Starting a business can be an exhilarating, exciting, and scary experience.
Most business owners know their craft, and the products and services that they sell, like the back of their hands. But, when it comes to the business side of things, the struggle begins. Oftentimes, business owners do not know what steps they need to take to get started. Well, no worries. This post highlights some of those important steps.
10 Tips for the Business Side of a Business:
Decide what legal structure you want your business to have. Legal structures include sole proprietorship, partnership, LLC, S-Corp, and C-Corp. All legal structures have both pros and cons depending on what your specific situation is. Contact your accountant or seek legal advice before deciding. Or, if you would prefer to research this yourself, there are many great resources online to help you determine which structure is best for you.
Tax Identification Numbers.
Apply for your Federal Tax ID Number online. The application is simple and it’s free. If you are selling taxable items in a state, then you must have a Sales Tax ID Number for that state as well. Go to the state’s website to see the specifics of its application process. Employer ID Numbers are necessary if you plan to have employees. This is the number you will use to pay the taxes withheld on their paychecks as well as your employer portion.
Decide the physical location of your business. If you need a physical location, will you rent a space or have an office in your home where you can meet clients? Create a budget to include your rent and factor that into the prices you set for your products and services. If in your home, dedicate a space for the office, preferably one with its own entrance that allows clients to enter and exit easily without them having to walk through your home. This allows you and your family more privacy. As well, you can use this dedicated space as a tax write off. Or is your business an online/virtual business? Will you meet clients in a free offsite location like a coffeehouse or library? If so, I suggest getting a PO Box for your mailing address and business cards. It is more professional and prevents potential clients from showing up to your home unexpectedly.
Naming your business is actually one of the first steps you will need for virtually all of the other steps. Pick a name that resonates with what you are offering. This name, in itself, brands your company. (Think Apple, Pepsi, McDonald’s; all of these have immediate brand recognition.) The name is very important, but don’t stress it.
Register your business with the state. Note that this state doesn’t have to be the same one you live in or one(s) you mainly do business in. For example, some people register their businesses in Las Vegas because of the favor small business receive in that state. Many times, however, business owners just register in the state that they live and do business in.
Obtain the necessary licenses and certifications, if needed, for you to do business. Some industries require these along with continuing education. Be sure to research and understand the rules and regulations of your industry.
Select who you need on your team to help you. This does not only include employees but also your vendors, accountant, lawyer, technology support, social media marketer, etc. The most successful people typically have a team of supporters.
Decide what technology, furniture, machinery, tools, supplies, etc. you need. Purchase only what is essential to start and then add to it as needed.
Talk with an insurance professional to see what insurance is needed and/or recommended. Businesses need general liability insurance. Other insurances are also available depending on the type of business. Do research on what insurance policies you might need.
Take Care of You.
This is a bonus and the most often overlooked step. Owning a business takes energy. Sometimes, oftentimes, A LOT of energy. But, it is worth it. So, it is essential to take care of you to have the proper energy to start, grow, and own your business without losing yourself in the process. Take time to nourish your mind, body, spirit, and relationships. Remember your business is how you make your money and do your work. It is NOT you. Its success or failure does not define who you are.
Enjoy starting your business and tackling the business side of things! May it be a blessing for you to live your best life!
– Dr. TJ