The Back Alley Guide to Business
It is important to note that there is no one size fits all model to starting a new business but these steps will help you organize your thoughts, and iron out important details so once you complete these steps you would have launched your business. Now you are a business owner. Congrats on your success
There will never be a right time to start a business. If you really want to start a business all you need to do is follow these 10 steps.
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Step 1: Prepare your mind.
Step 2: Determine what type of business to start.
Now that you have decided to start a business the next step in the process is know what type of business you want to start. Are you going to provide a service or services, are you going to sell a product or products, or are you going to do both. Let's go threw both. Services are one of the easiest business to start because this type of business is based on your know how. You will be getting paid from your time and efforts. What do you know how to do, what can you teach the next person, How can you help solve a problem. Products on the other hand requires products, now you need something to sell. What can I sell? Buying products to resell is the normal in product sales, however you can create your own product if you have any idea's of something to create. Once you have decided weather you want to provide services or sell products or even both, you business has now been conceived. It's time to come to the realization that you are starting a business, your are about become a business owner. Oh yeah.
Step 3: Decide if you really want to do this.
- Does the services you will be providing is it a need for your services do you have the skill and know how to provide those services, when can you start providing these services and solving problems of others.
- Does the products you want to sell, are they created by you or are you going to buy and resell. How soon can you get or make these products.
Step 4: Decide your business name
Now let's create the business shall we. Now you need a business name. Sometime creating a business name can be harder than it sounds, the easiest way is to keep it simple, try not to over due it. Here are a few tips. If you are doing more than one type of business or planning on doing more than one type of business, choose a suitable name for the entire business not just one part. Example, if you are going to be doing plumbing, "Joe's Plumbing" is a good name, that's a niche service and you are only providing one type service. If you will be providing more than one service, like plumbing and home improvements, "Joe's Home Repair" or "Joe's Home Improvement" would be a more suitable name for your business. Either way you can name your business anything you want. Once you have you business name you are well on your way.
Step 5: What structure type of business to create
- A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation. This structure of business you will be using your Social Security Number, so you and your business are one in the same.
- A partnership is the relationship between two or more people to do trade or business. Each person contributes money, property, labor or skill, and shares in the profits and losses of the business.
- In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. A corporation can also take special deductions. For federal income tax purposes, a C corporation is recognized as a separate taxpaying entity. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.
- S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income at the entity level.
- A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations, you should check with your state if you are interested in starting a Limited Liability Company. Owners of an LLC are called members. Most states do not restrict ownership, so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single-member” LLCs, those having only one owner.
Step 6: Choose a business location (Home or Office)
Now that your business structure has been decided now you need a location of the business. Will you be preforming you business from home or are you opting in for a small office outside of the home. Home offices are the least expensive option because the overhead on you business space will be your rent. However if you can afford a office space and that is what you choose to do then have at it. But these days a home office is suitable for what ever you are trying to do. Either way you will need a location for the next step.
Step 7: File Paper work to start business
Step 8: Contact IRS for Employer Identification Number (EIN)
Step 9: Open up a business bank account (Checking's & Savings)
OK now your business name has been register, you have your EIN number. Now it time to give your business a frame. This frame will be your new business bank accounts, you will need a business checking account and business savings account. Your business needs it own money, so when money is coming in and going out it will not be coming from your family and personal money. Maybe in the beginning you will be using your own money but soon after the business should be running on it own strength. Any bank that you like should be sufficient as long as it is in the business name. To open up a business account you will need the business address, business name registration paperwork and the EIN number from the IRS. Once your account is open for your business you have done it. You have officially started a business, you are now a business owner. Congratulations.
Step 10: Business Equipment/Licenses/Tools
- A Desk,
- A Computer,
- A Printer,
- High Speed Internet,
- A Cellphone
Licenses: Depend on what services you decided to offer and what products you decided to sell you may need a license to provide the services and sell those product. Example: if you are providing accountant services you may need a CPA Certification to prove that you know what you are doing, or if your are opening up a daycare you may need a childcare license. Depending on what service you are providing, just do a little research to be sure, you may or may not need it depending on the services your providing. Selling product you may need a license to sell product usually called a sales tax license. You get this from your states sale tax department.
And there it is, after completing all 10 of these steps you have officially and legally started your own business you are now a business owner. Starting and running a business does not have to be so hard especially when you have help and a support system to be there when you need them. Strickly Bizzness, LLC offers IT Support, Business support, and Virtual Assistants to those who need a helping hand. Contact us to see what we can do for you. Request Form