So, you have decided to make the dream of owning your own business a reality. Congratulations! Being a business owner can be a great and rewarding endeavor. To build your business on solid ground, you will want to take care to do your research, check-off all of your to-do list items, and be sure to observe all of the red tape and formalities that lie in wait for you. Believe us, taking your time at the start of things to be sure you are forming your business on solid ground will be more than worth it as you watch your business thrive from here on out!
The Basics of Starting Your Own Business
Before getting into some of the finer points of starting your own business basics, it is worth mentioning that some entrepreneurs looking to start their own business often end up considering buying an existing business instead of starting a new business altogether. Buying an already existing business has many advantages as there is already the main business structure in place. You can also usually capitalize on goodwill and contacts the existing business has already built. If your business vision coincides with an already existing business, then you may want to considered buying and then building. Buying an existing business is, of course, a big purchase and has its own potential pitfalls that should be avoided. Investigate any prospective businesses with real care and always perform your due diligence.
If you want to build your own business from the ground up, then you are certainly going to want to work out the basics in your business plan. Your business plan includes the blueprint for a business. It should address things like what type of start-up capital you have and what you are going to need. If you need more, it should address how you are going to fill that gap in funds. It should also detail things like revenue streams and potential revenue streams. Finances are, of course, a big part of the business plan, but other things should be included in it as well. For instance, the plan should also include things such as where your business will be located and how day to day operations will look.
You will also need to determine your business ownership structure. This is a critical decision and will have lasting impacts for you and your business. Business ownership structures can vary greatly on things like personal liability exposure and taxation. Your selected structure will also impact the steps you need to take to set-up your business. A sole proprietorship, for example, has less formalities to observe than, say, setting up a corporation.
Depending on the business form you have selected, it is likely that you will need to register your business with federal and state tax authorities. If you plan on hiring employees, you will need a federal tax ID and, potentially, a state tax ID as well. You may need to register your business name with the appropriate government agency and there may also be state or federal government licenses you need to obtain.