Are YOU in it to Win it?
So you have a great idea for a business, but how do you turn that dream into a profitable business? Starting a business involves securing funding, creating a lucrative business plan, hiring employees and completing a series of legal activities that can be daunting. Luckily, the Small Business Administration lays out 10 easy steps to help you start a new business.
Create a Business Plan
While business plans will vary from business to business, a well-formed business plan will serve as a guide to help get your business up and running. According to the Small Business Administration, your plan will continually evolve and be influenced by factors such as the economy and sales growth. Most business plans consist of an executive summary, a description of the business, a marketing and distribution plan and financial and sales projections.
Get Business Assistance and Training
Don't start a business blindfolded. The SBA suggests finding classes or taking advantage of free mentoring programs that assist entrepreneurs secure financing, hire the right employees and expand their businesses.
Choose the Right Location
Choosing a customer-friendly location can be determined by a number of factors: Would your business function well online? Do you need a location with a lot of foot traffic? Different types of businesses will succeed in diverse locations, so it’s important to establish what kind of customer base you want. Before opening shop, make sure you’re in compliance with local zooming policies.
Finance Your Business
The financial crisis caused credit markets to freeze, and more than two years later they are still thawing, making it hard for aspiring entrepreneurs to access credit. If you don't have a bunch of cash saved up, get your business started with a little help. The SBA suggests finding government backed loans, venture capital and research grants.
Determine the Legal Structure of Your Business
Are you a sole proprietor? S Corporation? Establishing your form of business entity determines which income tax return form you have to file every year. Different filings bring different tax breaks and incentives, so be sure to do your homework to determine the best fit for your business goals.
Register a Business or 'DBA' Name
Picking a name may be a cinch, but you have to legally register it. Your registered name must appear on all government forms and applications, including licenses and permits. If you sell your products or open shop under a different name you must file under a 'fictitious name,' but states vary on this issue so be sure to check your state’s legal requirements.
Get a Tax Identification Number
There's no hiding from good old Uncle Sam, even when it comes to starting a business. All businesses must pay federal, state, and sometimes local taxes. Most businesses will need to register with the IRS as well as state and local revenue agencies to request a tax ID number or permit to determine what taxes you owe.
Register for State and Local Taxes
Each State and locality has its own tax laws. According to the Small Business Administration, the most common types of small business tax requirements are tax permits, income taxes and employment taxes.
Obtain Business Licenses and Permits
To operate legally, your business must be licensed. Depending on services provided, your business may need to be licensed at the federal, state, or local level.
Understand Employer Responsibilities
It's your responsibility to hire the right people to help expand your business. The Small Business Administration recommends learning the legal steps you need to take before and after hiring employees.
Check out the The Small Business Administration’s 10-point plan for starting a business.