If you’ve got the seed of an idea in your mind and want to start a business, there’s a lot of things you need to learn first. The reward can be extremely satisfying if your new venture is a success, but there’s a considerable amount of work to be put in along the road. Fortunately, you’ve got us to help you wade through the intimidating world of business. Below, we will guide you through nine crucial steps for setting up a new business.
Before you start putting down your business ideas, you need to make sure it doesn’t exist in abundance already. There’s no point in starting a business that already has fierce competition. For example, you want to sell sporting goods. The market research will tell you that there’s already an enormous number of well-established businesses that provide this service. Your business will aim to supply a niche service.
Once you’ve worked out the gap in the market, you can start laying down the scaffolding for your business. You need to detail everything from how your company will be structured, how you will run it, and how you plan to grow as a business. When you start, your business plan will help you to bring people onto your team and see it as a worthwhile venture.
Through your business planning sessions, you will work out how much funding you need to get your company off the ground. Luckily, you don’t need to have all of the profits from the outset because there are numerous ways to raise funds in this day and age. You could approach a bank and see if you’d be eligible for a business loan. Alternatively, if you’re providing a sought-after product you could appeal to the public for funding and ask them to back your business for something in return.
This crucial step will determine how your business is structured and will have a direct impact on your registration requirements and personal liability. For this article, we will examine LLC (Limited Liability Company), which combines the corporation and the partnership structures. Essentially, the LLC protects your assets in the event of any lawsuits or bankruptcies. This would give you peace of mind from the onset. To help you decide which avenue to go down, this article compares the two major LLC formation services.
Base of Operations
Whether it’s physical or virtual, your company is going to need a base of operations. Your choice of business home will directly impact your registration requirements and how much you need to pay in taxation. Before you make the crucial decision, you should check whether your state offers any incentives. You can find incentives for a range of different things including being a green business, job creation, and technology.
Registering Your Business
Once you’ve figured out everything in the above, including a powerful company name, it’s time to register your business and make it a legal practice. For conducting business under a different name, you will need to register with the federal government as well as your state government.
To set up a bank and start shifting money about as a business, you may need to register for an employer identification number (EIN). This number works on the same basis as your social security number, it’s just to track money back to your identifiable business. Check your state’s legislations because not all of them will require you to use a tax ID.
Permits and Licences
As you’ll have noticed, there are plenty of legal hoops to jump through. There are countless permits that depend on the type of business you run, where you work from, and what state you’re in. You can find out more information here.
Finally, once you’ve hit every step above, you need to open a small business checking account to run all of your financial affairs through. You won’t face any issues as long as you’ve already completed your registration and permits.
There’s a lot of work to be put into a new business, but once you break it down and start moving forward, you’ll find you’re up and running in no time.