Starting a new business venture can be exciting, and it’s easy to get caught up in this excitement and forget more tedious but essential details. Use these steps to ensure that you’re not missing anything as you set up your next business.
Research and refine your idea.
If you think you have a good idea, or plan to sell a product or service, make sure to spend some time ensuring that it’s worth investing your time and money into it first. Spend at least a few days researching the market and your competitors, as this will help refine your approach and how you may be able to differentiate from the rest of the industry. Having some passion for your idea is also essential if you’re going to spend a significant amount of time making it work in the coming months and years, and without this, you’ll likely lose interest before you make it a success.
Create a business plan.
With your idea fully formed and the main issues discovered in your research ironed out, it’s time to write a business plan. The plan should include key topics such as the business’ purpose, who your target market is, where start-up finance will come from, and projected sales. Doing market research at this stage is recommended, which should include some primary research speaking to your audience and secondary research investigating any data you can find. It’s also worth including an exit strategy, which may involve selling when you get to a specific sales level.
Review your finances.
All businesses have a start-up cost, and you’ll need a way to cover them before you start. This may be from your savings, you may be able to borrow from family or friends, or you may be able to apply for a start-up loan. Perform an analysis of how much of your service or product you’ll need to have enough profit to survive on, as this will be your first objective.
Create a legal structure.
The next step is to register your business as a legal entity, and before you do this, you’ll need to choose a structure. Your business structure will impact the taxes you pay and who’s liable if something goes wrong. For more information on taxes, check out this fantastic source of information.
Register with the IRS.
To create an official business, you’ll also need to register with the IRS and the government. To do this, provide your business name, purpose, and structure of the company.
Another step that may be in the back of your mind to do ‘eventually’ is purchasing insurance to cover theft, damage to goods or your property, and even lawsuits. If you have any employees, you’ll also need workers’ compensation insurance and unemployment insurance.
Plan for growth.
With your core business planned, it’s worth planning for growth sooner than later. Growing too quickly can be as much of a threat as an opportunity, and if you don’t have the staff or resources to provide the goods and services you need, it may cause significant issues. Create a plan for hiring and expanding if you see that business is going well.