“If you love what you do, you’ll never work a day in your life.” This quote is what makes many budding entrepreneurs take the plunge to open a new business. However, even the most passionate must complete numerous steps to become and stay viable in an ever changing market.
Start as a reporter
Begin by determining your market demographics by answering some basic questions to get your concept off the ground.
You have an idea of what type of business you want to start. Now find out what similar concepts are already available to perfect or why this idea hasn’t already taken flight.
Find your consumer base. Establish buyer demographics, including:
- Family makeup
You will then have approximate knowledge of consumer interest and what you can charge for your product or service.
Determine the best place to open up shop to reach the most people.
Know that your vision won’t take flight overnight. While you love your work, you can’t overlook some realities, including marketing and development. Don’t take forever completing these tasks.
Make a list of what you hope to accomplish by starting your own business.
Estimate how much you need to start your new business and where that money will come from. You can always take advice from professionals.
The most common income sources include:
- Using personal savings
Remember, it could be some time before your idea spins a profit.
Contrary to popular belief, filing a Certificate of Incorporation for your new company doesn’t offer personal liability protection. To do so, it’s best to structure your business. The way you choose to structure your company affects everything from how company taxes get filed to personal liability if something goes wrong. The most common structures are:
An S corporation is taxed as a partnership with under 100 shareholders. Individual shareholders cannot be used to satisfy business liabilities.
Companies structured as C corporations get taxed on earnings before dividends get distributed to shareholders. No individual associated with the company can be held responsible for the business’s legal obligations.
While owners get taxed personally for company profits and losses, they are not personally liable for any of the company’s debts or liabilities.
To further lessen the likelihood of personal or shareholder liability, practice the following procedures:
- All documents, including contracts and invoices, should have the entire company name, including “Inc.” or “Corp.”
- Use the name of the company and your title in your signature
- Follow bylaws and corporate formalities
- Keep all corporate funds, transactions, and taxes separate from individual shareholders, owners, or the Board of Directors
To go along with these filings, you also need:
- Federal Employer Identification Number (FEIN) from the IRS
- Company Bank Account
- Licenses and Permits
- Business insurance
Sales and marketing
Once you get through the initial planning stages, the next step is to get the message out. Target your ideal customer with a marketing plan that continually grows your clientele and gets the word out about your business. To do so:
- Keep on top of SEO (search engine optimization) fundamentals
- Promote your business on social media
- Issue press releases
- Continually network
- Have a unique, identifiable logo and use it consistently
Accounting and Bookkeeping
Even with proper planning, without adequate effort, you have a fifty-fifty chance of your business lasting more than five years. Beyond first year difficulties, competition, cash flow, and taxes threaten profitable companies. To combat these issues, establish an accounting system that automates the operational aspect of the business as much as possible. To do so, these procedures should include how to:
- Process orders
- Monitor accounts payable and receivable
- Pay employees
- Pay taxes
- Maintain permits
Having a process of systemization and organization from the beginning makes your company as efficient as possible and enables you to concentrate on growing your business. If you feel completely overwhelmed, a small business coach can help guide you through the process of starting a new company.