Have you ever thought to yourself, how can I start a business? Maybe you’ve wondered, what do I need to know to start a business?
Starting a business isn’t just about creating a website. You have to plan and research what you need to know about your particular business even if it’s an online business. Having a business implies having a location/web presence, business structure, tax and employer ID, and licenses and/or permits. You need these things to really have a business entity.
Is Business Location Important?
In a word, the answer is yes. Location is a very important aspect of any business – whether your business has a physical location or an online location.
If your business will have a physical location, do your research and find the best place for your it. Research the market, and determine who your target market is. Find out where they live and where they shop. Place your business where they are.
Do they drive, or do they like to walk? Are they more eco-friendly? The more you know about your customer the more you’ll know where to rent or lease. Remember, it’s about them! Your location is one of the most important, marketing strategies you can have.
Your online location/presence is a definite must in these internet driven days. Almost all businesses have websites and social media. If you don’t have this, it might end up hurting your business. People want to be able to see what you’re about and what they’re getting into.
If you want to own a restaurant, for example, an online presence is key. Potential customers want to be able to see your menu, reviews, pictures, and map online, and the best way to do it is with a website and a social media presence.
Your customers need to be able to find you, the more accessible your business is, the more customers can come.
What Business Structure is Best?
A business structure defines how your business is organized. It affects your liability, your taxes, and in some cases, whether or not you can have shareholders. For example, if you have a corporation, when you file your taxes, you file your personal taxes separate from your business taxes. However, this is not true for a Sole Proprietorship. Do your homework and consider your business structure carefully.
You can choose your structure on your own or you can hire a business lawyer to take care of it for you. If you want to choose a business structure on your own, there are several online websites you can go to and choose one for yourself. However, I would recommend you speak with a business lawyer, and of course, do your own research and look into all your options.
To get you started here are the five basic types of legal entities:
- Sole Proprietorship: This is the simplest business structure, and the owner has full control. However, they also have full liability.
- Corporation: This gets a little more complicated. There are different types of corporations: S-Corp, C-Corp, General Corp. A primary difference between these is the taxation rules.
- Limited Liability Company (LLC): With an LLC, you get the best of both the corporation and a sole proprietorship.
- Limited Partnership: In this structure, there is one partner who is silent. This one could be the financial provider or the investor.
- General Partnership: This structure can have more than one partner. Think of it as a sole proprietorship with a partner.
There are a few more legal entities available and a couple new ones. The ones mentioned above are just to give you an idea of the business entities and is in no way a complete description of the legal entities. Do your research and talk to a lawyer to see which one would be right for your business.
Don’t Forget about Your Licenses and Permits!
Your next step will be to gather all your important state forms – like filing your tax and employer identification documents. To get your federal and state employer number, go to the IRS website.
In addition, you need to get the right city permits and licenses to legally operate. If you’re going to be selling a product you’ll need:
- A business license
- A DBA (Doing Business As) or an FBN (Fictitious Business Name) if you’ll do business using a different name than the one you registered with the state and that you use to file your taxes.
- Federal and state business licenses and permits, depending on the type of business you have.
- Zoning and planning permits are also important for product businesses and even services businesses. When I was living in Santa Ana, CA, I needed a work from home permit.
To get these licenses and permits, you can go to your city government website and do a search or call them for more information. They are usually very helpful. Every city is different, so again, research and learn what you need
You’ll also need federal and state business licenses and permits, depending on the type of business you have. Some other licenses you should look at are copyrights, trademarks, and patents. To learn more about these, visit the United States Patent and Trademark Office website.
Finally, you need to finance your business. There are different financing options. The first options people usually consider is asking friends and family or taking out a mortgage. But if those are just not realistic options for you, applying for a business loan isn’t that difficult, and many times, the bank will help you and coach you.
You need to:
- Get a great location and have a web presence.
- Register your business with your local government.
- Get a business license and if you’re working from home, a work from home permit if it’s required in your state.
- Create your business entity as a corporation, LLC, partnership, or sole proprietor.
- Talk to a business lawyer and an accountant.
- Write a business plan.
I hope this will help you on your road to starting a business. It may seem like a lot, but I would suggest making a schedule with deadlines. As an added tip, many community colleges have a lawyer available to help the community with matters like starting a business. Contact them, and ask them.
Sometimes there is help we don’t even know we have in our own communities. Research your community, and you might just find some really useful resources.