You’re finally ready to start a business. Congratulations! Now, make sure your new venture is a success by following these 10 essential steps to starting a business.
- Write a business plan. If you’re hoping to get a business loan, investors or any other type of financing, you’ll need a business plan to convince people your idea is worth their money. However, even if you don’t need financing, you do need a business plan. Writing a business plan forces you to think through every step of starting your business, which improves your chances of success. Plus, writing a plan doesn’t have to be a hassle, thanks to business plan software that guides you through the process.
- Choose your business name and register your domain name. These days, you not only have to choose a business name, but also a domain name (that is, the URL for your business website). Do an Internet and trademark search to make sure no one else has your business name, and then do a domain name search to find out if your preferred domain name is available. Find out more about choosing a domain name.
- Choose your form of business. The form of business you choose — corporation, sole proprietorship, partnership, etc. — affects every other aspect of your business, including how much tax your business will pay and the types of investors you can get. If you do nothing, your business will be a sole proprietorship by default, but that’s not necessarily the best business structure for your needs. Find out more about choosing the best business structure.
- Get licenses and permits. Just about every business needs a license from state and/or local government. However, depending on your industry, you may need additional licenses and permits, such as a liquor license or a seller’s permit. Find out more about federal and state licenses and permits.
- Get a tax ID number and open a business bank account. It’s important to keep your business and personal finances separate for tax and legal reasons, so you should open a separate business bank account. The bank will ask for your tax ID or Employer Identification Number (EIN), required by the IRS for any business with employees. Apply for an EIN.
- Set up a website. Every small business needs a website — it’s the best way to let the world know you exist! Once you’ve registered your domain name, choose a web hosting company and start building your website. Make things easy by choosing a web host that can also design your website and help you with online marketing, so you can focus on running your business.
- Find your location. Depending on your industry, you may need to lease a commercial, retail or office space — or you might be able to start your business from home and save money on rent. Operating from home is a smart move for any online business, as long as you don’t have lots of inventory you need to store. However, be sure to check with your local zoning ordinances first: Some cities prohibit home-based businesses.
- Get equipped. Make a list of the business equipment and furnishings you need for your startup. Figure out where you need to spend more (like technology) and where you can save (like office furniture). You can often save money upfront by leasing equipment, especially if it’s something that becomes outdated quickly. You can also cut costs by buying used equipment and furnishings. Find used business equipment.
- Hire right. Before you open for business, you’ll need to hire the right people and make sure they’re well trained. Referrals from family, friends and coworkers can be a great way to find good employees, as can LinkedIn or other social networks. You can also contact local colleges and universities if you’re looking for entry-level employees, or trade and technical schools if you need employees with certain skills.
- Open for business, confident that you’ve done all you can to prepare your startup for success.
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