Opening a business for the first time can seem a little intimidating for beginners. However, the internet and technology has evolved to a point where opening a small startup can be done in only a few clicks. But despite the ease of access, you still need to think and plan out a lot of factors. Here’s a simple guide for beginners to help them open their first small business.
It All Starts with an Idea
All the businesses you see in public or online started with a mere idea. This idea, along with a specific niche, is what turned into a well-known brand that many people know about. This is how your business is going to come into fruition. Seeing as how this is the first step towards starting a business that will be successful, you can take as long as you need to pick a niche and contemplate the best idea. There are plenty of lucrative niches you can choose from such as pets, food, personal wellness, and even professional editing services. The best way to choose the right niche for you is to dive into your personal interests.
You Need to Prepare for Heavy Financing
Once you’ve finally settled on what your business is about, now’s the time to plan out how you’re going to finance it. Businesses, regardless if it’s public or online, is an investment within itself. Despite the costs, there are numerous methods you can use to finance your business. Taking out a small business loan is probably your best bet as it provides quick access to a lump sum of funds in a short amount of time. But you might be hesitant to do so if you’re already dealing with student loan debt. A private lender can help you out by offering to refinance your student loan into a new obligation. This allows you to take out the money you need while consolidating your debt into a new single payment. With the lower interest rates a private lender can offer, debt becomes less of an issue.
What Structure Will You Choose?
You’d be surprised how many first-time business owners get stuck when deciding on a structure for their venture. A business structure is basically how you organize your startup’s affairs. By affairs, we mean tax payments, government regulations, and handling your personal assets. This is one of the most important decisions you have to make as a new startup owner. There are four types of structures to choose from:
- Limited liability company
- Sole proprietorship
While there’s not exactly a right or wrong choice, it’s one that can impact a lot, so you need to choose wisely. For newcomers, choosing to be an LLC is the way to go. The LLC structure provides you with asset protection and keeps you safe from claims. You have much greater tax flexibility than the other options. That’s not to say the other options don’t come with their own benefits. However, being a sole proprietorship, for example, is risky as you’re responsible for everything.