Are You Thinking of Starting a Business? A Basic Entrepreneur’s Guide to Starting a Small Business

According to the Small Business Administration (SBA), over 27 million small businesses in the United States employ roughly half of all US workers, and account for approximately 65 percent of the jobs that were created between 1993 and 2009. For many who have lost jobs, especially after a number of years in traditional business settings, starting a business is an increasingly viable option. Whether starting a consulting practice or a bricks-and-mortar business, buying an existing business or a franchise, a rigorous process should be adopted from the outset. Typical steps to starting a business include consideration of the following: 

 

  1. Feasibility of the Business
    1. Demand: Evaluate your business idea to identify if there is a real need. Conduct market research and a competitive analysis. Define/identify your customers and market segment.
    2. Financing: How do you plan to finance the business?  Will you need external financing to fund a start-up or acquisition? Do you have “angel investors” in mind?
    3. Qualifications: Read 7 Traits of Successful Entrepreneurs to clarify whether you have what it takes to become a successful entrepreneur. Do you have the necessary traits, skills, and qualifications to operate a business? Seek out assistance, counseling and mentoring from such organizations as the localSmall Business Administration office and SCORE (Service Corps of Retired Executives). The SBA also operates local Small Business Development Centersthat assist entrepreneurs with “financial, marketing, production, organization, engineering, and technical problems and feasibility studies.”
  2. Write a Business Plan: To get your business started, you’ll need a road map to   guide the process. A business plan provides the entrepreneur with a set of steps and sequences to follow, along with specific direction in regard to finances and budgeting.
  3. Structure of the Business:  There are a range of business entities available to new businesses: should yours be a partnership, Limited Liability Company (LLC), corporation, S corporation, C Corporation, or non-profit? There are a range of tax and legal liability considerations tied to this decision, and professional help may be warranted to choose among these options.
  4. Name and Register the Organization: Before registering the business, conduct a check to determine if the name you have chosen is available. Then register the name/entity with your state/provincial government.
  5. Set-up a Website: Secure a domain name for your business, then create a website. You can do it on your own, using services such as GoDaddy.com andWordPress.com, or you can hire someone to do this work for you.
  6. Taxes: Secure a Tax Identification Number. Depending on the nature of your business, you may also need to obtain workers’ compensation, unemployment and disability insurance coverage as well.  
  7. Permits and Licenses: Will you require business permits and licenses? Check with the appropriate agencies at the federal, state and city government level.

 

Exploring an entrepreneurial path requires a significant level of planning from the outset. Addressing the issues above will certainly help assure the business’ success.

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