Steps to Starting a Small Business

By Isaiah David

  • Overview

    When it comes to starting a business, a little planning can save you a lot of grief down the line. Before you get to work, you need a solid business plan, enough capital to get started, professional-looking materials advertising what you do, and a good way to keep track of everything. Starting your own business is going to be difficult and stressful, but avoiding taking shortcuts will make the process easier.
    • Step 1

      Decide what sort of business you want to start. What service or product do you want to provide, how do you want to provide it, and who will your clientele be. Do you have professional experience that could help you, or potential partners who might want to work with you? Think about what it might take to get your business started. How much money and time will it require, and how much do you have to invest? Develop your ideas into a business plan.
    • Step 2

      Decide whether you want to run a corporation, partnership or sole proprietorship. In partnerships and sole proprietorships, one, two or several people own the company. They benefit when it does well, but can be held personally liable if it folds. These types of companies are easy to apply for and easy to file tax returns for. A corporation is more difficult to set up and requires complicated record keeping. On the plus side, corporations can sell stock to acquire funds. If the corporation folds, you won't be personally liable for its debt. The drawback to selling stocks is that the stockholders now have control over the corporation.

    • Step 3

      Figure out how you are going to finance your business. You can use your own money, find interested investors, or get a loan. Investors will reduce the profits you get somewhat, but they will make needed capital available to you with little risk. Using your own money simplifies things, and is a good option if it is within your means financially. The United States Small Business Administration offers loans specifically designed for small businesses, which makes it a good place to look for financing.
    • Step 4

      Brand your business. Register a business name, print out business cards and pamphlets, and get a mailing address if you plan to work from home. The manner in which you present your business is one of the most important details in determining whether you succeed .
    • Step 5

      Get all necessary licenses and permits to do business. You may need a state sales tax permit, a city license and other permits. Contact your state department of commerce for more information.
    • Step 6

      Set up record keeping procedures. You should have a procedure to keep track of invoices, shipping receipts and other forms. You also want to set up regular backups of any hard drives you use, and keep paper copies as an extra backup.
    • Skill: Moderate
    • Ingredients:
    • File cabinets and folders
    • Backup system
    • Business plan
    • Business forms
    • Business cards
    • Business pamphlets
    • Tip: Consider working with a partner with previous business experience.

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