Thinking about starting a small business? It can be exciting and nerve-wracking to take the plunge. Before you open up shop, there’s a lot of preparation required. These five steps will lay a foundation for success.
1. Do Your Research
Every business venture starts with an idea, but you need more than that to succeed. Learn the lay of the land. Do companies similar to yours already exist? What will you do differently? Who are your target customers? What value proposition do you bring to the table? Do market research and competitive analysis to determine if your idea is viable before you invest more time and money.
2. Figure Out Your Finances
How much funding will you need to get started? Where will the money come from? Your savings? A loan? Investors? What will your pricing structure be? What is your break-even point? How long before you anticipate making a profit? Getting your financial ducks in a row is just as important as having a great idea. Take the time to thoroughly answer these questions, which will be important when you write your business plan.
3. Determine Your Business Structure
What type of company should you start? There are quite a few options, so choose the one that makes sense for your endeavor and lifestyle:
Sole Proprietorship: This gives you total control of your business, but legally speaking, there’s little distinction between your personal and your business finances and liability. It’s easy to set up but can open you up to risk.
Partnership: If you have a business partner(s), this structure is a simple way to get started.
Limited Liability Company (LLC): Unlike a sole proprietorship, the LLC structure separates your personal assets from your professional ones. LLCs will require you to file self-employment taxes.
Corporation (including B, C, and S): Each type of corporation is slightly different, but all of them are structured to be a separate entity from the owner, so individuals are not personally liable.
Nonprofit: If your business involves charitable work, then a nonprofit might be the way to go.
By this point, you’ve put a lot of thought into your potential business. It’s time to organize all those details into a business plan that clearly articulates your goals and outlines how you intend to achieve them. A well written business plan will communicate the value of your business as you secure funding and plot a course for your first year.
5. Register Your Business
Once you’ve established your legal entity, you need to let the government know about it. Some situations only call for registering your business with local and state agencies, while others may require registering with the federal government. The paperwork you file will depend on what type of structure you chose. Either way, you will also need to get state and federal tax identification numbers. Depending on your location and industry, you may also need to get additional licenses and permits to conduct business.
At Sink, Gordon & Associates LLP, we have a variety of positions, including Certified Public Accountants (CPAs), small business accountants, and administrative staff. If you’re looking for employment opportunities in accounting, please browse our job openings and related qualifications, responsibilities, and benefits below.