Deciding to start your own business is a great step towards becoming an entrepreneur. While making the decision to do so may have been easy what follows tends to be more difficult. Following is a list of things you will want to think about when starting a business.
Creating a Business Plan
All businesses should draft and continually modify a business plan. The business plan should include, but not be limited to, the company objectives, mission statement, company history, ownership, locations, products and services, competitors, marketing strategy and pricing strategy. You should strive to run your company by this plan. However, if you are finding that you are not meeting your expected goals you should reevaluate the plan and modify it accordingly. Remember that the plan does not have to be elaborate in order to work for your business and can be summed up in as few as 3-4 pages. Having one and following it is the key.
Developing a Marketing Plan
Second in importance to your business plan is your marketing plan. Your marketing plan should include who your target market is, how you plan to reach that market and how you will differentiate yourself from your competition, within that market, in order to obtain and retain clients. The marketing plan should also entail marketing budget that will outline the costs of achieving your marketing goals. Remember, in order to make sure your marketing plan is working keep track of your return on investment. If you see that the marketing costs are higher than the returns it is time to make some changes to your plan.
The Business Location
Your business location will mainly depend on the activities of your company. Can your business be run from home? Is a store front required? Do you need access to customers or suppliers? The answers to these questions should be taken into consideration when determining your location. You will then need to consider the local zoning laws and whether any local permits or business licenses are needed to conduct business that that area.
Financing the Business
Many small business are self funded. However, you can seek out capital informally from relatives, friends or formally in the form of bank loans or venture capital. You should also consider looking at whether your business can apply for federal, state or local grants. Many government agencies offer financing programs to help small businesses start and expand their operations.
Determine Legal Structure Type (Corporation, LLC, Not-For-Profit)
You will need to decide what type of business entity to form for your new company. The entity type will determine how your company is structured and taxed. We suggest that you speak to your accountant to determine what business entity is best suited for your needs. If you know what type of entity you need to file you can click here to start the formation process.
Register Legal Structure
Once you determine the type of business entity that you need to register that structure with the respective government agency in your state. Businesses are generally registered with the Corporations Division of the Secretary of State. If you are ready to file your new business entity click here to start the formation process.
Register for Federal and State Taxes
After your company is registered you will need to obtain a Federal Tax Identification Number from the IRS. This number will identity your company to the IRS and when obtained will identify to them how your company will be taxed. You will also need to register with the Department of Taxation within the state where your business entity is registered. State tax obligations include income tax, employment tax, workers compensation and unemployment insurance.
Set up Bank Account
In order to conduct any business your company will need a bank account. Even if your company is inactive and will not conduct business for several years it will still need to make payments for annual report fees, accounting fees, etc. We suggest that businesses shop around for a bank that will satisfy the following needs: 1) local with easy access on a daily basis 2) provides online banking and 3) does not charge a monthly maintenance fee or waives the fee if a certain number of transactions are processed each month. When opening the account you will need your Federal Tax ID number, copies of your company formation documents and proper Identification.
Obtain Required Licenses and Permits
Most businesses will need to apply for business licenses and permits in order to legally conduct business. For example restaurants will need to apply for Food Establishment Licenses, Alcohol Beverage Licenses and Health Permits. These licenses are obtained from the Federal, State or Local governments. If you need assistance with determining what licenses and permits are required for your business please Contact us.
If you will have employees you will need to set up and keep accurate records of employment. You will be required to report Federal Income Tax Withholding, Federal Wage and Tax Statements and State Taxes. Further you will be required to verify employee eligibility, register with your states new hire reporting program, obtain workers compensation insurance, comply with posting requirements and pay the associated taxes. It is suggested that you retain the services of a payroll company to assist with these registrations and filings.
Further, you should think about what types of benefits you will be providing employees such as Health Insurance and 401k. You will need to register for and maintain these as well.
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