Starting a Business
Starting a business can be a a real challenge. There are so many new skills you need to master and learn. First your need to look at a many business names and branding your business needs to succeed in this time of uncertain global financial status.
Every year, there are literally thousands of people who want to know how to start a business. The reasons for people wanting to start their own business's are varied but primarily the idea is to earn lots of money and to live a dream of being a business owner.
Entrepreneurship is a risk, and ironically, you have to be willing to lose some money to make some money. Apart from that there are attributes that are required for anyone who wishes to engage in business:
- Must be a self-starter
- Have a willingness to work hard
- Able to handle uncertainty
- Have self-discipline
- Passionate and enthusiastic
- Calculated risk taker
You need all these attributes to be an entrepreneur. Undeniably, starting a business is a very challenging task. For first-timers, it could be arduous, oftentimes frustrating, and very tricky. The burden becomes even greater when the new entrepreneur realizes that the procedures could be intricate and exhausting.
It is absolutely important therefore that you have sound planning, matched with a good measure of enthusiasm to complete the entire task. You need to be ready for the hard work. You should be determined to proceed no matter how difficult the task before you. You do not give up till you succeed.
Setbacks will be plenty along the way but the way you face them will determine your success in business. If you can’t seem to respond too well to obstacles, you should ask yourself if you are apt for business in the first place.
Firstly, there are a number of issues you need to think about before you set on the task:
- what will the business do?
- where can it operate?
- will I need premises?
- do I need people to make it happen, or will I be flying solo?
- can I fund the business myself, or do I need financial support?
- how long will it take to get the business into profit?
- have I got what it takes to make it work?
What follows is a comprehensive 10 STEP-PROCESS in starting any kind of business. It will present a fundamental reference to would-be-entrepreneurs.
STEP 1 RESEARCH AND PLAN YOUR BUSINESS
It is absolutely important that you prepare a well-written business plan which describes in detail your business’ mission and goals, and how these goals will be achieved. Likewise your business plan tells what your business will be, how you will get customers, how you will handle competition, and so on. You business plan will not only make sure you are on the right track but investors will want to determine from it whether your new business is worth their investment.
It is true that developing a business plan requires much time and attention but it is too valuable to be done without.
STEP 2 GET ASSISTANCE AND TRAINING
There are many training programs to help you get started and expand your business and you can avail most of them for free. These services cover all aspects needed to start and run your business.
Likewise, the internet can be a rich source in finding help and there are also in-person counseling and training services for business owners.
It is vital likewise that you have good advisers especially that you will be handling complex issues such as finances, tax and business law. An accountant or a lawyer could come in most usefully in these instances. A right-hand person can go through the details of your paperwork requirements.
STEP 3 CHOOSE A LOCATION
Finding the right location is crucial in ensuring profits and success. There are several basic considerations in selecting your business location. Some of these considerations are:
- Proximity to customers
- Ease of access
- Zoning policies and restrictions
- Security
- Possible future expansion
STEP 4 FINANCE YOUR BUSINESS
Whenever you plan to start a business, probably the primary issue you will have to tackle with will be about money. Foremost, you should be taking inventory of your financial resources as against your expected expenditures.
To calculate the amount of startup capital you might need, the formula is to determine pre-operational and monthly operational expenses.
Normally, to calculate your startup capital, you add pre-operational expenses and three month worth of estimated monthly expenses. Avoid starting a business if don’t have enough capital.
When you have determined how much startup capital you need, it’s time to plan how to acquire the money. You could use your savings, credit cards, retirement accounts, a second mortgage, an advance on an inheritance, friends and family assistance, or a combination of these.
The government offers a wide range of financing programs to help small business start and grow. These programs include low-interest loans, venture capital, and development grants. Try to be resourceful and seek all possible options so you can take the best financing plan.
STEP 5 DETERMINE THE LEGAL STRUCTURE
Decide what form of business entity you wish to establish as this will determine the amount of regulatory paperwork you’ll be filing, including your personal liability and the amount of taxes you will be paying. Below are some forms of business entities and their simple definitions:
- Sole Proprietorship – owned and managed by one person who is liable for all business debts and obligations.
- Partnership – single business owned by two or more individuals.
- Corporation – owned by shareholders.
- Limited Liability Company (LLC) – hybrid legal structure that provides the limited features of a corporation and the tax efficiencies and flexibility of partnership.
- Non-Profit – engaged in activities where making profit is not a primary mission.
- Cooperative – owned and operated for the benefit of those using its services.
STEP 6 REGISTER A BUSINESS NAME
Once you decided on step 5, you need to register your business and file certain documents with the government.
Your business’ legal name is required on all government forms and applications which includes your application for employer tax IDs, licenses and permits.
The legal name of a business is the name of person or entity owning a business. In sole proprietorship, its legal name is your full name. In partnerships, it is the name given in your partnership agreement or the last names of the partners. For LLCs and corporations, it is that name registered with the government.
STEP 7 GET A TAX IDENTIFICATION NUMBER
Understand that all businesses are legally required to pay taxes so it is necessary to acquire employer and tax identification numbers.
STEP 8 REGISTER FOR STATE AND LOCAL TAXES
In addition to business taxes required by the government, you will have to pay local taxes. Every locality has its own tax laws. Be sure you are informed of your tax obligations. The first thing you should never want is to run a business illegally.
STEP 9 OBTAIN BUSINESS LICENSE AND PERMIT
There are licensing and permitting regulations which vary from different localities. If you are unable to comply with them, you could pay heavy fines and face legal consequences.
STEP 10 LEARN THE LEGAL STEPS IN HIRING
It’s not just enough to find the right people. There are legal considerations that you need to take into account when hiring your business personnel. Check your federal and local regulations carefully to ensure that you comply with them.
It might take you months of research, preparation and hard work to finish the steps enumerated but you will be much rewarded when the day comes that you finally open your doors to customers and start making money.
ESSENTIAL INPUTS IN STARTING UP YOUR BUSINESS
MAINTAIN A GOOD PAPER TRAIL - from the very start, design a consistent and scalable filing system for all forms. Keep a solid paper trail with clients by having an actual file with hardcopies of proposals, contracts, invoices, time sheets, financial records, bank statements, receipts, and anything that is relevant to the file.
BE FLEXIBLE WITH PRICE CHARGES - proper pricing keeps the business alive. Don’t undercharge nor overcharge.
LEARN MARKETING – make sure your company’s name is in the marketplace even if it means you will be spending for publicity.
LEARN THE IMPORTANCE OF IMAGE - maintain that positive image in your customers’ eyes. Visual identity is critical. Use business cards, letterheads, envelopes, logos, etc. Also, don’t forget that you as business owner represent the image of your business. Learn to dress and behave appropriately. And lastly, make your office as welcoming as possible. If you entertain clients there, make them see cleanliness, neatness and hospitality.
As you go through the steps in starting your business, you need to keep your enthusiasm high. Prepare yourself for the long hours, hard work, and the incredibly frustrating and stressful times to come. But the reward of it all will be real and surprisingly worth every sacrifice you made.
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