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March 3, 2015

10 Steps to Starting a Business

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Starting a new business is exciting. You are taking on a huge responsibility, putting your life’s savings into it, possibly your personal assets will be on the line. You cannot just jump into business ownership without being prepared. You must begin planning, be prepared to make serious financial decisions, and complete all legal requirements to begin operating your business. Here are 10 steps to help you get started.

1) Create a Business Plan

When starting a business, it is important to put together a business plan. This will help you map out start-up expenses, what is needed to allow your business to operate without any major problems, and to start the process for when it is time to apply for financing. Lenders want to know what your business is all about and how you plan to turn it into a success.

2) Business Advice and Training

You need to be prepared for business ownership. Advice from other business owners and other professionals in the industry is key. Turning to organizations that offer assistance and training will add to your ability to start a successful small business with confidence.

3) Choose Your Businesses Location

Location can make or break your business. If your business requires strong foot traffic for sales it is important to find a location in a popular area. For businesses with online sales, manufacturing and so on, your location can be in a more discreet area which will save you in capital for rent or purchase costs. Be sure when choosing a location your business is able to comply with all zoning laws.

 4) Choose a Legal Structure for Your Business

The type of legal structure you choose for your business will depend on the type of business you are opening and the liability you choose to assume for the business. Legal structure options for businesses include; sole proprietorship, partnership, Limited Liability Company (LLC), corporation, S corporation, non-profit or co-operative.

5) Register Your Business Name

You must register your business name, “Doing business as” within your state government office.

6) Get Your Tax Identification Number

Apply for your businesses tax identification number through the IRS and your state revenue agency.

7) Register for State Taxes

Each state has its own tax requirements. When registering your business name, your new business should be issued an identification number for state taxes. If you did not receive this number you must register to ensure you pay the appropriate taxes.

8) Apply for Business Licenses and Permits

Depending on the type of business you will be operating, you will need business licenses and permits. Look up lists of federal, state and local licenses and permits required for your business, and then apply for the ones required for your business to operate legally.

9) Financing Your Business

For a start-up business, the best option for financing is a government-backed loan. Lenders that offer SBA start up loans will assist you in the financing process. Be prepared to use your personal saving, personal collateral and for your credit to be under careful observation to ensure you are a low-risk for lending.

10) Insurance

It is important to protect your personal assets along with your businesses. Once your business is prepared to begin operations, you must look into insurance options for financial protection.

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