Article Rich Small Business What you should know before setting up a business

What you should know before setting up a business

Setting up a business of your own may be your dream, just like it is for many other people across the U.S.A. However, there are a few things that you need to know as you plan toward moving forward with your enterprise. Besides needing the adequate funding and support, as you plan to start your business, keep the following in mind: 

Decide what business suits you

Your business idea needs to be profitable, and will have a greater chance of succeeding if it suits your interests, natural abilities, and personal goals. These are all important contributing factors to the motivation required as you strive to get your business known and turn it into a profitable enterprise. 

Form a business plan

A good business plan is like having a goal post that you are kicking toward. It keeps you motivated and is an essential step before committing your time and money. 

Name your business

Look at the naming rules of your state, and then decide on a suitable brand name for your business. It needs to stand out from the competition and will attract customers. 

Preferably, the name you choose should also have an available URL. You should also plan how you are going to establish a successful web and social media presence. 

Develop the idea behind your product

Whether you are selling a product or service, you need to make sure that it solves a problem and sets it apart from the competition. Work on this idea. 

Understand your market and define your brand

You must think about your potential customers and how you can make them aware of your product and service. 

Define your brand by thinking of the core values that will drive your business. You want to make your brand compelling. 

Employees and professional relationships

Think about how many people you will need to help you with your business. Will you need employees, professional advisors, or a partnership?

Plan the finances

Most businesses need a bit of time before they start breaking even. If you don’t have the financial resources to help you until then, you will need to get financing. You will also need to look at what your fixed and variable expenses will be. This will give you an idea of what sales you must make to turn a profit. 

Plan how you will form your business

If you want to acquire increased credibility and to prevent your personal assets from liability, you need to consider registering your business as a legal entity. There are many business structures that you can choose from, but most small businesses opt for an LLC. Other popular choices are sole proprietorships, partnerships, corporations, and nonprofits. 

Tax registration

There are very few exceptions of businesses that don’t require an Employer Identification Number (EIN). The EIN will be used to open a bank account, hire employees, and to make federal tax filings. 

As you move toward starting your business, you will have to apply for the EIN and will also need to register for any applicable state taxes. Most states also have a sales tax and if you are planning to hire employees you will have to register for Unemployment Insurance Tax and employee withholding tax. 

Keep personal assets safe 

Keeping your personal assets separate from your business assets helps to protect you if your business is ever sued. It also makes it easier for you to do your accounting and tax filings once you get your business started. 

Therefore, open a business bank account and apply for a business credit card. A credit card will help you build credibility if you ever need to raise capital for your business at a later stage. 

Business permits and licenses 

Depending on the state you are planning to open your business in, and the type of business you will be starting, you need to find out what permits and licenses are required for compliance. Permits and licenses may be needed from all or just one of the federal, state, or local authorities. 

Other considerations

If you are good at accounting, you may want to consider which software system will work best for your business. These help to make annual tax filings so much easier.

 Also, consider what insurance your business will need. Most businesses get a general liability policy, and those with employees also get worker’s compensation insurance. If you are offering professional services, you may want to consider professional liability insurance. 

These may seem like a lot of steps that you need to plan. Luckily, there are a lot of online resources to help you plan and start your business idea.