Starting their own business is a dream for many men and women. Instead of reporting to a boss and following the particular hierarchy of a company, entrepreneurs can set their own rules and hours.
But starting a business does not just involve putting an open-for-business sign in the window. It involves preparation to ensure the business succeeds and is in accordance with laws and guidelines set by the local government.
The first step in starting a business is to figure out what the business hopes to accomplish. It is a wise idea to draft a business plan that clearly states your goals and what you hope to accomplish on a daily basis. According to the U.S. Small Business Administration, a business plan should include a listing of how the business will be marketed, who your expected competition will be, the names of your expected personnel, and the amount of available start-up capital at your disposal. A business plan is a good document to have and one that is often necessary for prospective owners who hope to secure a small-business loan from a bank or private investors.
Once the business plan has been developed, take advantage of any free training and counseling services that might be available. Such services offers strategies for a successful business, and established business owners might even participate by offering advice and answering questions. Learn from their successes and failures and when establishing your own business.
It's also imperative that prospective business owners decide which type of legal entity their business will be. These include sole proprietorship, partnership, limited liability company (LLC), corporation, S corporation, nonprofit, or cooperative. An attorney who specializes in business law can help you establish the legal structure that will be the most beneficial to you.
You also will have to find a business location. While there are brick-and-mortar businesses opening every day, a large number of new businesses begin on the Internet. It is very difficult to determine just how many online businesses there are since the reach of the Internet is so vast. However, the low overhead of an online business and the increasing propensity for individuals and shoppers to spend time online makes the Internet an attractive venue for a business start-up.
Small business owners also must register their businesses with their local governments. To do so, you will first need to apply for an identification number. This identification number is a 15 character identifier of your business. In the United States, the Internal Revenue Service will issue an employer identification number, or EIN, also known as a tax ID number. Much like a social security number identifies an individual, an EIN identifies a particular business. Once you have this number, you will be able to open up bank accounts in the business' name as well as register with your local government to pay payroll taxes and any sales tax necessary.
If permits or licenses are necessary for your business, you will have to apply for those as well. Prospective business owners within the United States can visit www.sba.gov/licenses-and-permits to determine which documents they will need.
Prospective small business owners can also apply for a business credit card and open up a business bank account. These accounts will help you keep your business funds separate from your personal funds. They are necessary to establish business credit as well as to purchase supplies and make payroll payments.
Starting a business can be a rewarding venture and help individuals become their own boss. Not every business will become a success, but starting out on the right foot can help.
