How To Start a Small Business in 2020
WorldExecutivesDigest|Every great business starts with a unique idea. If you’ve already got the idea, you may think that the hard part is over. However, there’s a lot of complicated steps that need to be followed no matter what type of company you want to start. If you’re new to business, where should you begin?
A business plan maps the progress of your enterprise from start to finish, and it is what you will use when pitching your business to investors. It also allows you to organize all of the research that you will be doing on everything related to your business. You’ll need to have a comprehensive analysis of your place within the market, as well as startup costs, needs and potential investors. You should also have a section defining your business and explaining your strategy moving forward. Don’t forget to include a marketing plan and sales distribution effort. Lastly, write up an executive summary to be placed towards the beginning so readers can quickly understand the gist of your plan before getting into the details. If you can, it would be a nice touch to get it nicely printed and bound.
Before getting started, it’s important to choose what kind of business entity or tax designation you want to be, which usually comes down to choosing between an LLC vs S Corp. An LLC is a classic business entity which separates you, the owner, from the business. This is great for liability, tax and financial purposes. An LLC designates “members”, of which there can be one or many. Keep in mind that the number of members can change how you are taxed, which could be as a sole proprietorship or a partnership. An S Corp is not a business entity, but instead a tax designation in itself, which can save you money on obligations tied to your self-employment, like social security and healthcare.
As the saying goes, you have to spend money to make money. Not a lot of people have the cash in hand to cover startup costs for a small business, but there are lots of funding options out there. One of the most traditional ways is to go to the bank for a small business loan or credit card line of credit. Depending on the type of business, your location or your demographics, there are also small business grants available through the federal government. You can also seek outside help from investors or future customers, or trade your services for financial backing. These days, crowdfunding online is another viable way to raise money. There are also organizations made for specifically this reason called incubators, who will provide resources and seed funding to startups if they meet certain requirements.
There’s a lot of paperwork involved in getting your business up and running. One of the most important administrative tasks would be to sort out your business name. First you will need to check if your chosen name is already trademarked by someone else, so you will need to run a search through the trademark database. Once you are cleared, you can register and trademark your business name for yourself. Be sure to acquire all permits necessary for what your business does and all of your physical locations. Permits and licenses differ for each business, so don’t skimp on the research. It may be easiest to have a lawyer help you put all of this together. Now would also be a good time to get your accounting in order- choose your software, set your prices, set up your tax information or hire an accountant.
The startup process is a long and intensive one, and it will help to have a solid network of support behind you- whether it’s a partnership or your friends and family. Be ready to encounter lots of hiccups and obstacles, but don’t let that deter you from your end goal. No plan is perfect, so the best trait you can have is to be flexible.