The amount of pre-operation resource investment – both time and money – can vary significantly depending on the product/service offered, number of investors and type of entity being formed. In any case, there are many steps common to any new business undertaking. Here’s a brief guide!
1. Choose a Company Name
Some considerations include the availability of 1) the company name for purposes of registration and 2) the corresponding website domain. In most states a search for name availability can be conducted on the Secretary of State’s website, and domain availability can generally be assessed through a simple Google search.
2. Determine Business Entity and File in State(s) of Choice
BizFilings offers a quick overview and comparison of business entity types, in general. Of course, one must consult the Secretary of State for state-specifics restrictions and filing requirements. Further, an Employer Identification Number (EIN) must be obtained from the IRS for a business that will notbe run as a sole proprietorship. A businesses established as a sole proprietorship is general operated under the owner’s Social Security Number.
3. Draft a Business Plan
There are many ways to structure a business plan, but the key components to any effective plan are convincing – yet realistic – presentations of business development and financial projections. SCORE generously provides a range of tools for business planning at any stage.
4. Build a Baseline Operating Budget
The SCORE template also include some very useful templates for laying out a business budget. As with other aspects of your business plan, it’s important to be thorough and realistic with respect to anticipated expenses. It’s generally okay to use an average for some expenses, but it should be revised regularly.
5. Open a Business Bank Account
Whether you need to process credit cards, checks or take out a line of credit, establishing a bank account for your business is necessary. Unless you’ve chosen to structure your business as a sole proprietorship, the bank is likely to require an EIN (see above) so be sure to complete that step in advance. In any case, the bank will require proof of your business entity, which is usually accomplished by producing a copy of the city registration or state filings.
6. Design Logo, Website & Stationery
For most, this is a fun step! More than that, it’s a chance to give you business façade texture and personality. Even if your business doesn’t sell a product or perform a service in the online realm, creating a web presence can be an inexpensive – yet effective – way to attract customers. The Website Wordsmith has compiled a list of useful and very user-friendly tools for business DIY’ers.
7. Design & Implement a Marketing Plan
Naturally, the particulars of this step vary by industry and target audience, but it’s important for any new business to set out a plan and stick to it. This isn’t to say that the plan can’t change. It will be necessary to make adjustments based on results and feedback, but paying a little extra attention to the effectiveness of your marketing strategy and sticking to a plan is an easy way to avoid often significant runaway costs of getting a small business up and running.
8. Obtain Insurance
Even if your industry doesn’t require the operator to maintain loss or liability insurance, doing so is generally low-cost and can provide significant peace of mind in addition to potential cost savings.
9. Plan for HR & Other Administrative Considerations
Always, always, always check your state’s requirements for occupational safety and health, as well as other human resources regulations. The requirements and restrictions on small businesses are generally quite low, but it’s always good to have these in mind as you grow.
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