November 20, 2014
Those who want to start a business off on the right foot need to engage in some careful planning and then take some important legal steps in order to prepare to do business with the public.
The following sections cover the planning stage, the financing stage and the legal preparation stage that a business founder will ideally need to go though in order to start a business.
The Planning Stage
The first step to take when you want to start a business should be the preparation of a detailed business plan. This blueprint for your new business will cover how you will set up and run your business profitably, as well as what your startup costs are likely to be.
If you are new to starting businesses, then you can take a course on how to start a business properly, as well as some guidance on how to operate successfully to give yourself more information, strategies and confidence.
You then need to identify suitable business premises of appropriate size and zoning located where your potential customers can easily find you, and which is currently available for rental or purchase. Be sure to contact the landlord or owner to determine availability, whether you will qualify to buy or rent it, and the costs involved in securing it.
The Financing Stage
Once you have successfully passed the planning stage, you are ready to look for financing for your new business.
If you are independently wealthy, then you can finance it yourself. Alternatively, you can seek additional private financing options from well
to do family members or friends by requesting an audience with them and presenting your business plan.
If those methods of funding do not give you the amount you need to start a business, then you can apply for more public funding methods, which would include government backed business loans and bank loans. Depending on the nature of your business, grants may also be available to you.
Another option involves approaching venture capital companies with your business plan to see if they might be interested in providing financing.
They typically pool their investors' funds and so have more money to invest in worthy business ideas.
The Legal Preparation Stage
This is the final stage of the business startup process and it typically starts with deciding upon a suitable legal structure for your business. For example, it can be a sole proprietorship, a partnership, a corporation, a non-profit, etc.
You then need to come up with a business name and register it with your state's government, usually via the Secretary of State's office.
At this stage you can obtain a Tax Identification Number from the Internal Revenue Service, as well as from your state's tax authority. If you plan on hiring employees, then you will need to look into insurance that will cover workers' compensation, unemployment and disability. Securing liability and property insurance may also make sense.
The final step that needs to be taken before you can open your business is to obtain all permits required to operate your business from the appropriate federal, state, county and city authorities.
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Category: Personal Finance