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6 Recommendations For Starting Your Own Business

Monday, February 18, 2013   (0 Comments)
Posted by: Martin Vivek
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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

Choosing 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

The 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 invoice total.


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