The Steps in Starting a Service Business
Starting a service business is a way to take advantage of special skills that you have and turn them into profit. Before starting your service business, several important steps must be completed. Some businesses take longer to set up than others, but most service businesses must go through these basic steps.
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Set-up Business Entity
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Before you can start working, you may want to set up a business entity. For instance, you could set up an LLC, C corporation or S corporation. All of these entities will give you the benefit of limited liability. This means that if someone sues your business, you only risk losing your business assets. You can set up a business entity by paying a filing fee with the state in which you do business and then filling out a form.
Get Bonded
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In service businesses, it is often very important to get bonded, licensed and insured before doing any work for someone else. When you get bonded, it means that a bonding company keeps a certain amount of money that can be paid out to customers if a claim is filed against your work. If you do not complete a job to the appropriate standards, the bonding company will pay the customer a certain amount of money. Depending on what type of industry you are in, a bond might be required in your area.
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Licensed and Insured
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Depending on where you do business, you may also be required to be licensed. This may require you to take an exam and pay a fee to a local government. This helps prove to your customers that you are a legitimate business. You will also need to buy a business insurance policy to cover potential damages. If a customer is injured while you are working on a job, the liability component of your insurance will pay for the damages.
Equipment and Supplies
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When starting a service business, you could need to purchase some equipment. Most service businesses need some kind of equipment to start working. For example, if you are a plumber, you will need wrenches and other plumbing tools before you can begin work. Purchase the necessary tools and supplies that you will need to begin work. If you are short on cash, you may be able to find tools that you can rent or lease.
Getting Started
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You will also need to set up a business phone number and start marketing to your area. Customers need to know that you are in business and what you have to offer them. Depending on what type of business you have, you might need to secure a business location. In some cases, you can operate the business out of your home since you will be traveling to customers homes to perform the work.
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