Smart Tips For Starting A New Business
The many details involved in getting a new business off the ground could scare off even the most committed and motivated entrepreneurs. If you're thinking about starting a new business, the California Society of CPAs (www.calcpa.org) provides the following list to help you begin the process.
Stick To What You Know and Love
Successful businesses don't just happen. They are made. Whether you plan to profit by "clowning around" at birthday parties or growing a multinational corporation, your success relies on your knowledge, passion and commitment. Evaluate your skills and interests and find a business that works for you.
Learn all the intrinsic details of the businesses that interest you. Use the Internet to research the industry. Investigate the competition. Subscribe to magazines that cover your field or trade (the cost may be tax deductible) and attend association meetings and local networking groups. Talk with business owners in similar fields. The more knowledgeable you are, the better your chance for success.
Choose An Organizational Structure
You'll need to decide whether to organize your business as a sole proprietorship, partnership, limited liability company or corporation. Each has its own advantages and disadvantages. Since your choice affects both your income taxes and personal liability, it is important that you learn as much as you can about each and seek professional advice before making a decision.
Name Your Business
This is not as easy as it may sound. It's often best to select a name that is short, easy to remember, descriptive of the type of business you're in, and likely to attract attention. Depending on your legal structure, you may have to register your business name with your local or county government. If a Web presence is important to your business, check to see if your desired domain name is available.
Make It Possible With A Business Plan
Think of a business plan as your blueprint for success. The process of developing a detailed and accurate business plan, however daunting, will help you think through important issues. A business plan should outline your strengths and weaknesses, and show where you are, where you want to go, and how you plan to get there. A typical plan includes an executive summary, a description of the business and its products or services, marketing strategy, operations plan, financial data and projections, management description, and market, competitive and risk analyses.
Find the Best Location
Location is often a critical factor in a business' success. Some local governments can provide information on traffic patterns for city and county roads. They also may have local population demographics. On your own, you can check area competitors and measure pedestrian traffic during business hours to estimate walk-in potential. Once you've settled on a location, decide whether to rent or own the building and then evaluate different sites.
Raising the money needed to start a new business is usually one of the most difficult steps. Financial resources available to small businesses can vary depending on whether you are starting a new business or purchasing an existing one. Generally speaking, business loans for start-up enterprises are not easily obtained. Many start-ups are financed by personal resources including savings, home-equity loans, and credit cards. Relatives and friends also may be potential sources of financing.
Make It Legal
Governments often require licenses and permits for conducting business. In some cases, it's as simple as paying for a license. In others, you may face the more difficult task of complying with regulatory ordinances that protect public health and safety and, increasingly, aesthetics.
Insure Your Business
Don't make the mistake of cutting corners by not insuring your new business venture. Look into a business owner's policy that includes, at the very least, property, liability, and business interruption coverage.
Plan To Work Extremely Hard
While many people start businesses in the hopes of not being tied down to a job, business owners find themselves working longer and harder than most employees, especially in the beginning.
Lean On the Experts
Many businesses make the mistake of turning to professionals only when they are in trouble. But professional advisors, particularly CPAs who specialize in small businesses, can provide valuable objective advice and add strength to your business.