The Five Important Steps to Starting a Business

cf6Everyone dreams of having their own business, sitting at a massive walnut desk and reading optimistic balance sheets or having a handful of checks and money from customers to deposit into the bank. With business success comes financial freedom and while money does not buy happiness, a large bank balance gets you to the front door of happiness.
It’s not easy, especially now after the economic collapse of 2007-2008. But the dream of having your own business is possible if you follow these five steps.

Step One is the Development Stage
Before a dollar has been spent on anything, the prospective business owner needs to write out a business plan, a mission statement, a name for the future business, the location of the operation, the physical size of the business facility, and possible employees.

Step Two: Explain your Business Concept to Everyone
Start with friends and family, use what you have written down or recorded in Step One. Leave a copy if someone is too busy to read it when you ask. They will be impressed and may become a part of your business in the future. Search out honest opinions about your ideas and business name and location. These insights can be valuable.

Step Three: A New Business Requires Outside Help, Licensing, Supplies, Inventory, Money Talk to realtors about the business location, code enforcement for permits and business regulation, banks for funding, manufacturers for product. As the business owner, you are undergoing an intense learning experience on all matters concerning your business. Do not be overwhelmed but persevere. This stage will be filled with many roadblocks and frustrations. For example, you find a supplier for your product that meets your requirements, but the supplier works on a cash basis with new distributors. Now is the time that your bank or an agency like Crest Financial can help the new business see the light of the first day of operations. It is all part of the development of your business, and you should treat it as fun even though it isn’t. It is hard, necessary work.

Step Four: Implementation/Actualization of the Business
The race to success is starting, it is not a sprint but a marathon. Every element of the business must be aligned to begin functioning at the same time. It’s an exciting time when your first shipments arrive but if you have no employees at your location to accept the items what good is it. The business may need a forklift to unload large and heavy items, and the business owner must be ready for this. Now is not the time to be learning what your particular business requires to operate successfully.

Successful Business Operation and Murphy’s Law Step Five
If it can happen, it will. Be ready for everything. The worst will happen, maybe before the best day of your new business’s life.

ESSENTIAL TIPS FOR STARTING A BUSINESS

cf20Starting 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.

ESTIMATE FINANCES
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?

SECURING FINANCES
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!