6 Recommendations For Starting Your Own Business
Monday, February 18, 2013
Posted by: Martin Vivek
Are you thinking of starting your own business?
The idea of starting
your own business is an exciting proposition, but it can also pose many
challenges.Entrepreneurship requires hard work, planning, organization and dedication. You have to
be creative, independent, and willing to take risks. It also helps to
have a strong support system or a business mentor. A business mentor is someone experienced in running a business and can provide insight and guidance.
There are many aspects to starting a business and being well informed
will ensure that you are prepared to venture into entrepreneurship. The
more prepared and organized you are while starting your business the
more likely you are to be successful.
Here are some steps to take while
starting up your business.
Make a business plan
A business plan is an important roadmap for success. It typically
outlines the company’s plan to grow revenue and is usually in the form
of a three or five year plan. Making an executive summary provides a
picture of your business plan as a whole, your business profile and your
business goals. While making a business plan it is important to find
the best management and organizational structure for your business.
Another part of forming your business plan is deciding what your
business is all about. Decide what makes your business different and
what services or products will it provide.
Choose your business structure
Choosing the structure of your business will determine your legal and
tax responsibilities and implications. There are many different types
of business structures and it is important that you decide which
structure will work best for your business plan. Types of business
structures include sole proprietorships, limited liability company
(LLC), partnership, corporations, and S Corporations. The most common
form of business structure is sole proprietorship. Each structure has
unique advantages and disadvantages.
Choose and register your business
your business name is an important part of starting your business. Your
business name will provide your business with an identification. When
choosing what to name your business you should pick something unique.
You should also consider if the name is appealing to your target market.
After choosing the name of your business you need to check for any
existing trademarks on that name. If there is no current trademark on
the name then you should apply for trademark protection to prevent
trademark infringement. Next you should register for your "Doing
Business As” (DBA) name. This is the name you will use for your business
if you choose to name it anything besides your personal name.
Corporations, nonprofit organizations, LLCs, and partnerships also have
to register their business with their state government as well.
Finance your business
Knowing your financial needs and what options are available to you
can can improve your business success. It is important to estimate your
start up cost. Determine how much seed money you will need for initial
purchases and on going costs. This should include fixed expenses like
rent, insurance and utilities as well as variable expenses like
inventory, sales and shipping. A cash flow analysis will help you
maintain a proper balance coming in and going out of your business. Your
cash flow will effect how you run your everyday operations as well as
your eligibility for loans. Break even analysis will hlep you determine
when you will see profit. This can also help you determine whether or
not you will have to borrow money to further fund you business. When
planning out your finances you may want to explore your options for
loans and grants. The Small Business Administration (SBA) has a number
of loans designed to help small business. Many local banks and lending
institutions participate in SBA programs. There are also numerous state
and local agencies and nonprofit organizations that provide low interest
loans to small businesses. The federal government does not provided any
grants for starting or expanding business.
Filing and paying taxes
first thing to establish when figuring out the proper method for paying
taxes on your business is to determine whether it is a business or a
hobby. There are unique requirements and advantages to being a business
or a hobby. If it is decided that you have a business then you need to
obtain a federal business tax id. Then you need to find out what your
federal and state tax obligations are and when your tax year starts.
Choose location, equipment and hire employees
You need to find the right location for your business. This can be
determined by a number of factors, but you need to know your locations
zoning laws and regulations. Next you should determine what equipment
you may need to start your business and keep it running. Leasing
equipment is an option to consider. Purchasing government surplus is
also an option to consider because it is easy and affordable. Lastly you
will have to determine how many employees you will need to hire and
what their responsibilities and tasks will be. When this is decided you
will have to set up all the proper requirements to hire employees. Some
of these requirements include setting up records for withholding taxes
and obtaining worker’s compensation insurance.
Martin Vivek is outreach director at Factoring.net, which provides business financing. Factoring is not a loan; instead, it lets businesses sell
their current accounts receivable invoices and gives them a cash advance of 70-85% of the
purchase price of the accounts with payback of a low percentage of the