Starting your own company is undoubtedly worth considering if you have the right entrepreneurial ideas. As per the US Business Formation Statistics (BFS), 4.35 million new business applications were submitted in 2020 alone. Although starting a business from scratch is an exciting opportunity, the numerous details involved make the entire process challenging for many entrepreneurs. Nevertheless, you can still set up your company easily by following the proper steps. Please consider the following points if you wish to know more about establishing your own company.
1. Select the Right Funding
It is common knowledge that setting up an enterprise demands significant cash to turn your entrepreneurial dreams into reality. Generally, your business plan will help determine how much money is necessary to launch your company. If you don’t have your capital on hand, you will need to raise or borrow money to set your plans in motion. Luckily, there are numerous ways to access the capital necessary to start a business these days. For instance, you can explore crowdfunding campaigns and angel investors as reliable funding sources for your new business. Alternatively, you can turn to a Kansas bank that understands a 7 (a) loan guaranteed by the Small Business Administration (SBA).
2. Pick Your Business Location
Location matters when setting up a new business, so it is crucial to decide which neighborhood, city, and state to start your company in. Generally, you can establish your company where your target market is and based on your preferences. Additionally, consider the benefits, costs, and restrictions of various government agencies in your preferred location. Finally, consider accessibility and talent recruitment when selecting the right location for your business.
3. Conduct Thorough Market Research
Many business experts agree that setting up a new business without conducting enough market research is always a bad idea. Consequently, prioritize effective market research to ensure that your company enjoys significant success after launching. Market research is an excellent way to gather information about potential clients and enterprises operating in your area.
This way, you can keep up with market trends, understand your target market better, identify pressing consumer needs, and pinpoint relevant competitors. As such, conducting proper market research before launching your company offers you a great understanding of your marketplace, enabling you to develop sound business strategies that will help your enterprise obtain a competitive advantage.
4. Write a Great Business Plan
Research indicates that about 70% of businesses that survive after five years of being established follow strategic business plans. As such, a realistic business plan is one of the critical fundamentals of any successful business, so it is imperative to write one before starting your enterprise. In this plan, you must outline all achievable goals for your company, how your company can achieve these targets, and possible problems and solutions. Then, use this plan as a roadmap to run and grow your business.
5. Choose the Proper Business Structure
Your business structure choice is critical when establishing a new company since it influences your daily operations, the paperwork you must file, taxes, how you can raise money, and your liability. Therefore, select a business structure that offers you the perfect balance of benefits and legal protections. Sole proprietorships, partnerships, S corporations, and C corporations are the most common business structures in America you can select from.
Also, remember that it is always best to carefully choose since there may be location-based restrictions regarding converting to another business structure in the future. As such, it would be best to consult your attorneys, accountants, and business counselors before deciding on a business structure.
6. Apply for the Necessary Licenses and Permit
Many small businesses require licenses and permits from federal and state agencies before operating, so apply for any licenses and permits you may need to start your company. The fees and requirements for these licenses and permits may vary significantly based on your location, business activities, and government rules. You will need to obtain a federal permit or license if a federal agency regulates your business activities.
For instance, the US Department of Transportation regulates transport and logistics, so you should reach out to this agency if your company will operate an oversized vehicle to kickstart your permit acquisition process. Furthermore, the licenses and permits you will require from your city, county, or state will depend on your company’s location and activities. States often regulate more activities than the federal government, including retail, construction, and restaurants. Therefore, research your state, county, and city regulations to determine if your business requires any licenses and permits before operating.