The epIQ Guide To Starting a Business
Starting a business can be your ticket to financial independence, but it isn’t always easy. You need to have a great idea, the drive to see it through, and the ability to execute your plans flawlessly.
Nonetheless, it will require hard work and determination. The following is a guide on how to start a business, from coming up with a great idea to getting your first customers.
How To Start a Business in 7 Steps
Here are the steps to get you started on the path to entrepreneurship:
1. Evaluate Your Idea
Research your business idea and make sure it’s feasible and has a potential market.
Before you do anything else, you need to make sure your business idea is worth pursuing. To do that, ask yourself the following questions:
- Will my product or service solve a problem?
- Is there a demand for my product or service?
- Can I reach my target market?
- Is there competition in this space?
- Can I realistically turn a profit with this business?
If you can answer “yes” to all of these questions, then you have a strong business idea on your hands. If not, it’s time to go back to the drawing board.
2. Develop a Business Plan
A business plan will outline all of your business goals, the strategies you’ll use, and how you plan on achieving all of this. It will also include a competitive analysis of your industry and market research to ensure that your business has a chance to be successful. This will be your roadmap and will help you secure funding, if needed.
It should be comprehensive enough to cover all aspects of your business, but not so long that it becomes cumbersome. You can always revise and update your business plan as your business grows and changes.
3. Choose a Business Structure
A business structure is a legal designation that affects many important factors, such as how you file taxes, your personal liability, and the level of paperwork required to get started. Selecting the right business structure is a critical step in starting a new business.
There are four common business structures in the United States, each with its own set of pros and cons:
Sole Proprietorship
A sole proprietorship is the most common type of business structure. This type of business is owned and operated by one person with no formal legal entity. The owner of a sole proprietorship has complete control over the business and all profits and losses generated from it.
Its primary benefit is that it is the easiest and cheapest business structure to set up. There are no complex legal requirements or filing fees associated with a sole proprietorship. Additionally, the owner of a sole proprietorship can make all decisions regarding the business without having to consult with anyone else.
However, there are some downsides to consider as well. Because the business is not a separate legal entity from the owner, the owner is personally liable for all debts and losses incurred by the business. This means that if the business is sued or cannot pay its debts, the owner’s personal assets could be at risk.
Additionally, because there is only one owner, it can be difficult to raise capital for a sole proprietorship. Investors may be hesitant to invest in a business that is not a separate legal entity from its owner.
Partnership
A partnership is another business structure to consider. This is a useful setup for two or more people who want to go into business together. Partnerships can be either general or limited partnerships.
In a general partnership, each partner is involved in the day-to-day running of the business and is jointly liable for any debts the business incurs. A limited partnership has both general and limited partners. The general partners are liable for the debts of the business, while the limited partners’ liability is limited to the amount of money they’ve invested in the business.
Corporation
Incorporating your business has a number of advantages and disadvantages. Some pros include personal asset protection, increased credibility, tax benefits, and continued existence even if its owners die or leave the business.
However, you’ll have to comply with more paperwork and regulatory requirements. You’ll need to file articles of incorporation with the state, hold shareholder meetings, and keep minutes of those meetings. You may also be required to file annual reports and maintain corporate records.
There’s also the disadvantage of double taxation since corporations are taxed on their profits, and then shareholders are taxed again when they receive dividends.
Limited Liability Company (LLC)
A limited liability company (LLC) is a popular choice for small businesses because it offers personal asset protection for the owners, flexible taxation, and easy setup.
Of course, it still has its share of cons. An LLC is more expensive and time-consuming to set up. You may also be required to pay annual fees. Some states require LLCs to pay annual fees, even if the LLC doesn’t have any income.
4. Register Your Business With the Government
The next step is registering your company with the government. This can be done online, by mail, or in person at your local Small Business Administration (SBA) office. The SBA can help you with this process and will also provide you with resources and assistance as you get started.
You have to obtain any necessary licenses or permits to build or operate your business. Depending on your business, these could include a business license, a food service license, or a permit to operate a home-based business. It can also lend credibility to your brand and help you build customer trust.
5. Set Up Your Business
These days, you can opt to forgo setting up an office for your business. You can work from home, or even from a co-working space. Nonetheless, you have to plan and set up your business carefully before you start working on it.
If you’re planning to have an e-commerce site, you should set up your website and social media platforms before anything else. It’s also important to set up a system for tracking your inventory, customers, and finances. There are many software programs that can help you with this, so do some research to find the one that best suits your needs.
6. Hire Employees
The most important thing when hiring employees is to make sure that they are qualified for the position and that they will be a good fit for your company. To find qualified employees, you can post job ads online or in newspapers. You can also use recruitment agencies to help you find the right candidates.
7. Promote Your Business
Lastly, get the word out there about what you’re offering. You can do this through online channels such as social media, your website, or email marketing. You can also promote your business offline by handing out flyers or connecting with local businesses that might be able to promote your products or services.
Takeaway
Starting a business can be daunting, but with the right planning and execution it can also be very rewarding. Do your research and put together a solid business plan before you take the plunge.
References:
https://www.businessnewsdaily.com/4686-how-to-start-a-business.html
https://www.nerdwallet.com/article/small-business/how-to-start-a-business
https://www.sba.gov/business-guide/10-steps-start-your-business
https://www.shopify.com/blog/how-to-start-a-business
https://blog.hubspot.com/sales/how-to-start-a-business
https://www.irs.gov/businesses/small-businesses-self-employed/business-structures
https://www.sba.gov/business-guide/launch-your-business/choose-business-structure
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