Great business idea? Check. Ready to put in the time and energy necessary to own and operate a small business? Check. Prepared to take on what comes next? Um…half-check? You’ve got the passion, the drive, and the idea but aren’t sure what to do next before announcing that you’re officially in business.
The good news is that you’ve come to the right place. Here’s a look at five areas you’ll need to take care of for your small business before it gets up and running.
1. Create a business plan.
You may have an awesome idea, but it will be difficult to sustain in the long run if you don’t have a plan. Draft a business plan that evaluates the feasibility of your business as objectively and critically as possible. The document should open with an executive summary that covers who you are, what you do, how you’ll make money, and why consumers would be interested in what you have to offer them.
Great business plans cover the company’s goals and strategies for how you will reach them. Additional areas your business plan should take into consideration include:
- Industry analysis. This analyzes your competition and why consumers would choose your offerings over theirs.
- Market analysis. The individuals that exist in your target market, their demographics, and what they need.
- Organization and management. Information about the team members in your business and their backgrounds (if you have any employed).
- Financial projections. What the cash flow statement, projected profits and losses, and sales forecast look like for your business.
- Financing request. If you’re presenting your business plan to investors for additional capital, outline how much you need. Detail how the money will be spent as well.
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2. Incorporate or form an LLC.
I have spent years assisting entrepreneurs with incorporating or forming LLCs, and I do recommend legitimizing your company.
Incorporating designates your company as its own separate, legal entity. This allows you to protect your personal assets, so they are not responsible for any unforeseen circumstance that may impact your business. You may also save money on taxes and build credibility with consumers.
While I do have experience with incorporating small businesses, I am not a legal professional. I cannot tell you which entity type is the best fit for your company. If you aren’t sure which structure to incorporate as, consider consulting a legal professional for additional advice.
3. Cover your remaining legal bases.
Incorporating is just the start for keeping your small business in compliance! Here’s a quick checklist to run through to cover additional legal bases for your business.
- File for an Employer Identification Number (EIN) if you plan to hire employees or open up a business bank account.
- Register your trademark (for unique business names, logos, designs, and/or slogans) to protect your identity.
- If you decide to accept payments under an alternate business name, file for a Doing Business As name (DBA).
- Check in with the city, county and/or state you incorporated in to see which business licenses and/or permits your business may need.
4. Determine your location.
For some entrepreneurs, your business might be based from the comfort of your own home. However, if you plan to open up a brick and mortar storefront you’ll need to take a variety of aspects into consideration first.
The location of your business should be in a place where is established foot traffic in an area where your target market frequents. If you spot an empty storefront in the right location, meet with the landlord or owner of the space to walk through it, ask questions, and negotiate a lease if it turns out to be a fit for your business.
5. Get ready to hire.
If sales are trickling in or have been consistently coming through, it may be time to hire talent. Your industry and business type will dictate the amount of employees that you decide to hire, so keep that in mind from the start. You may not even hire full-time employees but instead bring on interns to help out at the beginning while your startup is getting settled.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.