Once you have decided to start your own business, there are some important things you need to know as you go about getting your idea off the ground. You know that you need a business idea that matches your personal goals and interests. It must be unique or fill a niche gap in the market. Adequate funding and a good support network are also important.
As you start your business, there are some important things that you need to know. These will help turn your business idea into a successful and profitable enterprise.
1. Choose a business formation
You want your business to be credible, and you need to also protect yourself from personal liability. This will all depend on the business structure you choose for your new enterprise. Partnerships and sole proprietorship are an option, but they only offer tax flexibility, but your personal assets are not protected if the business is sued.
Most small business owners prefer LLC formations because of their tax flexibility and personal asset protection.
A more formal business formation is a corporation and could be more suited to you. Corporations are owned by shareholders and are separate legal entities. Their regulations are formal, and corporations and can easily raise money from investors.
If you are planning on starting a business that has a social cause and is funded by donations, then you can consider starting a nonprofit organization. This type of business structure is tax-exempt.
2. Create a successful business plan
This section encompasses several things you must plan before getting your new business off the ground.
Name your business
Choose a legal and brand name for your business according to the naming rules of your state. Make sure that the name you choose matches your business and will be popular with your target market. If you don’t have any ideas, you can use an online Business Name Generator. Once you have decided on a legal and brand name, you need to check that these are not taken. Also, make sure that the name you decide on has an available URL.
Develop your product and marketing plan
At this stage, you need to know what product or service you will be selling. Think about how it will be different from that of your competitors and how you can reach potential customers.
Financial and human assistance
Decide how you are going to run your business and how many people you will need to employ. Consider which professional relationships will be significant to you and look for a mentor, especially if this is your first time in business.
This is a good point to also understand what expenses the business will have and how much money it needs to make before it breaks even.
3. Register for taxes, open a bank account, and organize the business accounting
Consider which taxes are relevant to your state and start the registration process. The most important tax to initially register for is the Employer Identification Number. This is what you will need to open a bank account, hire employees, and register for federal taxes.
In most states, you will also need to register for sales taxes. Additionally, if you are planning to employ people, you will also need to register for Unemployment Insurance tax and withholding tax.
A good accounting system will help you keep track of your business income, expenses, payrolls, and taxes. Look for a good accountant, or if you are planning to do it yourself, find a good software system.
Separate your business income from your personal income by opening a business bank account. Also, get a credit card for your business. This will help you gain credibility in case you ever need financing.
4. Acquire any necessary licenses, permits and insurance cover
There are federal, state, and city license and permit requirements for all types of businesses. Find out which applies to your type of business and start applying for them.
Consider getting general liability or professional liability insurance. This type of insurance helps you manage your risks.
5. Build your brand and web presence
A strong brand needs to be developed from the beginning. Part of your brand is your business name, but you also need to know what the core values of your company will be.
Your website and social media presence allow your potential customers to find you and become aware of your brand. This will lead to shares and recommendations that will allow your business to grow faster and stronger.