How To Start A Business
Step 1 Prepare a Business Plan.
Even if you are only starting a small business and not trying to find others to invest in your new idea, writing a business plan will help you focus on what you need to do to succeed. An effective business plan will summarize the new business, the industry in general, who are its competitors, its sales and marketing strategy, its financial needs, and its growth prospects. Learn More! Many websites provide free business plan templates to begin. There are also organizations that will help you write your business plan and there is even software so you can do it yourself.
Step 2. Choose A Business Name.
Choosing the right name from the beginning is very important. When you form your business you may find out that your name has already been taken or that someone has trademarked that name already. Learn about trademarks and choosing a name here. There are also trademark attorneys and other business that can help you search names and prepare trademark registration paperwork.
Step 3. Choose a Business Structure.
A business can be a sole proprietorship, a partnership, a limited partnership, a limited liability company, or a corporation. What are the differences? Do you need to incorporate? Where should you incorporate? You must consider the legal and tax aspects of starting a business. If your business is a partnership, LLC or Corporation you will need to legally form the business entity. Most entities require you to file a form with your state’s Secretary of State Office to establish its legal existence. Learn More! Although this sounds difficult there are many resources available to help you.
Step 4. Obtain a Tax ID Number For Your Business.
If you are a sole proprietor or single-member LLC, your social security number will normally be your tax identification number for both your federal and state taxes (although there are exceptions). However, if you are a partnership, multi-member LLC, or corporation you will need to obtain an Employer Identification number (EIN) from the IRS, and possibly file other paperwork, such as a form 2553 to become an “S-Corp”. Visit the IRS website for more information.
Step 5. Obtain a DBA for your business.
If you are a sole proprietor or a general partnership it is a good idea to obtain an official “doing business as” name authorization (a “DBA”). Unless you have formed a corporation or LLC and registered it with the State, in most states you need to file what is often called a fictitious business name statement. This is obtained from the county by filing a form, paying a small fee and then publishing the name in a local paper for a few weeks in case anyone objects to your use of that name. Corporations, LLCs and other entities registered with the Secretary of State do not need to obtain a DBA, since their corporate name acts as their official trade name, but some choose to do so for marketing or other business reasons. There are also services that will file your DBA online for a small fee.
Step 6. Open a Bank Account in your business name.
Choose a bank that will take care of your needs. Service businesses and retailers have different needs from their banks. Some businesses make frequent deposits of cash, others only deposit checks once a week, or you may do business internationally and need to do money wires. You may also be looking for a bank that can help with your financial needs, such as obtaining a credit card, doing credit card processing or obtaining a business loan.
Step 7. Apply for a Business License.
Most businesses require some type of license or permit from the city, county or state in order to operate their particular business. At a minimum almost every business must apply for a business license in their city. Learn More! When you are ready, apply for a business license using our free directory.
Step 8. Find a Location and Equipment.
The perfect location is not always possible, but being in the right location can make or break a business. How do you choose? What can you expect when negotiating an office or retail lease? Find out More . You will also need furniture, computers, software and other equipment. Should you lease or buy? Where can you find the information you need?
Step 9. Buy Business Insurance.
There are many different insurance products available for every type of business, from home based businesses, to product manufacturing, and services. Some types of insurance may be required, such as workers compensation insurance.
Step 10. Market your business.
You need to find customers and let others know who you are. Of course, everyone must have a website these days. You should also use both traditional and new techniques to market your business such as print and online ads.