You’ve finally decided to quit your day job and follow your passion, or you’re ready to turn a fun hobby into a full-time money maker. Congratulations! Starting your own business is a rewarding experience. But as you’ve surely heard from friends and family sharing their two cents with you, it is not always going to be easy. Especially starting out.
A common misconception is that starting a business is little more than coming up with a good idea or product and a memorable name. In reality, starting your own business also entails a lot of planning, entity formation paperwork, and legal steps. Below, we have outlined 6 important steps to starting your own business.
6 Steps To Starting Your Business:
1. Writing A Business Plan
Every successful business has some type of business plan in place. In short, a business plan is an essential element to business success, because it serves as a sort of roadmap that guides your steps and ensures you do everything you need to stay on track.
A typical business plan, which often also serves as the main document you submit when requesting funding for your business, includes an executive summary that briefly outlines your business plan, company profile, and overall goals. Also included in the plan should be a detailed company description, a market analysis that outlines your industry and competitors, a review of your product or service, and your marketing and sales strategy. Lastly, your business plan should also include your financial projections, especially if you are seeking outside funding.
2. Getting Training Or Assistance
Because building your own business, or expanding a current small business, can be a stressful experience, it’s important to take advantage of help from expert sources. Check out local business training and counseling services that can advise you at every stage of your business, from planning and launch through to expansion.
It’s important to remember that although the process can seem overwhelming, there are experts willing to mentor you. All you have to do is seek out the help.
3. Determining Your Business Location Or Medium
Selecting the right location is one of the most important elements to having a successful business. This is true for both brick and mortar and online businesses. The number one goal of any business is gaining new customers and making a sale, may it be in the form of a product or service. But it is not just enough to be exposed to a large number of people. Your business has to be exposed to its target audience from which, ultimately, the customer comes.
Finding the right location for business exposure also includes factoring in brand image, competition, zoning laws, taxes, and government economic incentives. And, of course, it is also important to consider whether your area of choice is business friendly and if you are comfortable there.
4. Procuring Financing
If you need financial assistance to get your new business off the ground, a detailed business plan will come into play when appealing for seed money. There are a number of different avenues for procuring financing for your start up, including bank loans, third-party lenders, venture capital investment, and government-guaranteed loans.
Since it is hard to imagine any of these entities will blindly hand you money, it is imperative that you showcase your business in the best light. Always be knowledgable of your product or service, your unique value proposition, as well as your competition. You will also want to project your business’ profitability to show that an investment in your business will be a smart one.
5. Choosing The Right Legal Structure During Entity Formation
You may not think there’s much consequence to which legal structure you choose for your business. After all, there doesn’t seem to be a big difference between an LLC and a PLLC at first glance – it’s really just one letter off. But in reality, the structure you choose when forming your business will have both legal and tax implications for your business.
There are many different types of business structures to choose from. Each of them comes with its own set of rules and responsibilities that may or may not suit your desired business structure. When registering your business, you can opt for a Limited Liability Company (LLC), Sole Proprietorship, Corporation, Partnership, Cooperative, or S Corporation.
Many of these categories break down even further, such as the Partnership category, which yields three types of arrangements: General Partnership, Limited Partnership, and Joint Ventures. As with all the above legal structures, each of these arrangements includes a unique set of rules, regulations, tax responsibilities, and legal liabilities.
But no matter the business structure you ultimately choose, you will need to complete paperwork to register your business, and obtain licenses and permits from the appropriate authorities before you can legally operate. This process can become quite overwhelming, but an experienced Business Law attorney can assist you in ensuring your business entity formation process goes smoothly.
6. Registering Your Business Name
Choosing the right business name and registering it isn’t just an elaborate branding exercise, it’s an important legal one. After you settle on the perfect name, which has to be a unique name no other business operates under, you will need to register it with the appropriate authorities in your state government.
Starting your own business is not an easy process, but it is ultimately a rewarding one. If you are starting your own business, contact Joyce & Dubin, PLLC for help with all your business entity formation and general business law needs.