STEP 1 Business Ideas
To start a business you will need to choose or create a business idea. While this is an obvious step many people who want their own business don’t have an idea, just the desire to be an entrepreneur. For the budding entrepreneur, there are many options; buying a franchise or an existing business, or looking to others for ideas for a start-up business. Once you have decided on the business you wish to start, then the real work begins.
STEP 2 Business Plan
Writing a business plan is your next and most important step, this is how you and others will evaluate your business. When seeking financing the investors or lenders will want to read your plan before they supply you with funding. If you’re financing the business yourself, you will still want to have a written plan to develop business strategies and financial projections. A key element within the business plan is the marketing plan, which explains marketing strategies that will be used to advertise and promote the products or services. The goal setting steps of the plan will help you to analyze the success of the business in future years and clearly illustrate the capital needed to operate the company to break-even.
STEP 3 Financing
With your business plan in hand, you are ready to go find yourself some capital. Most small businesses have three options for financing: friends & family, investors or bank loans. Each of these options has different considerations for the business. Investors and even friends & family usually want ownership and control of their portion of the business. Bank loans burden the business with an additional expense of the loan payment, which can erode the business profits.
STEP 4 Getting started
You’ve got the plan, the money and the enthusiasm; you’re ready, right? Not yet, as with everything you need to take the legal issues into consideration. First you should choose a legal structure: Sole Proprietorship, Partnership, or Corporation. Your financing decisions will have an effect on what legal structure you choose. Now you can file with the state to incorporate and obtain a federal Identification number.
STEP 5 Opening the Doors
Okay, it’s time to get on the road to making some money; this of course means spending money. Where are you going to run your business? Will a home office do or is commercial space needed to service your customers? Do you need to hire employees to help you run the business? What are your bookkeeping needs, do you need an accountant? Finally, who could forget taxes, what taxes do you have to pay and collect? Now that your business is through the start-up phase, you can now look forward to the issues of managing a small business.
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