You’ve decided that now is the time. You’re ready to try it on your own and start your own business. Whether you’re going to work for yourself full time or to simply augment your income, there are some basic pointers to getting your new business off the ground.
Pick Your Focus
What type of product or service do you plan on offering? How do you plan on setting your business apart from the rest who are already in this space? Without research and careful thought, you run the risk of your business plan failing. Try to research and learn everything about the product and/or industry you plan on entering. Interview your perspective customers and find out steps you can take to make your business offering unique and attractive.
There are plenty of people to ask for advice. Start with colleagues, friends, and family. As another option, when I started my business, I utilized my local Community College’s Business Development Program. They house our local chapter of Service Corp of Retired Executives (SCORE) which is an organization of local and accomplished business leaders who can offer you advice on your business structure, business model, and anything else related to getting your business set up. They take a vow of non-competition, so you can feel comfortable talking in detail about your new venture.
Make it Legal
Registering your business with the state you live in is the next important step. This will reserve your business name and make it possible for you to do business in the state where you live. Choosing a business name is important. Where I live, Oregon’s Secretary of State serves as the registration body for businesses. Most states have a web tool allowing you to enter in a name to see whether it’s available or not. One important step: be sure to chose a business name that also coincides with a domain name you desire to register, if this is applicable to your situation.
Registering with the state will also require you designate what type of business you plan to have. There are many types including sole proprietorship, corporation, nonprofit, limited liability company, limited partnership, and more based on what state you live in. To make the call on which is most applicable to your business, see your CPA and/or lawyer for the best advice.
Finally, get an Employer Identification Number (also called a Tax ID) from the IRS. This will be required whenever you do business with another business and will enable you to avoid using your social security number. To apply for an EIN online fill out an SS-4 on the IRS‘ website.
Establish your Finances
Now that you have a bonafide business, it’s time to set up your finances. Keeping good records is very important. With your new business, valid business expenses can be a deductible expense. That is, if you have started a web design business, your new computer equipment can be figured in to your business’ start-up costs. Be sure to keep records on everything, in case of an audit.
Head down to your bank and set up a business bank account to keep your personal finances separate from your business finances. If you plan on doing a lot of purchasing, a business credit card may be in order as well.
Figure out your bookkeeping strategy by talking to a certified bookkeeper or CPA. Paying someone else to manage your books may not sound like a good thing, but it will free you up to do what you know best – making money for your new business.
There are many rules and regulations to establishing and running a successful business that vary from state to state. For authoritative advice, consult your CPA and/or lawyer.
(Photo credit: Flickr User mRk.Cool)
What pointers do existing small business owners have for the newbies? Weigh in via the comments.