What Steps Should I Take to Open My Own Business?

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When establishing your own business, there are many important steps that you will need to take. These steps help you stay compliant with various laws in the area. Additionally, they can help you start off in a positive manner.

Develop a Business Plan

A business plan establishes the concept for the business. It defines the business and the type of product or service that it will provide. It identifies the industry that the business will be in. It is important when constructing a business plan to think through various aspects of the business. The business plan may identify the target market. It could also identify main competitors and what will make the business differentiate itself from them. It may identify certain problems and provide solutions to these problems. It may discuss additional product lines that could complement the main offerings of the business. It can also establish information about the business’ brand and what message the business wants to convey.

A business plan usually consists of an executive summary, a company description, a market analysis, the structure of the business, a description of the service or product line, the marketing and sales strategy and financial projections. However, the business plan should not remain static. It should change and grow over time while serving as a guide to the business.

Gather Resources

You will likely need help launching your new business. It is important to identify the resources that you need and their potential costs. This list may include technological tools, office space, a warehouse and other needs. You may also want to undergo training about operating a business or take part in developmental courses.

Establish an Online Presence

Many companies primarily rely on their website when they are first starting out. This requires them to have an operable website by the time they launch. They may also choose to implement a blog to show their expertise in the area. Additionally, the business owner may want to establish a presence on various social media channels. These social media pages should be cohesive in nature. Social media can help provide a cohesive branding image as well by using the same color scheme, images and logos.

Secure Financing

If the business owner does not have sufficient funding to open the business, he or she may inquire as to possible financing options, such as taking on investors, getting a small business loan or other possibilities.

Decide the Business Structure

While many startup companies are sole proprietorships, there are disadvantages to using this default status. A business owner may consider entering into a business partnership, establishing the business as an LLC or forming a corporation. Having the business as a separate legal entity can reduce the business owner’s personal liability. Certain business forms can provide tax advantages.

Have a Business Finance in Place

Before the business starts using any money or taking in money from clients or customers, there should be a plan in place. An accounting program may help provide a foundation for future transactions. The owner may hire an outside bookkeeper. He or she may also inquire about retaining tax records in an efficient manner.

Acquire a Tax ID

If the business will hire employees, it will need a tax identification number, available from the IRS.

Learn about Taxes

A business owner may have a variety of tax responsibilities. He or she may be responsible for taking taxes out of employees’ pay and paying these taxes to the relevant taxing agency. He or she may also need to pay estimated taxes based on a percentage of profits. A tax lawyer may be retained to help explain these obligations. Business owners may also be required to register with tax authorities and submit taxes.

Apply for Necessary Permits and Licenses

Many states require businesses to have a permit in order to operate their business, even if the business is operated out of the business owner’s home. A professional license may also be required.

Register the Business Name

The business owner will also need to register the business’ name, often with the Secretary of State. The business owner may need to register the Doing Business As name.

Seek Legal Assistance

There are many requirements that business owners must meet in order to legally form and operate their business. Retaining a business lawyer early in the process can ensure that the business owner follows the relevant rules in order to avoid potential problems or consequences while protecting the business owner’s interests.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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