Starting your own business is an exciting and fruitful experience for many entrepreneurs. Yet many people hold the misconception that setting up a company is a complicated, drawn-out process. As a result, they don’t follow their dreams.
You might be surprised to learn you can accomplish the basics in a week — or less. Here’s how.
Define and refine your business plan.
This seems obviously and self-explanatory on the surface. Of course you have a business plan. You’re doing all this because you have a strong, viable idea for a product or service. But you’ll need other people to hop aboard. They can’t see your vision as clearly as you can. It’s time to put your thoughts, goals, dreams and plans on paper.
Try to keep the idealism out of your business plan. The people with whom you’ll meet this week need to see concise details. They want numbers, trajectories and validated data. After you’ve written your business plan, give it to a few people whom you trust. Listen to their ideas and suggestions, and then pare down and refine your mission statement.
You also can put together a presentation to convey your vision. You don’t want to show it to everyone you need to speak with, but an eye-catching, relevant and entertaining pitch will pique the interest of potential backers and investors. Include numbers and statistics from your business plan, but show something of yourself as well.
Decide where you’ll set up headquarters.
Do you want a store? Is your company operational entirely online? It mainly depends on what you’re selling. Some businesses are better as brick-and-mortar establishments. Others fare better online. If your wares lend themselves to the notion, you might launch a hybrid company with a physical location and a web store.
Understand that different places come with different requirements. Before you open a physical store, you’ll need to research neighborhoods and look into zoning laws and the permitting process. Your online storefront will require a registered domain to conduct ecommerce. It’s not as simple as renting an empty building or creating a website.
Explore the legalities.
It’s vital to discover the best legal structure for your new business. In fact, do this before you ever register your endeavor with any local or state agencies. What kind of business is it? Its structure will determine how you’ll file taxes on your startup. It also affects your degree of personal liability, should anything (or anyone) go wrong.
If you’re going it on your own, you’re eligible to create a sole proprietorship. If more than one person will be liable, you’ll need to register as some form of partnership. However, you might want to separate yourself from your business so you’re not personally responsible for debts, legal obligations and other issues. In that case, you’ll need to form a corporation. Small businesses, for example, usually register as Limited Liability Corporations (LLCs). It’s wise to meet with a professional tax adviser before you make your decision.
Get your business license.
You can’t do business without a business license. Later on, having one also will make it easier to figure out your new venture’s tax information. A quick visit to the U.S. Small Business Administration site can show you almost everything you need to know. Enter information about your location, choose the appropriate type of license, and the site’s resource describe what you’ll need to obtain your license.
Some cities and states offer online applications, which makes the process fairly effortless. Expect to pay a fee and to apply for both state and federal business licenses. Be prepared with a few backup names for your business in case the name you want already is taken.
Figure out your finances.
How are you financing your business? Do you have savings, backers or investors? Are friends and family members loaning you money to get started? If so, that’s incredibly supportive. Starting a new business is not only expensive, but many costs arise unexpectedly.
Depending on your situation, you might be able to secure a loan or even exercise the option to take on several at the outset. Any type of assistance depends on credit approval, and your credit approval depends on your credit score. There are no guarantees when you apply for a private or small-business loan.
Know your credit score before you go to the bank or credit union to apply. Your score will affect your chances of getting the loan as well as lenders’ willingness to back you. That’s important as you think ahead to financing your day-to-day operations. Do you intend to let your customers pay by credit card? Is your bank willing to cover that risk?
You’re not at a loss just because you have poor credit. Regardless of your score, high-risk credit-card processors are willing to help get your business started so you can build equity. As long as you read and understand the fine print, high-risk credit cards can provide quick access to extra funds for vendor or employee payments.
Let the government know about you.
Unless the government recognizes you, you’re not officially a business. It’s time to register your new company with the government by filing an article of incorporation. This document lists the name of your business, its purpose, its corporate structure, any details about stocks and similar information. If you’re not registering as a corporation, you simply need to register the name of your business. That could even be your legal name or a DBA — “Doing Business As.” Depending on your branding, you also might want to seek a trademark.
Once you register with the government, you’ll need to introduce your business to the IRS. That involves acquiring an EIN (Employer Identification Number). This isn’t a requirement for small businesses without any employees. It is helpful, however, and you can apply online for an EIN.
The steps above will get your new business off the ground, but you’ll still need to look into insurance, hire employees and choose all the tech and equipment you’ll need to make your business run smoothly. Then, the real work begins. Most new businesses don’t make it past the first few years. You’ll need to continue improving workflows and growing your client base if you want yours to be around long after these initial seven days.