What You Need to Start Up a Business
Starting up a business is a frightening and exhilarating endeavor. Startup businesses are as different as the individuals who start them, but they have in common the fact that if they are built on strong fundamentals, they are more likely to succeed. Do your homework before starting your company in order to avoid costly and time-consuming backtracking later.
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Capital
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It costs money to start a business. In addition to the cost of materials, licensing, equipment and outfitting a space, your company will most likely operate at a loss while it is getting on its feet, requiring capital to keep it going in the short term and also to pay your personal expenses until you can draw a salary. Calculate how much money you anticipate needing until you break even, and develop a strategy to secure the necessary capital through bank or personal loans.
Business Plan
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Although nobody requires you to write a business plan before starting a business, the process of collecting your thoughts into a coherent document enhances your chances of success as your company evolves. Develop a marketing plan charting the ways you will create a demand for your product, and evaluate the features that will distinguish your offerings from those of the competition. Create a mission statement that will create focus for your business activities. Even if your business plan is not formal and you do not show it to anyone, the process of writing it will provide you with an opportunity to ask and answer important questions.
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Permits and Licenses
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Businesses require a range of permits and licenses, depending on where they operate and the nature of their goods and services. Research and apply for local and state business licenses, as well as specialized licenses that apply to your business activities such as a food handlers' permit for a restaurant or a refrigeration permit for a refrigeration company. If your business will be structured as an LLC, S corporation or C corporation, contact your state's secretary of state to learn about additional permits and licenses specific to your state.
Bookkeeping System
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In order to run your company effectively, you will need a bookkeeping system to track income and expenses. This will enable you to keep the information you need to file and pay taxes, and it will also give you ongoing feedback about your income and expenses. A business bookkeeping system can be an accounting pad with columns or a computer program, depending on the scale of your operations and your own bookkeeping savvy.
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References
Resources
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