Every journey starts with the first step, which everyone knows is the most difficult, but the most important as well. Starting a business is also a journey in itself. When you finally decide that you want to start an enterprise, you’re immediately confronted with a list of stuff that you must comply or invest in before you can even begin operating!
Starting a business can be very challenging, but it’s not impossible. You may think that finding an investor to fund your business is the most difficult part. However, it’s actually just one of many steps you need to follow to start your business.
Here are 10 of those steps as outlined by the Small Business Administration. Learn them, take them to heart and you’ll be on your way to achieving success and financial independence as a businessman.
Step 1 – Conduct Market Research
No one starts a business without researching the market. You need to be meticulous and determine how you can enter the market effectively. Market research allows you to look at what your prospective competitors are doing and what your potential customers are saying. This step helps you identify the unique selling point that will let you compete effectively in your niche.
Step 2 – Write a Business Plan
The business plan is a document that outlines your prospective company’s product or services, and how you plan to capture market share. It also serves as an introduction for your company – business plans will introduce the company’s board of directors, each member’s qualifications, and the company’s by-laws. This document is also important in securing financing for your start-up company.
Step 3 – Look for Financing to Fund Your Business
Feasibility studies and market research should have determined how much you and your partners will need to fund your startup. There are various sources to tap. You can self-finance by pooling together your resources to raise capital. You can then plug the gap in the capital by seeking external sources like angel investors, venture capitalists, lenders, and even crowd funders.
Step 4 – Establish Your Headquarters
You’ll need to pick your headquarters, or where your business will be based once it starts operation. The location you and your partners pick will have effects not only on your sales and visibility but also on tax reporting and your legal requirements. Take your time in this step. Real estate requires a lot of research.
Step 5 – Pick Your Business Structure
You’ll need to decide between the following options for registering your business:
- Sole proprietorship
- Limited liability company or LLC
Each structure has its own benefits and drawbacks, as well as specific regulatory requirements for your paperwork. Do your research or consult a corporate lawyer to fully learn about each option and how each can be a good fit for your new business.
Step 6 – Finalize Your Business Name
This part requires some creativity on your part. Aside from picking a unique name, you and your partners should come up with a name that accurately reflects your mission and vision as well as your niche. Avoid misleading names. Build a list of choices, and check with your jurisdiction’s relevant government agency to see which names are available for registration.
Step 7 – Secure Business Registration
Business registration seals your brand name and makes it unavailable for any other businessman to use. You’ll have to submit your business name to several government agencies, including the Internal Revenue Service, the US Patent and Trademark Office, and other relevant state agencies.
If your trademark application is approved, there will be a 30 day period where other individuals with interest can oppose it. This is called a trademark opposition period, and only after it expires will a trademark be approved.
Step 8 – Apply for State and Federal IDs
The Federal Tax ID is the Employer Identification Number or EID. The EID is a requisite when you’re paying federal taxes to the IRS. You also need it to open a corporate bank account, and for the next step, which is to apply for permits and licenses. As for the State ID, you’ll need to check with your state government if your business needs to pay state taxes.
Step 9 – Secure the Requisite Permits and Licenses
This is the final step in creating your business as an entity. With your permits and licenses, you’re officially able to launch your company and start operating. Check with state and federal government agencies on the exact list of requirements you need to comply with. Requirements vary by state, niche, industry, and other considerations.
Step 10 – Open a Bank Account
Don’t operate without ever opening a bank account for your business. There are several perks to having a business bank account. First, this account streamlines your finances by separating personal cash from the business’ money. It also gives the business a professional image. Lastly, having a bank account gives you access to lines of credit from your issuer and boosts your purchasing power.
Starting a business requires an organized approach. Being organized saves you a lot of time and money, as well as removing a lot of stress. All you and your partners have to do is to follow all of these 10 steps in exactly the right order and you’ll be launching your company in no time. Good luck, and may your business flourish.