At some point in your life, you’ve probably had a brilliant idea about starting a business. You shared it with friends and family, smiled and remarked how perfect it would be if “that” existed or how great it would be to work for yourself. The next morning, you woke up, battled your commute, and wondered, “What’s stopping me?”
Seeing an idea through to fruition isn’t easy. Starting a business can seem complicated, overwhelming, and time consuming. Imagine all of the brilliant business ideas that haven’t been introduced to the world yet simply because people have no idea where to begin. We can help.
You can start a business by taking these 6 steps. Each one gets you a little bit closer to realizing your dream. Stop daydreaming and bring your brilliant idea to life:
Step 1: Create a Business Plan
It’s crucial you have a keen understanding of your market, and be prepared to articulate what sets your products and services apart from others. In any industry, it’s not important to be first, but it is important to offer value that differentiates you and draws customers in.
Look into the many elements of what makes a complete business plan and leave no stone unturned. Visit the Small Business Administration site for guidelines or templates and speak with mentors through SCORE to get feedback on your first few drafts.
Step 2: Seek Assistance and Training
Both the Small Business Administration and SCORE offer counseling and training, which include free online courses where you can go at your own pace, as well as local workshops. Seek out classes or assistance in areas where you may fall short as a small business owner. This can include management, sales, marketing, legal, budgeting and more.
Step 3: Get Funding
If you’re not able to fund your own small business idea, particularly if you want to launch a product, research the options that best suit your endeavor. Your first thought might be to secure a small bank loan or line of credit. Research the websites of major banks or local lenders, and speak with a representative to uncover what an ideal business loan application looks like.
Alternatively, you may want to try to get in front of venture capitalists if you feel your idea has the potential to make a lot of money, be sold to a larger company, or one day go public. Unlike a loan, which has payment terms and a set payback date, VCs measure their returns as a function of the company’s future performance. You can partner with active investors, who expect to play a significant role in the direction and function of your company, or passive investors, who give you the initial funds to create your idea, but allow you to run with your idea.
Step 4: Determine Your Legal Structure
There are a few housekeeping items that you have to take care of in order to establish your business with the government and structure it for future growth.
Step 4a: Access the proper filing forms through the IRS or refer to your state’s website to find out the exact process of filing your business entity. You should find this information under your county clerk’s office or state government website.
Step 4b: Register your company name (often called a “Doing Business As” name) if your company name is different than your own personal name. Each state has different requirements; visit the Registering Your Doing Business As Name guide to see if you need to take this step.
Step 4c: Get an EIN. One must be secured in order to do things like open a bank account, apply for business licenses, and file your tax returns. You can apply for an EIN for free online through the IRS website.
Step 4d: Familiarize yourself with your state’s Tax obligations. You’ll need this information in order to collect sales tax from customers, pay income tax, and understand employment taxes.
Step 5: Licenses & Permits
Depending on the industry and location you are launching your business, you may need to be licensed at a federal or state level. If you’re getting involved in a heavily regulated industry — such as alcohol, agriculture, or transportation — you’ll likely need federal licenses to conduct business anywhere. Review the SBA’s licensing database to find out what licenses and permits apply to you.
Step 6: Get Help
When it comes to starting a business, if you can’t do something or can’t do it well, you’re wasting time. The most successful small business owners don’t try to do everything themselves – it’s unwise. Starting a business requires many different skills, and most people don’t excel at all of them. If you’re not excelling after going through training as described above, or cannot find the time to complete certain necessary tasks, hire someone to compliment the skills you bring to the table. Building a business will require that you rely on a stable of experts to get you where you need to be – this board of individuals might include a lawyer, tax accountant, finance and accounting professional, web designer, marketing specialist, or virtual assistant. These people will likely be independent contractors or vendor partnerships, but some could be in-house employees as well.
Learn more about starting a small business at business.com.
What other steps might you take to bring your big business idea to life?
Photo source: beginnersinvest.about.com, intuit.com