How to start a businessDecember 15, 2015 6:55 pm Leave your thoughts
Part of the American dream is the the ability to start your own business. Each year hundreds of thousands of people take the leap and go into business for themselves. If you have what you think is a great idea that people will want, becoming an entrepreneur can be deeply satisfying—but also takes real work and legal diligence. With that in mind, here are the essential steps to starting your own business.
Build a Business Plan
You've got the big idea, the thing that will make your business unique. Now is the time to ask yourself the questions that will help you determine the next steps, questions like:
- Who will your customers be?
- What are you business goals?
- How do you plan to finance start up costs?
- How many employees will you need/what will your management structure be?
- How will you get your product or service out to your target audience?
If you have what you think is a great idea that people will want, becoming an entrepreneur can be deeply satisfying—but also takes real work and legal diligence.
Once you've answered these questions with a clear, actionable approach, you'll have a broader sense of how your business will be run, how you will overcome any potential difficulties, what you'll need to get started and what you need to sustain it. A guide to putting together a business plan can be found here.
Now that you've drawn up your business plan, it's time to decide on the legal structure of your business: Will your business be sole proprietorship, you doing-business-as (DBA) or a partnership with another entrepreneur? Would your business be better suited to being a corporation or—as is the case with most small businesses—a limited liability company (LLC)?
Liability protection is key for a budding business owner. You want to hope for the best, but in the event your business fails (as eight out of ten do within the first 18 months of operation), you want to ensure your personal assets are protected from being seized to pay for business debts. An LLC offers legal asset protection for your personal assets against business liabilities and debts while allowing for the tax benefits of a partnership.
Get Finances in Order
Most business require outside loans to assist with startup capital. Luckily, after you have formed an LLC, many banks and commercial lenders offer a variety of loans or credit accounts designed to help a business get off the ground.
The key is to not utilize your personal credit on business expenses. While it may be tempted to fund your business out of pocket, this exposes your personal assets to risk if the business fails. If offered business credit, carefully compare interest rates and financing terms—and make sure you do not use business funds to pay for personal expenses.
Register Your Business with the Government
After you have decided what kind of business you are forming, to become an officially recognized business entity, you must register with the Internal Revenue Service (IRS). This may require filing articles of incorporation, creating an LLC or registering and copyrighting your business name (often a DBA) with the government. You will also need to obtain a Employer Identification Number (EIN) from the IRS if you will be hiring employees.
One of the most important things you can do to help your business get off the ground is to find an attorney you trust. The business lawyers at The Law Offices of Donald W. Hudspeth, P.C. have extensive experience helping entrepreneurs in the formation of new businesses. Give us a call today to gets started.
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