You have decided to start a business… now what? For starters, you can follow these six steps. Here, we will talk about the initial steps you need to consider before moving forward:
Start building your team of advisors
It is important to get a lawyer and an accountant involved as early as possible. It is a common misconception that it is not necessary and expensive to hire them. Wrong! By talking to them as early as possible will not only help you avoid costly mistakes and future headaches, but also quite often does not cost you anything (a.k.a. free consultation).
Write a Business Plan and a Marketing Plan
Do not underestimate the power of a written plan, a roadmap that you will refer to, edit and follow throughout the life of a business. Do not forget that both are living organisms and are not written in stone. Both require updating as business develops and goes through different stages.
Get the necessary financing
Your business plan should have a significant section describing how much financing required and sources of financing. Now, it is time to make sure the financing is available. It is important to understand all costs associated with a business and to include it as part of a plan.
Decide on legal structure of your business
The lawyer or the accountant from your team (see step 1) will be best to assist you with this step. Choosing the right legal structure when forming a business can help you lower your taxes, limit your liability and even affect your attractiveness to potential investors, all of which will save you time and money down the road. That is why planning is essential.
Regardless of the legal structure you choose in step 4 you need to get a tax identifier number for your business (a.k.a. EIN). You will need EIN to open a business account and to pay taxes, but also to separate yourself from a business entity. You can apply for EIN for free at: https://irs-tax-id.com/.
Be sure to stay compliant
Get the necessary business licenses, permits and insurance. Protecting your business from the beginning is paramount. Talking to your lawyer will not hurt to make sure your business is compliant with federal and local rules and regulations. If applicable, get an insurance to add extra protection layer to your business.