Transforming a business idea into reality can seem daunting, especially if you do not know where to start. According to the Small Business Association (SBA), before you can start a business, you need to make sure you are ready to be a business owner and determine if you have what it takes to become a successful entrepreneur.
One of the first steps to starting a business is choosing the legal structure that has the most advantageous tax considerations and legal liabilities for the type of business you want to own. The California Secretary of State advises entrepreneurs to consult with a tax advisor and/or business lawyer before making a final decision about a legal structure. Legal structure types include a general partnership, sole proprietorship, limited liability company (LLC), limited liability partnership, limited partnership and a corporation.
A business plan is like startup’s blueprints because it helps focus ideas, describe the different aspects of the business, develop a marketing plan and forecast future income. According to the SBA, a good business plan includes an executive summary about the company, describes the legal structure, information about the management structure, marketing plans and plans for business growth.
The best place to start a business depends on the size and type of company you want to start. If you want to start an online business, you could work out of a home office. On the other hand, if you want to manufacture products, you will need a large space in an industrial zone. Your local Secretary of State or state business investment services office can help you figure out the best place for you to start a business in consideration to size and zoning requirements.
Internal Revenue Service (IRS) Filing
When you start a business, you will need to file your business with the IRS and request a Federal Employer Identification Number (EIN). You can find the forms to file your business with the IRS and request an EIN at IRS.gov. The IRS department in your state can also help you access the applications you need and fill them out accordingly.
Licenses and Permits
The licenses and permits you need are specific to the type of business you want to start. For example, a food cart owner needs a permit from the local health department to serve food. In addition to registering your business, your Secretary of State can help you determine the appropriate licenses and permits you need, as can your state’s department of consumer affairs.
You will need a business loan to cover the startup costs associated with starting a business. The amount of money you need to borrow depends on the overhead costs, the type of business you want to start, your investor, grants you acquired and the amount of money you have to invest into the company. You can receive additional funding from banks or credit unions. The requirements to get a business loan from a bank or credit union vary by lending company, and presenting your business plan can help you with the application process.