Becoming a small business entrepreneur could be both one of the most rewarding experiences in your life and one of the most challenging. Not only do you have to consider the industry you want to go into, but you also have to think about the type of business owner you’ll be and your business philosophy. With so many items to take care of, having a few tips is sure to come in handy.
Create a Business Plan
Before you start thinking of names for your business, locations or anything else, first sit down and craft a detailed business plan. Note the products or services you’d like to sell, how much you’d like to sell them for, and how much inventory you’ll need to get up and running. Additionally, you should also consider your target audience and how you plan on reaching them.
Take a look at the current market and how it’s expected to perform in the future. Just because you’re ready to launch your business doesn’t mean market conditions are in your favor. Something else you should include in your business plan is how your competitors are performing and what you can do to ensure you’re on a level playing field.
In regards to the financial aspect of your business plan, consider how much seed money your business will need, how much you’ll likely require for overhead costs and inventory, and how much profit you could make once you’ve started your business. While you’re at it, you can also start thinking about funding options.
The Legal Aspects
Entrepreneurs should also have a firm grasp of the different legal structures available to business owners. Such structures include:
- Sole proprietorship
- Limited Liability Company (LLC)
Each structure comes with unique advantages and disadvantages, so be sure to consider your options carefully. You might even want to consult with a business law expert for a professional opinion. While there’s an abundance of information available online, nothing beats the knowledge of an individual who is educated and experienced with the latest legal requirements and changes.
Gather Your Documents
You can expect loads of paperwork throughout the entirety of your business, so you might as well get used to it now. As for the documents you’ll need for the inception of your business, they include:
- A seller’s permit, if you plan on selling products
- A business license, which can be filed at your local tax collector’s office
- State and federal employer identification numbers for your employees, unless your business is a sole proprietorship that doesn’t have any employees
- Possibly a special permit, such as an environmental permit or vocational license, if your state law says your business needs one
Make an honest assessment of the risk of liability associated with your business. Here is another situation in which you could benefit from some professional assistance, such as from a business insurance expert or a business law attorney. Examples of common types of business insurance include malpractice coverage for physicians and liability insurance for accountants. Don’t make the mistake of opening your business before you’re properly insured.
Set Up a Bookkeeping Plan
Businesses great and small need solid bookkeeping plans. Efficiency helps avoid delays in bill collecting, paying off expenses and recordkeeping. While you can always use a computer program for your bookkeeping, you should also meet with a certified accountant a few times a year to ensure everything is in order and that you’re well prepared for the next tax season.
As you can see, there’s a lot to becoming a small business owner, even before you officially open. Take your time, get help when you need it, and be sure to consult experts when you feel you might require them.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.