Step 1: Decide the Location of Your Business
The first step in successfully opening your business is making a few key decisions that will guide the rest of the initial set up process.
Location: Online, Home-based, or Brick and Mortar
Deciding where you’ll do business from has a ripple effect on future business decisions. Here are a few considerations for each scenario.
If you choose to run your business entirely online, there’s large up-front cost savings, as well as more flexibility as a business owner. However, you should think carefully about if online works most effectively for your business model. Unless you’re a professional web designer, consider hiring someone to optimize the look, SEO, and user experience of your site.
If you run your business from home, consider if you can accommodate meeting clients there. Also, keep in mind that depending on your type of business, you may need additional licenses. For example, there are strict regulations for food-based businesses run from a residential property.
Brick and Mortar
Opening a brick and mortar business is likely the most expensive option. But brick and mortar locations are great for brand building, connecting with customers, and becoming a part of the local business community. If a brick and mortar location is a part of your plan, start early, so you have time for all of the following additional steps:
- Finding the right real estate.
- Deciding to rent or buy.
- Completing a build-out if necessary.
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Decide on the Size of Your Team
You can have a successful business, whether you’re running your company solo or with a large team. Have some idea of how this will look as you’re starting out, since hiring the right people can take time. If you’re planning to build a team, keep these hiring elements in mind.
- Utilize LinkedIn and other online hiring platforms.
- Budget for wages that are both fair and competitive.
- Become familiar with local, state, and federal employment laws and best practices.
Step 2: Obtain Required Licenses and Complete Administrative Filings
Administrative work isn’t the most exciting part of opening a business, but making sure you’ve done all the right paperwork can save you from making costly mistakes. Ensure that all of these that apply to you are taken care of before opening your doors.
State Fees and Administrative Requirements
Every state has different requirements for businesses. Check with your Secretary of State’s office to understand what you need to do to keep your business in good standing. For example, some states require you to publish your articles of incorporation in a local newspaper, and almost every state requires an annual report to be filed. It’s crucial to understanding your state-level requirements to avoid fines or even the dissolution of your business.
Business licenses vary by state, city, and industry. Once you know what type of business you’re opening, do thorough research to make you obtain the right licenses.
If your business hits any of these criteria, you’ll likely need a specific business license:
- Federally regulated industries like firearms, alcoholic beverages, or broadcasting.
- Sales tax licenses are required by some states for businesses selling goods or services.
- Home-based businesses often have certain regulations and require specific permits.
- Professional services such as legal, medical, dental, and financial businesses typically require professional licenses.
Some states have additional fees for business owners who are opening a franchise. Check with your specific Secretary of State to find out whether or not this applies to your business.
Step 3: Set Up Essential Business Services
It’s not a good idea to wait until your business operations have already started to set up essential services. These services are tasks that you’ll either outsource or work with a third-party provider for. Setting up these services early gives you plenty of time to work out essential responsibilities, so they’re ready to go when you need them.
Many business owners think they don’t need a payroll provider if they have a small team or are the business’s only employee. However, there are many benefits to working with a professional payroll provider, including making sure payroll taxes are paid correctly and avoiding late deposit fees. Even providers with robust service offerings like Paychex and ADP have plans specifically for small businesses and solo entrepreneurs.
Bookkeeping and Taxes
Investing early in a reliable, user-friendly bookkeeping program like Intuit’s QuickBooks makes managing your business’s finances straightforward. Now that QuickBooks has moved online, it’s more affordable and provides a simple way to share information with your tax professional.
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Third-party 401(k) Plan Administration
If you used 401(k) business financing to fund your business, you’ll be required to sponsor a 401(k) plan. An important factor to remain IRC compliant is the proper maintenance of the 401(k) plan and completing annual filings. While IRS and DOL requirements are complex, working with a trusted third-party plan administration like Guidant provides professional support and even representation in case of an audit.
Step 4: Create an Online Presence
In today’s digital world, if you don’t exist online, then you don’t exist. Even if web content is only a small part of your marketing or sales plan, it’s essential that you establish an online presence in order to succeed. At a minimum, complete these steps to build your online presence.
Google My Business (GMB)
Google has a simple, free tool for businesses called Google My Business, which makes it easier to be found online and engage with customers on the web. By creating a business account and providing minimal information, customers are more likely to find you. Fill out as much of your GMB profile as possible and keep it up to date with events, contact information, and other essential items to help customers find and contact you easily.
Create a Website
If your business lives solely online, it’s worth investing in a professional to build your website. On the flip side, if your business runs largely off-line, you should still have a website, even if it’s relatively bare-bones. This way, customers can find you, your location, contact information, and a list of your services and prices. Platforms such as Squarespace make it easy for anyone, with any level of technical background, to build and manage a website.
Set Up Social Media
Much like Google My Business, business pages on social media can help customers find you and contact you more easily. A basic understanding of what type of social media is popular in your industry can help you figure out where to focus your efforts. For example, a grocery store would benefit from a Facebook page, a photographer should show off their work on Instagram, and a tax professional can network on LinkedIn.
Step 5: Get Started
Now that you know what needs to get done, it’s time to get started. Remember, as a business owner, you’ll wear many hats, but you’re not expected to be an expert in anything. Rely on a network of trusted allies and other business owners you can ask questions of when you get stuck on any step.