Creating your own small business requires a certain entrepreneurial spirit and a willingness to take risks. To be successful, you need to research the industry your business will be part of and use the information to develop a business plan. Your plan should set forth the goals for your business and the steps you must take to get started.
Writing a Business Plan
Your business plan is your guide for transforming your business idea into reality. For a start-up business, the plan should identify the information and steps needed to begin operating your business lawfully, the costs you will incur before operations begin, and an understanding of how you expect your business to generate income. As your business progresses, you should update the business plan.
Market Analysis and Projected Financials
Starting your own small business is worthwhile only if it produces enough income to provide a profit for you. As part of your business plan, you need to perform a market analysis that includes such information as where you expect to find your customers and what kind of need there is for your products or services. Along with your market analysis, you should create financial projections showing the income and costs you anticipate for your business.
Determine the Legal Requirements
Every business, no matter how small, must comply with the certain legal requirements in order to operate lawfully. The local government where your business is located will usually require most businesses to apply for a business license and renew it yearly. Depending on your business activities, you may have to register with the state taxing authorities to collect sales tax or obtain a specialized license to handle certain products or provide services. If your business will hire employees, you will have to comply with state and federal labor laws regarding such matters as tax-withholding requirements, employee benefits, and lawful hiring practices.
Select a Legal Structure
Creating your small business will have tax and liability consequences for you personally. You must decide how you will structure your business to plan for these consequences. For example, you can generally choose to operate your business as a limited liability company, corporation, partnership or a sole proprietorship. Your choice of structure will be influenced by the unique facts of your business, such as the number of owners and how best to manage the business.
A Small Business Lawyer Can Help
Creating your own small business is complicated. Plus, the circumstances surrounding your small business are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact a small business lawyer.