The need to start one's own business is born every
day and many people would like to act on it but do not know how to go about it.
The following basic steps can give an idea on how to start a business.
Reasons to Start a Business
The first step one should take before starting their
business is to list and analyze the reasons that make them want to start the
business. Among the common reasons is the need for financial freedom. Financial
freedom helps one exercise utter control over their finances. Another reason is
the need for creative freedom that can enable one to come up with ideas for
their business without having the fear that they will be shot down. The need to
manage a business without having to conform to another person's rules and that
of using their knowledge and skills fully are other reasons.
Ideas for the business
If someone wants to start a business, they will have
to choose from the different types of businesses that are
available or create an idea for one. This is an obvious step that many people
overlook as they are lost in their desire to be successful entrepreneurs. For
an entrepreneur who is just starting out, a number of options exist; one can
choose to buy a franchise or an already existing business. They can also ask
for business ideas from other people who have businesses of their own.
Business Plan
Business plans help the owner of the business and
other people evaluate the business. When one is seeking financing for their
businesses, the lenders and investors will ask for the plan so that they can go
through it before they release the funds. If the money is already there, the
businessperson will need the plan for financial projections and business
strategies. The plan should include the marketing plan which will be
instrumental in explaining the strategies for promoting and advertising services
and products. The plan's steps for goal setting will help one analyze the
business' success and indicate the capital required for the break even of
the company.
Financing of the Business
One needs money to start any kind of business
including internet business. Many small businesses have three choices when it comes to financing; bank loans, family, friends and
investors. All of the above choices have different considerations for people's
businesses. Friends, family and investors often want control and ownership of
their part of the new business. Bank loans on the other hand burden the new
business with more expenses; repaying the loan that had been borrowed to finance the small business. This can quickly erode the profits that the business has made.
One should be careful when selecting their source of capital.
Starting the Business
When most people have a business plan and capital at
hand they rush off to start their business completely forgetting the legal
issues. The first thing to settle among the legal issues is the legal
structure; Corporation, partnership or sole proprietorship. This is because
one's financial decisions will affect the kind of structure they have chosen. The
owner should then file with their state to include and get a federal number of
identification. Other requirements are like business license, Air and Water
Pollution Control Permit, Fire Department Permit. County permits, Federal
licenses, State licenses and sign permits are the other requirements one should
have before starting a business.
Opening the Business
This is the stage where the owner of the business
starts to think of making money. Prior to making money at this stage the
business owner will have to spend some first. This is in regards to the
premises of their business; they have a choice between commercial space and
home office. The owner will also have to decide if they want to employ staff to
help with running of the business. One should know the taxes they have to
collect and pay as well. With the difficult part out of the way one can now
settle down to manage their business.
Conclusion
One should make sure that all of the above steps are
taken with a clear head to prevent them from losing money. Starting a business
can be the best financial decision that many business people have made if they
go about it the correct way.
About the Author:
The article is written by Steve Bob.
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