One of the most exciting and rewarding experiences you can have is starting your own business. However, there is a lot to think about. There’s much more to it than simply having an idea and running with it.
In this blog, we’ll explain the process of starting your own business.
15 Steps to Start a Business
Below, we will outline the 15 steps to start a business.
Choose the right opportunity
The first step to starting a business is to decide what type of business you want to create. This will depend on your expertise as well as the time and money that you can invest. Some ideas can be launched from home with little to no money.
Draft a business plan
Once you’ve decided on the type of business you want to start, you’ll need to draft a business plan, which will include details of your products/services, how you will make money, who will be working with you, and more. You will need a business plan to show lenders and investors when reaching out for funding. In addition, it will help you chart the course for your business.
Choose a structure
When you decide to start a business, it’s important to keep in mind that the legal structure of your business will impact your taxes and liabilities. Consider consulting with a tax professional to choose the best structure. Of course, if things change in the future, you can change your structure.
Obtain a federal tax ID
To file taxes, open a bank account, and perform other essential tasks, you’ll need an EIN, or employer ID number. The application can be found online and only takes a few minutes.
Apply for licenses and permits
When you start a business, you will need a business license at the very least. If you’re starting a restaurant, you’ll need health inspections and possibly a liquor license. If you’re a hair stylist, you’ll need a cosmetology license. Take the time to research the licenses and permits that are required for your business. Consider reaching out to your local Chamber of Commerce and/or economic development officials in your city to learn more.
Open a bank account
The best way to manage your business finances is to keep them separate from your finances. A business bank account can help and is easy to set up. Bring your paperwork to the bank and speak with someone that can open accounts.
Understand financing options
Most entrepreneurs need funding to start a business. Unfortunately, most business loans are only available for businesses that have been in operation for 6 months or more. Therefore, you’ll want to consider other options such as personal savings, crowdfunding, business grants, personal loans, and more.
Get a business credit card
A business credit card can help cover expenses while your cash flow is unpredictable and keep your business and personal finances separate. Typically, your credit score is used to determine your eligibility for a business credit card.
Choose the right accounting software
When you start a business, you need to keep records showing your expenses versus your revenue. Accounting software can make this easier. There are lots of accounting software options, including free ones. As you expand, you may want to consider working with a bookkeeper that can help you make sure that your records are accurate, which will make things like filing taxes and applying for financing much easier.
Prepare to pay taxes
As a new business owner, you’ll likely need to pay taxes quarterly, not just during tax season. However, you’ll also have a few tax breaks that you can take advantage of.
Business taxes are more complicated than personal, so you may want to consider working with a tax professional- especially when you are just starting.
Purchase business insurance
You will need to protect your business and personal assets just in case something happens. Therefore, at the very least, you’ll need general liability insurance. In addition, you may need to provide insurance to fulfill contractual obligations such as subcontracting on a larger project or setting up a booth at an event.
Establish an online presence
In today’s world, nearly every business needs an online presence to be successful, especially when selling online. Therefore, take the time to set up a website and social media profiles to develop relationships with potential customers.
Determine how to accept credit card payments
If you plan to accept credit card payments, you are going to need a payment processor and a merchant account. Also, if you plan to take in-person payments, you’ll need a POS system as well.
Prepare to hire employees
You may not need employees immediately- or ever- but it’s still important to understand what you need to do to prepare to hire. You will need to consider things like payroll software, benefits, workers’ compensation, and more.
Once your business has been running for 6 to 12 months, you may qualify for various business loans. Financing can help with growth and expansion or get you through a slower season.
Are You Ready to Start a Business?
One of the most rewarding things you can do is start a business. However, it can also be the most frustrating because there is so much to do. If you keep these 15 steps in mind, the process should be easy. Contact Scarlan Capital Group to learn more about becoming a business owner.