Are you looking to set up a small business? There are so many things to do. Here is concise list on how to set up a small business.
We also recommend reading our complete guide, which includes the exact steps to make your business set up process easier plus templates you can use:
- Starting a Small Business – A Complete Guide with Template and Tools
Develop a Business Plan
You’ve probably heard it a million times, but it’s worth repeating that often. Business owners who fail to plan are planning to fail. You must take the time to develop and write a business plan. It doesn’t have to be a novel-length tome, but at least something you can use to refer to occasionally to remember your goals and mission.
If you plan to acquire financing, a well-written business plan is essential to get investors or loans from local banks. Take the time to write one, and your business will not regret it.
Create a Great Business Name
When starting a new business, you need a good business name. A business name is not only how your business will operate legally, but it is also a marketing tool. Create a name that will:
- Identify what your business does
- Distinguishes you from other businesses
- Be memorable
- Be easy to pronounce
You could use your own name like “Anne’s Secretary Service” or be creative with your business concept like “Finders Keepers” for an antique collectible shop. Regardless, keeping your name simple is most important.
Consider Your Business Structure
What business structure will your small business take? When you start a new business, this is an important question. Many small business owners simply operate as sole proprietorships. Others may join forces and form a partnership, but you must consider the best structure that works for your business and protects you as well.
Other than sole or partner proprietorship, you might consider an LLC, or even an S corporation. An LLC is a business form that creates a legal corporation-like structure with tax advantages of a partnership or sole proprietorship. An S corporation also allows for pass-through taxation while setting up liability protection for the owners.
Recruit Your Advisory Team
Unless you plan to operate a large corporation with all support in-house, you will likely need to recruit an outside advisory team. You must find reliable and professional people like an attorney, CPA, and insurance agent who can help you with these types of legal and financial business issues.
To find good advisors, reach into your network to see who your friends and colleagues use. If you don’t have a network to tap into, don’t worry – go to a local Chamber of Commerce event and ask around. You’ll find plenty of good recommendations. This small investment of your time can save you a lot of money and headaches down the road.
Get Tax ID, Licenses, and Registrations
Before you begin business operations and starting a new business, you should also consider any official requirements you need from government agencies. A federal Tax ID number will be essential for keeping your income straight with the IRS, as well as employee taxes. Local business licenses will keep you in legal compliance with your city, and registering your business with the state business registry prevents any confusion with a business of the same name.
When you think of how to set up a small business, you must consider the above factors. Although this list is important, it is not complete. Keep in mind that there are plenty of other things to consider, but breaking your list down into easy-to-manage portions will help prevent you from becoming overwhelmed and allow you to stay on track.