What Is Needed to Start My Own Business?

Requirements for starting your own business vary, depending on your situation, your goals for the business and the locale and physical site of your operations. Basic requirements are the ability to work on your own without supervision and a written plan for marketing and operating your business. The primary requirement that cannot be overlooked is planning and preparation.

Considerations

When starting your own business, determine whether you are able to work independently. You must be self-disciplined to plan your time and meet your clients' requirements. You must also have a place for your own business, whether that is a home office, a storefront or other office or work site. You will need to be able to support yourself during the start-up period so another consideration will have to be your current financial situation. You may need to continue working while starting your business in order to pay your bills and start-up costs.

Types

There are four basic types of business entities: sole proprietorships, corporations, partnerships and limited liability companies. Each type of entity involves legal and accounting considerations. Determining which type is appropriate for your business depends on your financial situation, your exposure to liability, your tax situation, and whether you are going into business by yourself or with a partner or partners. Consult with your accountant and lawyer before starting your business so you have the information you need to determine your legal structure.

Benefits

The benefits of starting your own business include independence and self-sufficiency. You will be able to determine your own income and possibly, depending on the type of business you run, your own work hours. There are many tax benefits as well, as you can claim deductions for business expenses such as rent, office supplies and car usage.

Warning

According to the Small Business Administration (SBA), approximately half of all small business start-ups fail within five years or less. If you do not have self discipline and a written plan, you will be among those statistics. Financial stability to sustain your business and your personal situation must be established prior to starting your own business. Be prepared for your business not to show a profit for the first year or two.

Requirements

You will need a written marketing and business plan, appropriate licenses and name registrations, in addition to filing the paperwork for your business structure. You will also need to secure an Employer Identification Number (EIN) from the Internal Revenue Service even if you are a sole proprietor, to avoid having to use your personal Social Security Number. If you are running the business from your home office, you may need a permit from your local government. Check with your city, county, and state to determine their specific legal requirements.

Resources

• Small Business Administration