9 Steps to Starting a Business
Starting a business involves planning, making key financial decisions and completing a series of legal activities. These 9 easy steps can help you plan, prepare and manage your business. Click on the links to learn more.
- Have You Prepared Your Business Plan?
You won’t want to start your business without having a business plan. A written guide will help you map out how you will start and run your business successfully. Below are some helpful links to prepare this.
2. Think About Getting Business Assistance and Training.
Take advantage of free training and counseling services. These services are offered at several locations and are very helpful. Below are some helpful links in finding these services:
3. Choose a Business Location.
Choosing a business location is perhaps the most important decision a small business owner or startup will make, so it requires precise planning and research. It involves looking at demographics, assessing your supply chain, scoping the competition, staying on budget, understanding state laws and taxes, and much more.
Here are some tips to help you choose the right business location.
Determine Your Needs
Most businesses choose a location that provides exposure to customers. Additionally, there are less obvious factors and needs to consider, for example:
- Brand Image – Is the location consistent with the image you want to maintain?
- Competition – Are the businesses around you complementary or competing?
- Local Labor Market – Does the area have potential employees? What will their commute be like?
- Plan for Future Growth – If you anticipate further growth, look for a building that has extra space should you need it.
- Proximity to Suppliers – They need to be able to find you easily as well.
- Safety – Consider the crime rate. Will employees feel safe alone in the building or walking to their vehicles?
- Zoning Regulations – These determine whether you can conduct your type of business in certain properties or locations. You can find out how property is zoned by contacting your local planning agency.
Evaluate Your Finances
Besides determining what you can afford, you will need to be aware of other financial considerations:
- Hidden Costs – Very few spaces are business ready. Include costs like renovation, decorating, IT system upgrades, and so on.
- Taxes – What are the income and sales tax rates for your state? What about property taxes? Could you pay less in taxes by locating your business across a nearby state line?
- Minimum Wage – While the federal minimum wage is $7.25 per hour, many states have a higher minimum. View the Department of Labor’s list of minimum wage rates by state.
- Government Economic Incentives – Your business location can determine whether you qualify for government economic business programs, such as state-specific small business loans and other financial incentives.
Is the Area Business Friendly?
Understanding laws and regulations imposed on businesses in a particular location is essential. As you look to grow your business, it can be advantageous to work with a small business specialist or counselor. Check what programs and support your state government and local community offer to small businesses. Many states offer online tools to help small business owners start up and succeed. Local community resources such as SBA Offices,Small Business Development Centers, and other government-funded programs specifically support small businesses.
The Bottom Line
Do your research. Talk to other business owners and potential co-tenants. Consult the small business community and utilize available resources, such as free government-provided demographic data, to help in your efforts.
The below links will help your location search:
4. Finance Your Business.
Improve your odds of business success by understanding your financing needs as well as the options that are available to help you start, manage and grow your business.
Estimating Startup Costs
If you are planning to start a business, it is critical to determine your budgetary needs.
Since every business is different, and has its own specific cash needs at different stages of development, there is no universal method for estimating your startup costs. Some businesses can be started on a smaller budget, while others may require considerable investment in inventory or equipment. Additional considerations may include the cost to acquire or renovate a building or the purchase of long-term equipment.
To determine how much seed money you need to start, you must estimate the costs of doing business for the first months. Some of these expenses will be one-time costs such as the fee for incorporating your business or the price of a sign for your building. Some will be ongoing costs, such as the cost of utilities, inventory, insurance, etc.
While identifying these costs, decide whether they are essential or optional. A realistic startup budget should only include those things that are necessary to start a business.
These essential expenses can be divided into two separate categories: fixed and variable. Fixed expenses include rent, utilities, administrative costs and insurance costs. Variable expenses include inventory, shipping and packaging costs, sales commissions, and other costs associated with the direct sale of a product or service. The most effective way to calculate your startup costs is to use a worksheet that lists both one-time and ongoing costs.
5. Determine the Legal Structure of Your Business.
Below are links that explain each structure.
6. Registering a Business Name (“Doing Business As”)
Choosing the name for your business can be tricky and almost as difficult as creating your business plan because there are several key things that you want to remember when choosing your name. Below are some helpfull links:
Registering your business name links below:
7. Get a Tax Identification Number.
Learn which tax identification number you’ll need to obtain from the IRS and your state revenue agency.
8. Obtain business licenses and permits.
9. Understand Employer Responsibilities.
Learn the legal steps to hire an employee. Below is a great link .