Whether you are just bringing your dream to life as a business, or are starting a small side venture as part of your existing network, starting a small business is easy, but a few steps must be followed to not only ensure your business’ success, but to also ensure that the legalities of your new corporation are in effect. This is something you can do by yourself, but if you are first starting out, it may be helpful to have a partner, or an attorney to help guide you through the process.
Creating a Business Plan
The first and most important thing to do is to create a business plan. Going forward without a plan could lead to near instant failure. The backbone of your plan should be the goal of keeping costs low, while making a profit. While this may sound like common sense, you need to be able to formulate a plan around this concept to make it happen. Clearly write out your company’s mission and vision. Do not try to be the next Google or Yahoo! Keep it simple, and write down what is important to you. Next, define your objectives along with strategies. This is the point at which it may be good to have a partner help you with some of the logistics. Lastly, add a subheading that includes your action plan in detail.
Opt for Free Help
Before you try to secure your first business loan, there is a lot of free help available that doesn’t come in the form of money, but can help you down the road. The Small Business Administration offers business assistance, along with training and counseling, to help get you started in the right direction. Starting a new business will take a lot of patience, and it’s best if you receive some guidance at the beginning.
Secure a Business Loan
Most business owners are going to need some help as they start their new business. It is best if you have some collateral to put down toward the loan, but it is not necessary in all cases, particularly if you have a cosigner. You will need to decide from which avenue you will be securing your loan. There are private and alternative lenders, and you can also secure loans from the Small Business Administration itself. You must also decide on the type of loan you are searching for. Do you need a short-term cash flow loan, just for a jump-start, or an unsecured business loan, or is a line of credit or account receivable financing better for you? It is a poor idea to use your personal credit card as a line of credit, even if you have a high credit limit and low APR. Keep your business and personal financial details separate.
You can start with a guide on how to get a business loan. This will help point you in the right direction on getting started.
Setting up the Legalities
You must decide on what type of business or corporation that you are planning to become. Choices range from a sole proprietorship to a Limited Liability Corporation (LLC), to a partnership. You can also register as a non-profit, cooperative, or S corporation, depending on the nature of your business. This will take some research on your end, and once you have decided, you must now register the business. This includes registering your new business name with your state government. Every state is different, so this may be a bit time-consuming without an attorney, but it can be done on your own.
Continuing with Legalities
Beyond deciding on the type of corporation and registering the name, the business must also be registered to pay state and local taxes. This is widely different on the state and local level, so check with your town and state government offices to find out exactly how to finish this process. You must also obtain licenses and permits at the federal, state, and local level. There are also resources within the Small Business Administration (SBA) to help you get through some of the tougher legal parts of setting up a first-time business.
Provided that you have a clear business plan and have secured a loan large enough to start your business, it is just a matter of setting up the legalities within your state and local level. Never be wary of reaching out to local and federal resources to help you get started. There are many online and in-person resources to help small businesses, and there is special help awarded to some businesses that qualify.