How to Set Up a New Business

Save

It can be a long and winding road to opening the doors of a new business. Before you start down that path, map out the route, then buckle your seat belt. The ride may get bumpy, but the prize--a business you've created--will be well worth the pursuit.

Research the business concept to make sure it's viable. This is a crucial step and deserves a significant investment of your time. Assess whether there's a market for your product or service. Analyze whether the business concept addresses your lifestyle goals as well as your financial aspirations.

Evaluate the ease of entry into your selected market and the market's potential size. Will it support not only a fledgling business but also a growing one? Consulting with a business adviser in your field can be immensely helpful, but also expensive. Plan your questions ahead of time if he or she charges an hourly rate rather than a flat fee.

Seek startup information from the U.S. Small Business Administration (sba.gov) or counseling from a member of SCORE (Service Corps of Retired Executives; www.score.org) if your consulting budget is minimal.

Select an attorney and an accountant. With their advice, choose the appropriate legal structure for the business: a sole proprietorship, a general or limited partnership, a corporation, or a limited liability company or partnership. The structure determines many tax and liability factors.

Create a detailed timetable of actions to take during the months prior to your start date. Don't panic about the length of the list; just keep checking off each item as you complete it. See 3 Write an Effective To-Do List and 6 Meet Deadlines.

Obtain required federal, state and local licenses or permits and ID numbers. Most of these requirements and procedures are listed on Web sites dedicated to specific business types. One of your first applications should be for an EIN (Employer Identification Number) from the Internal Revenue Service.

Plan carefully for any environmental, health or safety issues that have an impact on your business. Inspections by the fire department and the board of health may be required.

Consult an intellectual property lawyer if your business involves technology products. Apply for any needed copyrights, patents or trademarks.

Begin recruiting employees. Remember, a great team brought on board at the beginning will simplify problem-solving later. Hire people for their skills, energy and attitude, not based on friendships or family ties. Outsource specialty services such as human resources and accounting until the business can afford full-time employees in these areas. See 212 Hire an Employee.

Come up with a great name for the business. Make it short, distinctive and easy to spell. Research your name thoroughly to make sure it's not in use before you register it. Some companies who feel others are infringing upon their name will send a ceaseand- desist order and even sue. Once you have the name, hire a graphic designer to create a logo, stationery and business cards.

Begin working on a business plan, including an analysis of the known competition. Take care that the plan doesn't depend on everything going right, since problems--even disasters--will arise. Make the plan flexible enough to survive them (see 203 Write a Business Plan).

Develop a marketing plan that honestly addresses market size and ease of entry (see 205 Create a Marketing Plan).

Secure financing. Beware of underestimating your short-term financial needs (see 209 Prepare a Pitch to a Venture Capitalist and 231 Organize a Loan Application). Once you've set up financing, open bank accounts, set up the payroll system (see 200 Decide on an Accounting System) and arrange insurance coverage.

Select a location. Schedule any needed improvements to the physical space. Arrange for service providers, including office maintenance, courier and shipping services, and security.

Purchase or lease office equipment and furnishings. If your budget is tight, investigate auctions of everything from used desks and computers to secondhand file cabinets and trash cans. You'll find such auctions listed in newspaper classified sections and on community Web sites.

Install communication facilities: phone and fax lines, as well as an Internet connection, Internet service provider and e-mail addresses. (See 199 Choose the Best Phone System.) Allocate funds for communication deposits, which can be hefty. Identify a firm to handle the design and construction of your company's Web site and obtain a domain name.

Line up suppliers and place initial orders.

Plan a promotional campaign. Join industry organizations and get out there and network. See 201 Make a Networking Plan.

Set an opening date. Be prepared for an immense commitment of time and energy--both physical and emotional--in the months ahead and a commensurate amount of satisfaction if all goes well.

Tips & Warnings

  • Enroll in a how-to workshop for entrepreneurs early in your startup schedule.
  • Keep a tight watch on costs during the startup phase. Early bookings may not support much overhead.
  • See 168 Open a Restaurant.
  • If you are purchasing real estate for the business (as opposed to leasing space), be sure to get an environmental inspection and certificate of compliance. The legal defense against civil and even criminal suits when sites are declared hazardous can be astronomically expensive, as can the cleanup process.

Related Searches

Promoted By Zergnet

Comments

You May Also Like

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!