Aspiring entrepreneurs all over the world are charting their courses to business ownership. This journey takes hard work, which is why many businesses fail. However, if your company survives the challenging first months, the rewards of entrepreneurship will outweigh the bad that comes with it.
Here are the steps that you should take when starting a business:
Each business is born from an idea. If you are passionate or knowledgeable about something, you should think about how you can fill a gap in the market. Where do your interests lie? You need to explore this if you want to be successful.
Once you narrow down your ideas, you should search for successful companies in that industry. What are the brand leaders in your future industry doing and how can you do it better? You need to deliver something that other companies are not delivering. You should not start a business just because you want to be an entrepreneur; you need a viable business model.
Build a business plan
Once you have your idea in place, you should ask yourself some pertinent questions: what is the purpose of your business? What are your end goals? How will you finance the business? Writing a business plan will help you to answer these questions adequately.
Business plans are useful for figuring out where your company is headed, how it plans to overcome difficulties, and how to sustain it.
Assess your finances
The cost of starting a business varies depending on the type of business that you want to start. For instance, if you want to buyback textbooks, you should consider the cost of building a website. Do you have the means to finance your startup business? If you want the business to be your fulltime job, make sure that you have enough money to sustain yourself before it takes off.
Although some entrepreneurs put their own money into their startups, you might need to borrow money to start yours. Getting a commercial loan from your bank is a good starting point, but such loans are hard to secure. If you cannot get a bank loan, you should consider applying for SBA loans.
Startups usually require the most money at the beginning, so you need to consider an investor.
When you get an investor to put some money into your business, he or she will expect to have a hands-on role in operating it. If you do not want to have a single investor, consider equity crowdfunding to raise smaller bits of cash from several backers.
Determine the legal business structure
Before registering your company, you should decide the type of entity that you want to own.
The structure of your business affects everything from your personal liability should something go wrong to how you file for taxes. If a business is yours alone and you will be responsible for the obligations as well as debts, you need to register for a sole proprietorship.
On the other hand, if you own a business with others, register as a partnership since you will all be personally liable. In the end, it is up to you to decide the type of business entity that you want to own.
Register with the IRS and government
If you want to be recognized officially as a business entity, you need to register with the government. You should register your business name, which can be a fictitious one or your legal name. If you want extra legal protection, you might want to trademark your business name.
Once you register your name, you need to obtain an Employer Identification number from the IRS.