Glossary of Terms:
For a business startup, there are specific steps you need to take. They do not have to be in a particular order, generally speaking, but they must be done. In addition to the website you are visiting right now to help you start a business, there is a terrific website called business.gov
that can be extraordinarily helpful to you starting a business. Here are the steps suggested on that website:
Step Number One:
Plan your business and then work your business plan. That is the first step from business.gov. Although you can start a business without a business plan, it saves you time and money in the long run. As the old saying goes, when you fail to plan, you are planning to fail.
Step Number Two:
Get smart by getting trained and educated about business issues and procedures. The Small Business Administration website
can assist you with training through articles and videos.
Step Number Three:
Find a location for your business. It could you your house or garage or a new office building in downtown New York City. Probably the key point to making the right location decision is finances. If you are starting business on a shoestring, you probably need to work out of your house or a shared office at least for a while. Other considerations beyond money are: customer access, ease of access for you and your employees, leasing and zoning restrictions, and financial and tax incentives and considerations.
Step Number Four:
Financing the company is, of course, critical. These are tough times to get money for a new business start up. Banks are extraordinarily tight with their money even for existing good customers. The government had money in 2010 but many of those programs have run dry. Depending on the business you wish to start, you might be able to finance it on a shoestring to begin with. You might get a loan from a rich relative or take out a home equity loan on your house. Some new entrepreneurs launch the business on credit card power. WARNING! It can be done but it is also likely that you will wind up awash with debt. Try to avoid credit card financing as much as possible. Take a cheaper office, don't hire fulltime employees right off, work part time and nights at your new business while keeping your day job until the business is in the black.
Step Number Five:
What will you be? A corporation, a partnership, a sole proprietorship, or an LLC? You have to determine the structure of your business. A key word of advice--don't do it alone. Even if you are starting on a shoestring or you have no shoestring at all, hire a lawyer or an accountant that is wise in the ways of small business. The advice will pay for itself 100 or 1000 times over in the future.
Step Number Six:
Register the name of your business. Depending on the type of structure you select, that registration might be at the county level or state level.
Step Number Seven:
Get your tax identification number from the federal government.
Step Number Eight:
Get your state tax ID number from your state government.
Step Number Nine:
Get the business licenses and permits that you need to conduct business. WARNING! When the new business is only a gleam in your eye, check out what it takes to get the licenses and permits that you need. If you are planning to work out of your house or garage for awhile, at the very beginning of the process, check out if you can legally use your house for business.
Step Number Ten:
If you will hire employees, you need a quick course on working with employees and hiring and firing practices. This is critical to having a smooth relationship with the people you work with and avoiding lawsuits.