Start Your Business in 5 Easy Steps

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Starting a business may be your first step on the road to success. If you have an idea and a passion, you're halfway there. The other half involves some logistical hurdles. But you don't have to overcome them alone. We're here to help.

Step 1 - Choose Your Business Type

 

The first step to starting your business is choosing what legal status it will have. Will it be a sole proprietorship, a partnership or a corporation? The type of business will affect your personal tax obligations and liability for debts and lawsuits. So choose wisely!

 

Sole Proprietorship

 

A sole proprietorship is a business in which the owner (yourself) is also the only employee. This means that you are personally responsible for any debts or other responsibilities incurred by your business. If your business fails or incurs debt, you alone are liable for it.

 

A sole proprietorship is easy to set up and requires no licensing or other formalities. There are also no limitations on the types of businesses you can run as a sole proprietor.

 

Partnership

 

A partnership is basically a group of individuals who form a business together. You can create a partnership with one or more individuals, but there must be at least two. A partnership is easy to set up and requires no licensing or formalities. However, the liability and other legal issues are much more complex in this type of business, so you may need the help of an attorney.

 

It's important to note that all partners are individually responsible for the debts of the business. This means that if one partner does something wrong, the others are responsible as well.

 

Corporation

 

A corporation is similar to a partnership in that multiple owners own the company together. However, in a corporation, the owners are not personally liable for the debts or actions of the business. This means that if your business falls on hard times and cannot pay its debts, you will not be personally liable. A corporation is a little more complicated to manage than a partnership and requires more paperwork and licensing. However, if you plan on running a large or complex business, it may be worth it to incorporate.

 

Step 2 - Secure Financing

A new business needs a bit of capital to get off the ground. To finance the start of your new business, you have several options. You may be eligible for a federal small business grant from the government. Consult the Chamber of Commerce website to find out more.

 

There are also many private lending institutions that can help out small businesses, such as Society One.

 

Step 3 - Set Up Your Business Entity

 

Once you've decided on what type of entity you will be using to start your business, it's time to set up your actual company. This step is also known as “forming” your company.

 

Setting up your business entity involves setting up your company as an LLC or corporation and obtaining your corporate identification number (EIN). This process varies slightly depending on which type of entity you choose. For example, LLCs have different requirements than corporations do in order to obtain an EIN.

 

Each state has its own requirements for setting up each type of entity as well. The IRS has information on how to set up your business entity on their website here . You can also consult with an attorney or tax professional that specializes in small businesses to assist you with starting your business.

 

Step 4 - Develop Your Business Plan

 

Now that you have set up your new business entity, it is essential that you develop a business plan for it. This plan will lay out your goals for your new company and will give you a clear picture of where you want to go with it. Having a solid plan will keep you motivated as you work towards opening day and beyond. Here are some topics that you should include when developing your business plan:

 

Your goals and why you want to start this business

 

How many products or services you will offer and why they are necessary/important

 

The target audience for each product or service and how you will market them

 

How much money it will take to get your company started and turn a profit (start-up costs, operating costs, etc.)

 

Your marketing strategy for promoting your products and services

 

What risks are involved with operating this type of business - for example, if you are selling food products, describe any potential health risks associated with your product or service. Also describe how you will mitigate these risks if possible (hygiene practices, proper storage procedures, safe food handling techniques).

What resources you have available Identify (including human resources) and how they could fit into your business plan

 

What your customers will think of you

 

What the impact will be on local communities

 

Will your business have any negative impacts on the environment or community?

 

Step 5 - Set Up Your Company Accounts

 

If you're planning to run a business, it's important to set up bank accounts for your company. This way, you'll have a safe place to store your income and keep track of your finances. It's also essential that you set up business credit cards to make purchases for your company.

 

There are many types of bank accounts that businesses use, depending on their needs and goals. However, there are a few things that should be included in all business bank accounts.

 

Business Checking Account

 

A business checking account is an account with a bank that allows you to deposit checks from customers or pay bills. This type of account is perfect for small businesses because it allows you to pay bills electronically without having to use physical checks.

 

Business Savings Account

 

A business savings account is similar to a checking account in that you can deposit funds into it and make withdrawals as needed. However, savings accounts are typically meant for long-term savings or investments.

Money Market Account (MMA)

 

A money market account is like a savings account in that it provides low-risk investment opportunities for businesses. MMAs are similar in structure to savings accounts in that they earn interest on deposits and allow withdrawals for emergencies.

 

Start Your Business

 

Congratulations! You have completed the first steps to starting your own business. Now it's time to get to work. You'll want to develop a logo and branding for your business. You will also want to create a website to market your products or services online. If you are opening an online business, you will need to set up an eCommerce website. Whatever type of business you decide to start, the most important thing is to get started.