There are many steps involved in starting a business between coming up with a great idea and operating a profitable company. From choosing and registering a name to obtaining startup financing and applying for licenses and permits, here is what you will need to know to get your business off the ground.
Choosing a Business Name
Deciding what to call your business is an important choice for any entrepreneur. An ideal business name will let your customers know what it is you do, will be memorable and will not be too similar to an already existing business. Once you have a few candidates in mind, you should check with your state to make sure the name isn’t already taken. If you plan for your business to have a web presence, you may also want to check out available domain names to make sure the one you want to use does not already belong to someone else.
First Steps to Start a Business
The type of business you decide to start should ideally mesh with the skills and experience you possess. Once you have decided on the kind of goods or services you want to provide, have selected a name for your company, and have decided on a corporate structure, you will need to register your business with your state. Your business will need a location such as a home office, a warehouse or a retail storefront. If any permits or licenses are required, you will need to apply for them and purchase any necessary insurance to make sure you are protected from liability. You will also need to purchase any inventory, equipment or supplies you need to get started.
Creating a Business Plan
A business plan typically outlines a company’s goals, sets forth how it will operate, and projects its income and cash flow. Having a business plan is important for your company for two reasons. First, it provides you with an opportunity to put down on paper what the goals, strategies and financial projections for your business are. Second, if you ever wish to apply for any type of business financing, your business plan will let lenders and potential investors know that you have thought your business through and that it has the potential to turn a profit.
Business Licenses and Permits
Depending on what kind of business you are starting and where it is located, you may need to obtain licenses and permits before you can start to conduct business. Nearly every business will require a local business license from its town or county. You may also need to obtain an employer tax identification number from both the federal and state governments. Some businesses such as auto repair shops and some professionals such as doctors require licenses to certify that they are qualified to do a particular job. If your business involves food service, you may need to obtain a permit from your local health department as well as any other specialty licenses such as a liquor license.
Modern technology has made it easier than ever to operate a business out of your own home. However, there are things you will need to take into consideration if you are starting a home-based business. Your local municipality may require a business license for your home business. Some areas may be zoned for residential use only, and therefore operating a business from your home may be restricted. You will want to check with your local government to see if you are permitted to operate a home business. Finally, you will want to investigate what insurance you should have for your home business because your homeowner’s policy will likely not cover losses related to your business.
Buying a Business
If you have the capital available, purchasing an existing business may be a smart way to go. In addition to investigating the laws in your state that govern the purchase of businesses, you will want to conduct a diligent review of the business’s financial records. Examining the company’s corporate documents, balance sheets, income and loss statements, and cash flow analyses can help you determine whether or not you are making a sound business investment.
Start Up Financing
Having sufficient financing in place is a key issue for any startup. Debt financing is available in the form of loans from private investors, banks and the Small Business Administration. Your local or state government may also offer financing options for small businesses. Many companies also look to investors to provide financing. Investors can be people like your friends and family, or they can be professional businesspeople looking for the right opportunity.Understanding what is involved in getting a new business up and running can help you be prepared for what lies ahead and set your company up for success.
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