Things You’d Better Know Before You Try To Start Your Own Business
So you want to be an independent business person, your own boss! Launching your own company can be a rewarding experience and a great way to make money and build a dream. But before you travel too far down that road, you need to be aware of a number of items that will be critical to your success. Creating and running a startup business is not a simple task. The more you know going in, the fewer problems you will have becoming a successful entrepreneur.
1 – Write a business plan.
A business plan is an essential tool to outline a roadmap for your company. It is a written guide that helps you project the future of your business and gives you a clear direction of what to plan and expect. A business plan should be professional and should set out to grow your company. The plan should include your company profile and description, mission, business goals, market analysis, business structure (legal entity), strategies, products, financial budget and funding request. Banks and the Small Business Administration will require this plan before you even sit down to talk financing.
2 – Determine Your Startup Business structure.
Examine and research all the different business structures that exist and decide the best option for your startup business: sole proprietorship, partnership, corporation, S corporation, Limited Liability Company (LLC), or non-profit. Your business structure will affect your business growth and taxation. You may wish to be an LLC, but all new businesses qualify to start as a Limited Liability Company or a sole proprietorship. And if you want to be a nonprofit, there is a longer road to that structure. Get more in-depth information before you determine a legal structure by speaking with an accountant or attorney.
3 – Register your Startup Business with the State.
You need to register your business with your state government through the Secretary of State. Obtain Employer Identification Number (EIN) from the IRS and with your state revenue agency. In many states, businesses established as sole proprietors don’t need to register with the state unless they operate under their own name. The legal name you use to register your business will be used to legally operate and obtain financial help if needed, and of course, for tax filings.
4 – Find out your tax requirements.
Speak with a qualified tax advisor who may be a CPA or an Attorney. Your business structure determines the type of federal and state tax return you have to file. Business taxes include the income tax, the self-employment tax, social security and Medicare tax. At the state level, business taxes or corporate taxes requirements depend on the legal structure of your company. Keep files organized and complete, not only for yourself, but for your tax advisor and the IRS, should you be audited.
5 – Separate Your Startup Business and Personal Finances.
You must separate your business from your personal life to avoid money issues and financial consequences. Open a separate business bank account. With this account, keep track of the money received for your business. Set up business and personal budgets.
Best practice–budget an emergency fund that can cover your expenses in a time of a slow business and help you avoid financial disaster. It can also help cover your tax requirements. Move money every month into an account that is separate for paying quarterly taxes.
6 — Communicate!
Running your own business can affect more than your bottom line. Keep an open line of communication with any significant others, your accountant, partners, and your banker! Hiding problems won’t cure them and will affect your business, finances, relationships, and your health.
7 — Reach Out
Find help when you need it. This isn’t a brand new road! The Small Business Administration is there to help. Your Chamber of Commerce and city business divisions are likely resources. You can find classes on almost anything on the internet. Salesforce is an amazing tool for Startups. Learn more about Salesforce for Startups and SalesforceIQ today.
Cloud Co-Op is here to help you streamline your business processes. Check out our Cloud Start and see how you can get started with Salesforce to manage and connect your customers and business processes.
Know that, as your own boss, you have to work harder than any employee. I once was speaking to a group of new insurance agents. I asked each of them why they chose insurance as a career. One said that he only wanted to work “half days”. I asked him, “O.K., which half do you want to work; the light half or the dark half”? To be successful your business is a full-time job!
Blog by Randy Kenyon
Certified Salesforce Consultant, from Cloud Co-Op, Wichita, Kansas
Vietnam Veteran, US Army