Are you considering starting a business? Before taking the first step, it’s important to carefully plan everything. Being well-prepared both on paper and mentally can help you avoid surprises once you enter the exciting world of entrepreneurship. Below is a list of topics that a beginner entrepreneur should have in mind when starting a new business:
Business Idea — Does my idea solve the problem?
If you’re thinking about starting your own business, you likely already have a business idea in mind. The most important thing is to clearly define the problem your idea solves and determine if there’s a large enough market for it. If you’re unable to conduct market research, try talking to potential customers to find out what challenges they’re facing and what needs they have. Ideally, you should test your idea with a Minimum Viable Product (MVP).
Business Plan — Planning and projections
No matter what type of business you’re planning to start, it’s crucial to carefully plan your business, outline its growth strategy, and prepare financial projections. If you don’t have experience creating a business plan, consider reaching out to a company that specializes in such services or using a free business plan template.
Company Name — Will they remember me?
You’ll need to register your business name in the state where you plan to operate and make sure it’s available and not already being used by someone else. You can use online databases or websites, such as the USPTO, to search for existing company names and trademarks. If you want to operate under a name other than your legal business name, you’ll need to file a DBA or fictitious name with your state.
Company Address — What about privacy?
Every business needs an address, but it doesn’t have to be a physical one. A virtual office is a modern service that provides full outsourcing of office services. The benefits are clear: you get an address (often in a prestigious location) for your office, while protecting your privacy (you don’t have to provide your personal address). Virtual office services often include postal services (sending business correspondence), fax and telephone services, and even the use of actual office space if needed.
Legal Forms and Tax ID — How to deal with taxes?
In the United States, there are several basic legal forms for companies, including sole proprietorship, partnership, corporation, S corporation, and limited liability company (LLC). The choice of legal form depends mainly on the type of business. You’ll also need to obtain federal and state tax IDs and an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) to pay federal taxes and hire employees. You can apply for an EIN online, by phone or by mail.
Licenses and Permits — Do I need them to start a business?
Depending on the type and location of your business, you may need to obtain various licenses and permits from federal, state, and local governments. These can include zoning permits, health permits, environmental permits, professional licenses, sales tax permits, and more. You can use online resources or contact your local chamber of commerce or small business administration office to find out what licenses and permits you need.
Considering taxes before starting a business is of utmost importance, as it directly impacts the financial feasibility and enduring success of your venture. Overlooking tax ramifications could result in unforeseen expenses, penalties, and legal entanglements. By taking a proactive approach to comprehend tax responsibilities, entrepreneurs can better strategize their budgets, opt for the most suitable business framework, and pinpoint tax benefits and deductions that alleviate the tax load. For instance, recognizing the prevailing Colorado sales tax rate becomes indispensable for businesses operating within the state, given its influence on pricing strategies and regulatory mandates.
Corporate Bank Account — Separate business and private finances
You’ll need to open a separate bank account for your business to keep your personal and business finances separate. Compare banks’ offers and choose one that offers low fees, high interest rates, online banking, and other services that meet your needs. You can also apply for a business credit card or low interest personal loans to help finance your start-up costs.
Accounting System — Finances under control
Choose an accounting system to track your income and expenses, prepare financial statements, and file taxes. You can use accounting software or hire an accountant to help with this task. Fortunately, there are many online accounting options available on the market.
Website and communication channels — Stay close to your customers
When starting a new business, be sure to think about creating a website that improves the credibility of your company. There are many online services that will allow you to create your image on the web. The website is the first point of contact with the customer. You can present additional information, services and goods as well as the advantages of cooperation. A website can also increase the chance of acquiring new leads. When your business starts to take off, it’s worth hiring a professional agency to create a real website. It’s also a good idea to support your website with social media.
Software — Run your business efficiently
When you start running a business, look for software that will be useful for customer relationship management (CRM), project and task management or for communication and business correspondence (email).
Starting a business can be an exciting and challenging journey. From coming up with a business idea that solves a problem, to creating a business plan with careful planning and projections, to choosing a memorable company name and address that protects your privacy, there are many things to think about. You’ll also need to deal with legal forms and taxes, obtain any necessary licenses and permits, open a corporate bank account, choose an accounting system, create a website and communication channels, and select the right software to run your business efficiently. While this list is not exhaustive, we hope it will help you gather the necessary material to avoid surprises once you are on board. Good luck on your entrepreneurial journey!