial step, even though adequate accounting and bookkeeping are essential for avoiding tax issues. It’s like your company’s social security number, according to the SBA. You could also require a state tax ID, depending on the state.
carrying out market research
The situation is beginning to worsen. Even though market research should be done throughout the company concept phase, further research will be needed in the weeks before your grand opening. Doing this may estimate demand, price, and other important considerations before starting a firm.
choosing a site for a company
One of the most crucial choices you’ll need to make is where to locate your company. For tax and regulatory reasons, you’ll still need a physical site even if you’re operating an online business. Additionally, it aids in assuring clients that your company is a reliable one. Things get more difficult when you build a brick-and-mortar store since zoning regulations may restrict your alternatives, and municipal taxes could impact your earnings.
People who desire to start a company are many. But there are just a few who do it. How they choose to set up their businesses will largely determine which of them goes on to succeed. Although it doesn’t ensure company success, it does raise the chances. Good fortune!