You have an idea. You believe your idea is marketable and you’ve decided to expand your idea into a business. Great! Here are 10 steps to help guide you through the planning, key financial decisions and legal activities you’ll need to negotiate to get your new venture off the ground.
Conduct market research.
Market research will help confirm your belief there is an opportunity to turn your idea into a successful business. It’s a way to gather information about potential customers and businesses already operating in your area. Use that information to find a competitive advantage for your business.
Write a business plan.
The foundation of your business, your business plan is a roadmap for how to structure, run and grow your new business. A good business plan will be a vital part of convincing people that working with you or investing in your company is a smart choice. Help in writing an effective business plan is available from the EDC-VC and other sources.
Funding your business.
Your business plan will help determine how much money you will need to start your business. If you don’t have that amount on hand, you will need to either raise or borrow the capital. The EDC-VC can guide you among the various sources of capital available.
Where to set up shop.
As the mantra goes, it’s, “Location, location, location.” Location is one of the most important decisions you’ll make, whether you’re setting up a brick-and-mortar business or launching an online store. Your choices could affect your taxes, legal requirements, and revenue.
Choose a business structure.
The legal structure you choose for your business will impact your business registration requirements, how much you pay in taxes, and your personal liability. Options include sole proprietorship, partnership, limited liability corporation (LLC), C Corporation, S Corporation and nonprofit organization, among others. You’ll need to choose a business structure before you register your business with the state. Consulting with business counselors, attorneys, and accountants can aid you in choosing the best structure for your enterprise.
Choose your business name.
Picking the perfect name is not easy, nor is it a simple matter. Your name should reflect your brand and capture your spirit. You will also want to make sure your business name isn’t already being used by someone else. Once you settle on a name, you need to protect it. There are four different ways to register your business name. Entity name protects you at the state level while trademark protects at a federal level. “Doing Business As,” or DBA, does not provide legal protection but may be legally required. Finally, registering your Internet domain name protects your business website address.
Register your business.
Once you’ve picked the perfect business name, it’s time to make it legal and protect your brand. If you’re doing business under a name different than your own, you’ll need to register with the federal government, and maybe your state government, too. For most small businesses, registering your business is as simple as registering your business name with state and local governments. In some cases, you don’t need to register at all. If you conduct business as yourself using your legal name, you won’t need to register anywhere.
Obtain federal and state tax IDs.
Most businesses don’t need to register with the federal government to become a legal entity; however, filing to get a federal tax ID is vital. You will use your employer identification number (EIN) for important steps to start and grow your business, like opening a bank account and paying taxes. It’s like a social security number for your business. Some — but not all — states require you to get a tax ID as well.
Apply for licenses and permits.
Keep your business running smoothly by staying legally compliant. The licenses and permits you need for your business will vary by industry, state, location, and other factors.
Open a business bank account.
A small business checking account can help you handle legal, tax, and day-to-day issues. The good news is it’s easy to set one up if you have the right registrations and paperwork ready.