When you make the choice to jump into small business ownership, it can be tempting to try to get your new venture up and running as soon as possible. But just like the choice to start a business should be carefully considered, there are certain steps in the business timeline that require a thoughtful approach long before you open your doors. Whether your dream is to start a frozen yogurt franchise or a green construction start-up, here’s a step-by-step timeline of how to take your idea from a hazy concept to a thriving business.
1 Year Before Start-up
1. Choose Your Business or Franchise
The first step to making your dream of small business ownership a reality is choosing the right business model, followed by the right concept. Would you rather build a business from the ground up, purchase an existing business or buy into a franchise with an already-established business plan? Deciding what’s right for you can be tricky, but this decision will ensure you set a solid foundation for years of success. Get started by researching your options — tons of information exists, and each option has its own list of pros and cons.
2. Write a Great Business Plan
Following closely on the heels of choosing your business idea or concept is a written business plan. This is not a project to take lightly. A well thought-out plan should outline your business strategy and take into consideration market trends, possible challenges, your experience and your financial projections. In fact, this is the document banks will use to determine whether or not to loan you money to start your business, so take it seriously – your financing may depend upon it.
3. Consult with the Professionals
Now is the time to seek out the opinions of professionals, from lawyers to accountants to financial consultants who can help you set a strong foundation for your business. This is also an ideal time to find entrepreneurs who have walked in your shoes in the past who can offer their first-hand advice. The more information you gather up front, the better. Having a team of reliable professionals in your corner means you’re better able to avoid common business blunders as well as navigate unforeseen obstacles that can creep up down the road.
6 – 9 Months Before Start-up
1. Move Forward With Financing
Options abound when it comes to financing, including everything from 401(k) business financing that allows you to start your business debt-free to Small Business Administration (SBA) loans and unsecured loans. The former option, formally known as Rollovers for Business Start-ups (ROBS), is becoming more popular as you can buy a business using your retirement funds without incurring taxes or taking on a loan. On the other hand, SBA loans are also common, and they offer low interest rates and favorable repayment terms.
If you’re ready to get started on your financing, pre-qualify today to learn what options are available to you.
2. Find a Location and Obtain Necessary Permits
Will you need a brick-and-mortar storefront, an ecommerce website or both? No matter what your business structure is, you will need somewhere to run your daily operations, and it will likely require a permit. You may need a fire department permit, a health department permit (if you are serving food or drink) and even a permit to hang your sign. Ignoring these requirements could be a costly and dangerous mistake.
3. Get Your Business License and File Your Entity
The type of business license you need depends on which type of business or franchise you’re starting. For example, you’ll most likely need a city, state and federal license for your taxes, no matter what type of business you start. You may also need a professional license that is unique to your trade or services.
This is also the time to determine your business structure, whether it’s a Limited Liability Corporation (LLC), sole proprietorship, corporation or one of various other types. Many business owners and CPAs opt for an S corporation, but C corps also offer a bevy of tax benefits to entrepreneurs. No matter what entity you choose, when you file, the government will give you a federal ID number for your business, known as your Employer ID Number, or EIN.
4. Open a Business Bank Account
It’s important to have a separate bank account or accounts for your business.You can open a business account at any of your local banks, as well as obtain business debit or credit cards for any charges you may incur during setup and operation. Work with your accountant to better understand how to keep your business and personal finances separate to set yourself up for success when tax season comes around.
3 – 6 Months Before Start-up
1. Set up Shop
Now it’s time to see your vision become a reality. Go ahead and arrange for delivery of your furniture, equipment and any other items needed to run your business. For a brick-and-mortar store, arrange or organize the office or retail space to your liking. If you’re an online-based business, now is the time to test your website to ensure the pages are set up correctly and functioning well.
2. Hire Your Team
Hiring the right people to support your small business is extremely important and should not be rushed. Do your research to ensure you’re hiring and retaining the top talent in your area. Whether or not you’re familiar with local hiring practies, be sure to review the Small Business Administration’s recommendations for state and federal regulations around hiring employees.These tips include everything from obtaining workers’ compensation insurance to setting up recordkeeping for your hires.
You’ll also want to decide which provider to hire for payroll processing. Working with a full service provider, such as Paychex or ADP can be more expensive, but can also mean getting support on city and state tax payments, required insurance, annual filings and employee time sheets.
3. Market, Market, Market
You don’t need to shout it from the mountaintops, but it’s time to get the word out about your products and services in local newspapers, on websites, at networking events, via word-of-mouth and on social media channels. A marketing plan will be critical, and if you don’t feel comfortable creating one on your own, enlist the help of a professional. This is your dream business and you want it to succeed, so get your future customers as excited as you are.
Congratulations – you are now well on your way to realizing your dream of owning a successful business or franchise. If you follow the steps in the timeline, you’ll be off and running in no time. Best of luck!