Starting a new business is an adventure! You have your carefully crafted business name, you know what type of services or products you will provide, maybe you even have the location already chosen. Now it’s time to set the foundation for your business by creating a checklist of the important things to handle while you are on your way to opening your doors. Here are 8 essential steps to take:
Don’t go into battle blind! You need to understand two very important things about your industry; who you are catering to and who you are up against. For your competition, it is not just about giving them a once-over, you will need to make it a consistent practice to keep an eye on what they are doing, where they are weaker than you (or stronger), what seems to resonate with the audience. This will also contribute to the second goal in market research, which is to understand your customers/clients. Studying your competition will give you some insight to the type of people who are interested in your services. Further than that, you should be researching what trends your audience is following and how to leverage your products or services to connect with your audience through those trends.
2. Write Your Business Plan
As mentioned, starting a new business is an adventure, so you must create a roadmap to help you navigate the process and stick to your goals. A business plan is not purely for your own benefit, but your business plan will allow you to present your concept to investors or when you are applying for a loan to start your business. Your business plan is vital to convey what your strategy will be and why investing in your business will be a smart choice. For help writing a solid business plan, Entrepreneur.com has the details to get you going in their article, “How to Write a Business Plan”.
3. Fund Your Business
One of the most important steps is funding for your business. When creating your business plan, you were able to pinpoint the basic expenses you can anticipate. With that knowledge, you must plan out a budget for start-up costs. Business start-up loans can be acquired from a number of places, but sometimes there are obstacles in the way. What if you can’t prove your income? There are certain loans made specifically to help find a way around most obstacles, and when you have good credit you can often acquire a loan such as a “No Doc Loan” or a “Start-Up Loan” for starting a business. Need a consultation? We can help you in that department!
4. Develop Your Business Structure
Thinking ahead to what will affect your business registration requirements, how much you pay in taxes, as well as your personal liability, you must choose a legal structure that will positively influence all of these factors. Choosing from a Sole Proprietorship, Partnership, S Corp and so on, will all have different effects on your taxes, or even how much of your personal assets are at risk. Entrepreneur.com can provide more of the basics to understanding what options you have and how it will affect your business.
5. Register Your Business
Make your business name legal and protected, but registering your business name. How and where to do this will partially depend on what you decided in the previous step, which is your legal business structure. For most small businesses, registering your business is an easy affair, simply register your name with state and local governments. States have websites to use individually, such as California’s “Agency Services”. In some cases you won’t need to register your business name at all, (i.e. using your personal name as your business) but you need to decide whether this might cost you in tax or legal benefits. SquareUp.com has a great step-by-step guide to registering your business for a more detailed description of how to complete these steps.
6. Get Federal and State Tax IDs
Your Employer Identification Number (EIN) is something I’m sure that you have heard of, and it is an important step in starting your business. This is your federal tax ID, and it is free to register for. You will use this number for things such as opening a business bank account, and filing your taxes, etc. Some states may require you to also get a tax ID
7. Open a Business Bank Account
A business bank account will help you to stay legally protected. Once you have received your Federal Tax ID (EIN), you can open your own business account. These accounts can be checking, savings, credit, or a merchant services account. This will help you to keep your business financials separate and easy to track when it comes time to do your taxes. It will offer personal liability protection, keeping your business funds separate from your persona funds. In terms of professionalism, it will allow your customers / clients to have an array of options for paying directly to the business, and will even allow your employees to handle day-to-day banking tasks.