Starting your own business can be a dream come true. However, proper steps should be taken to guarantee success in a startup. Planning is a must when you are responsible for financial decisions, legal procedures and running your business proficiently. Use these essential tools to guide you through the process.
FORM A BUSINESS PLAN
Designed as an outline of the purpose of the business, a business plan looks down the road and determines goals that are hoped to be accomplished within the next few years. It may include a description of the company, how it is different from other companies of the same nature, marketing strategies, how it will be funded and proposed financial projections.
CHOOSE A LOCATION
Location is a huge factor. Check out the competition in the area, potential customer traffic and the safety of the location. Zoning restrictions can limit the type of business or what products are sold.
According to Crest Financial, one mistake business owners make at the beginning is underestimating finances. Unexpected costs may include upgrades to the building and renovations not supplied by the landlord, purchase of extra display cases and racks, and technology installation such as computers, phones, and Point of Sale (POS) systems. Taxes must be paid. Revenue must be able to cover the salaries of employees. Will there be plenty of capital to see the business through a rough patch, to make loan payments and pay the other bills?
Most potential business owners need some financial assistance to start their business. Banks and other lending institutions are usually the first place to consider. However, there are business and research grants available for specific business types, minorities, and funds that are supported by government agencies. Private investors may also provide financial aid.
TAXES, TAXES, TAXES
The IRS requires the establishment of a legal business structure in order to decide which form is to be filed for federal, state, employment and property taxes. These include:
• Corporation: For big companies with many employees
• S Corporation: Business owner is taxed on a personal basis
• Partnership: More than one person is responsible for company assets
• Limited Liability Company (LLC): Combines selected features of a corporation and a partnership
• Sole Proprietorship: One owner is liable for the company
REGISTER THE BUSINESS
Business names must be registered with the state government in order to receive a tax identification number for state and local taxes. It also helps business owners receive disability insurance, unemployment benefits and workers’ compensation. After the business is registered, owners are eligible to acquire necessary licenses and permits.
Once a business owner understands the requirements and responsibilities of owning a business, then it is a major stepping stone toward success!