Are you thinking about starting a business? If you are, then you may be wondering where to even begin. Going about starting your business haphazardly can cost you time, money, and effort.
Luckily, some steps can optimize your startup’s start. While the steps can differ from founder to founder, the following are the essentials:
- Do your homework (market research).
- Come up with your business plan.
- Find funding.
- Decide where (or how) you want to situate your business.
- Decide what entity your business will be (LLC. vs. S-Type vs. C-Corp vs. Sole proprietorship or partnership).
- Register your business.
- Get federal and state IDs.
- Get the necessary licenses and permits.
- Open a bank account for your business.
Execute the steps in this guide properly, and you’ll soon be at the helm of your startup.
1. Determine if Your Business Can Do Well
Of course, there’s no other way to judge success other than doing so after the fact. Nonetheless, you can get an idea early on about whether or not your business will do well — at least in your locality.
This is where market research comes in. When you conduct market research, find out more about the following:
- The needs of the people
- Other similar businesses in the area (i.e., competition)
2. Draft Your Business Plan
What should your business plan contain? It should have the following:
- What service you’re offering
- How you’ll fund it
- What you plan to do to help it grow
- Its structure
Think of your business plan as having two roles. It helps you stay on track throughout the process, and you can use it as a pitch when you’re looking for investors or partners.
3. Fund Your Business
If you intend on being a sole proprietor, you’ll have to pay out of pocket to capitalize your business. However, an alternative to pooling funds is finding either investors or willing partners.
4. Brick-and-Mortar or Online?
Every business needs a location. Locations can either be physical or online. This is a decision you need to make based on what kind of business you want to run.
5. Choose an Entity Under Which to Register Your Business
There’s nothing wrong with being a sole proprietor. However, you can also register as a corporation (S or C Corp), a limited liability company (LLC), or a partnership. It comes right down to how you want to see your business run.
Choosing a business structure or entity will also affect your registration. For more information on business structures and entities, visit the Small Business Administration.
6. Name Your Business and Register It
Choosing a catchy name is the easy part. The hard part is ensuring that no other business has the rights to it. You can check the United States Patent and Trademark Office to see if another business has the same name as yours.
If no business has the name you want yours to be called, register by filing for a federal tax ID.
7. Apply for State and Federal Tax ID Numbers
There are two kinds of tax ID numbers you need to get. All businesses will require an employer ID number (EIN). Most — but not all — states require state IDs for small businesses.
If you registered your business as a corporation, LLC, or partnership, you’ll likely need to apply for a state tax ID number. Check with your state to see the requirements for non-sole proprietorship businesses.
8. Get the Right Permits for Your Business
The permits you’ll need depend on the kind of business you have. For instance, if you’re starting any kind of food-related business, food handling, food safety, and sanitary permits will be a must. If you have a plumbing business you will need to have a plumbing and fire suppression systems permit. Make sure to research what your specific business calls for.
9. Get a Bank Account for Your Business
Your personal bank account should not be used for your business even if you are operating as a sole proprietorship. To get a business bank account, you’ll need your social security number as well as your EIN and state tax ID number (if required).
Start Your Business with the Support Others with Your Financial Prowess
Starting a business goes hand-in-hand with knowing how to manage finances. From managing capital to growing stakeholder investments, dealing with money is something other startup CEOs encounter daily.
Having the entrepreneur spirit, you can help others and yourself. To learn more, subscribe to Wealtheo+ and access our courses and training .