Checklist on starting a Small Business

Checklist on starting a Small Business

In today’s economic climate most probably having a small business maybe the best source of income. There are many good reasons to start your own business from the independence it can bring to your lifestyle to the noble role you can play in creating jobs to other, helping to grow economy and many others. In fact, the hardest part about becoming an entrepreneur is figuring out where to start. Whether you have some knowledge already or are going on a vague notion that this option may be for you, we hope this roundup will be a place to start.

Build a business plan

No small business expert would recommend starting a business without a business plan. There’s too much at stake, your money, other people’s money, the livelihood of your family and potential employees. Every business plan should include something about each of this area, Mission/vision, business name, marketing plan, competitive analysis, financial plan and products and services. In starting a business, your business plan will be your guide towards various phases on your new business and not only that; it can also attract potential investors and secure a loan. For investors this will show whether or not your business can make a profit. It requires a realistic look at almost every phase of business and allows you to show that you have worked out all the problems and decided on potential alternatives before actually launching your business.

Name your business

It may seem so simple to think of a business name, you also have to consider some things before deciding what’s going to be your name. Business name should sounds good and at the same time should be unique so that you have an impact against your competitor but not so unique that potential customers won’t know what you’re selling. However you go about it, spend some time with a thesaurus and an empty sheet of paper and play around with name ideas. Once you have a few you’re happy with, test them out with family and friends. Before ordering letterhead, though, there are a few steps you’ll need to take to ensure that you legally can use the name you selected.

Choose a business structure

There are four primary ways to legally organize a business: a sole proprietorship, a partnership, a limited liability company and a corporation. When organizing a new business, it is important to take time to review the pros and cons of each structure.

Sole proprietorship is the most common form in business structure.  The owner operates the business, is personally liable for all business debts, can freely transfer all or part of the business, and can report profit or loss on personal income tax returns. Common proprietorship includes part-time businesses, direct sellers, new start-ups, contractors, and consultants.

Limited partnership, a limited partnership consists of at least one general partner (controls the business) and at least one limited partner (investor).While General Partnership is a business owned by two or more people. The partners share ownership and control of the business. Partnerships offer more freedom for business owners with shared business tasks and the potential to earn greater profits.

Limited liability company, this is now the most popular business structure nowadays, Limited Liability Company or LLC is a type of business ownership combining several features of corporation and partnership structures Owners of a LLC have the liability protection of a corporation. All your business losses, profits, and expenses flow through the company to the individual members. Unlike general partnerships which are developed under common law, an LLC is created by filing a document (usually called Articles of Organization) with an officer designated by state law.

Corporation, A corporation is a business which is considered a separate entity from you; even having the legal rights of a person. A corporation is usually the most complex and most expensive way to organize a business. Records must be kept to document decisions made by the board of directors. There are two types of corporations; C Corporations (incorporate) and S Corporations (small business). Small business is the most common corporation; C Corporation is more complicated than forming a limited liability company or a sole proprietorship.

Set up and determine your location

Most people will tell you that location is the most important aspect of starting a small business. A good location can attract a large number of walk-by traffic while a bad location can hide you away from potential customers.

There are many steps in office set up including where to locate your office (home or office space), buying the necessary office equipment, designing your work space and getting supplies. Whatever location you choose, make sure you know all of the legal restrictions on your place of business.

Get business insurance

Any business is exposed to a variety of risks. A smart business one will take the necessary acts to ease the risk and one valuable risk manager is insurance. Like home insurance, business insurance protects the contents of your business against fire, theft and other losses. Liability insurance, Property insurance, Business Interruption, Key Man, Automobile, Office and Director are some of the type of insurance that are commonly used today and are merely a starting point for evaluating the needs of your business. In many cases, there is no requirement your business needs insurance unless you have a company automobile, employees or it’s a loan condition. Yet, this is no reason not to get business insurance. No business is immune to natural or man-made disasters and potential liabilities.

Create an accounting system

Financial Management, in general, is meant a set of measures aimed at reaching financial stability. In particular, a foremost aspect of financial management is efficient distribution of economic resources or, in other words, capital funds, as far as they contribute greatly to the company’s prosperity. Therefore, financial management is concerned with the questions of funds procurement and their effective use. Accounting is by far, one of most important aspects of starting and operating a business. It’s so easy to get caught up in the start up glamorous tasks of designing a business card or choosing a business name, yet without a solid understanding of the numbers you will not survive. The objectives of creating an account system is to organize survival in terms of sharp competition, prevent bankruptcy and other financial risks avoidance, increase in production volume, profit and wealth maximization and expenditure minimization. Without a firm grasp of your margins and cash flow, you can price yourself right out of the market.

Starting and managing a small business takes motivation, unrelenting desire, and talent. It also requires a lot of research and planning. Try as you might, it is not possible to know everything in the beginning. Research and planning will help minimize the unknowns and make you better prepared. Remember, lack of planning is one of the leading causes of business failures. When you start a business, your only goal is to make it succeed. And to succeed, you must be able to control all the variables along the way.

More detailed information and useful advice can be found at Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.

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