Will this be the year that you finally go into business for yourself? Entrepreneurship offers many benefits, including schedule flexibility and control over your earnings. Taking the leap from employed worker to business owner can seem intimidating, especially if you don’t know where to begin. This guide is for aspiring business owners who are ready to pursue entrepreneurship.
Get Your Personal Finances in Order
Before investing in a business of any type, getting your finances in order may be a good idea. This includes paying down any debt you may have, including student loans or credit cards. Review your expenses compared to your current income. Determine how long you can comfortably make it until your business turns a profit.
Some business owners may continue working part-time while building their businesses, but this may not be an option for everyone. A business can take a few years to return profits, so ensure you’re comfortable until that happens. Creating a financial debt repayment plan can also help you get out of debt so you can start your new business.
Conduct the Necessary Research
A deep dive into research in your intended industry can help you create a business plan. Make a list of services or items you plan to sell and how they’ll generate income. Consider the expenses you’ll need upfront, including commercial property, supplies, employees, and insurance. Consider what businesses may be your competitors in the market and how you can do better than them.
You could also visit potential competitors in your area to get an idea of their practices. This gives you a better idea of what you’ll be competing with once you open your business doors.
Create a Business Plan
It’s time to create a business plan using the information you gathered. You’ll likely need a business plan to obtain investors or financing for your new business. A business plan should have a summary of your goals and professional background. It should also include a detailed description of the business and how you plan to make money with it. Other things to include in your plan are market analysis, competitive research, financing options, specific goals, and a timeline of when you hope to achieve them.
Explore Your Financing Options
Many new business owners turn to financing to fund their ideas. You have many excellent commercial loan options, but choosing one that fits your unique needs is important. Make a list of questions to ask lenders, including “What do you need to get a commercial loan?” and “What are your commercial loan terms?”
You could offset your loan amount by cashing into your savings. However, starting a business can be expensive and doesn’t pay off for a few years, so lending may be your best option. Some investors may contact family, friends, and previous coworkers to source even more money for their business.
Complete all the Required Paperwork
Most cities and counties have specific paperwork requirements when opening a business. You should register your business with the state as a sole proprietorship or limited liability company (LLC). Each registration type has its benefits, so consider how it affects your situation. Your business registration type could also have tax implications, so it may be worth talking with a business accountant.
You’ll also need to register for a tax filing number with the Internal Revenue Service (IRS.) Create and register your business name with the state. Some business types may have additional requirements. For example, you’ll need a special license to serve food at your business. Professional services also require specific licenses, depending on where you live, including hair stylists and tax professionals. Some cities may even require an inspection before you open your doors. Make sure you complete all city and state requirements to avoid expensive fines or penalties.
Open Your Businesses Doors
Now that everything is in order, it’s time to open your business doors and welcome your first customers. This step may look slightly different depending on your business type. Some businesses may offer exclusively online services. Others may find benefit in local marketing to get customers to visit in person. Commercial property owners may need to advertise to other small businesses to sign on new tenants. Residential property investors may need to establish trust to attract new tenants.
Opening your business doors may also require that you first hire employees. Some businesses rely on employees, whereas others can be just as successful with an owner-operator setup.
Make this the year you finally go into business for yourself. Before opening your doors, though, take the necessary time to complete all research and create a business plan. If you plan to finance your business idea, ensure your finances are in order and that you have a solid business plan in place.
