You want to start a business. Maybe it’s an ambitious tech startup, or maybe it’s a one-person lawn care business. Whatever the size and scope of your idea, there are a few steps everyone should be aware of as they prepare to work for themselves.
Create a Business Plan
These days, starting your own business can be as easy as throwing up a web page or registering on a few sites to offer your services. However, you’ll have much more success if you take a step back and think things through. A big part of this is writing a business plan because this is an exercise that can show you where you may be less prepared than you need to be.
Many often assume that they can skip this step if they are not seeking a loan or investors, but it can be a great document for you to get all your ideas on paper and to notice where you might have weaknesses. For example, many people neglect to do any market research. Even just looking at competitors and how you can set yourself apart from them can be helpful. Market research can also help you determine what your pricing should be like and how to best reach your audience and advertise your products or services.
Manage Your Money
Figuring out how to fund your business and then managing your money effectively is another big step. If your personal finances are a mess, you should start there. To open up extra funds for your business, you can take out a personal loan from a private lender that you can use to pay off outstanding debts. Many people use their own money to fund their business, and this is one reason people often keep their day jobs for a while as well. The other thing you need to do is set up a separate bank account for your business. This makes it easy to keep your personal affairs separate and can make things easier at tax time as well.
Do the Paperwork
No one wants to spend a lot of time on tedious paperwork, but getting all of this right at the outset can save you a lot of hassle later on. What you need will vary based on state and local law, but there are a few things everyone should consider. First, if you are running a business out of your home, what are your local zoning laws like, and will you be in violation of any of them? Next, consider your business structure. Are you a sole proprietor, a partnership, a limited liability company or some type of corporation?
How you pay taxes and your liability are among the things influenced by the structure you choose. An attorney might be able to help you determine which entity is right for you and what kind of documentation you need to prepare. You should also choose your name unless you are using your own and do any necessary registration. You may need to get a tax identification number. Finally, you should make sure that you have any required licenses, permits or certifications.