10 Steps to Starting a Business

Courtesy of VPMom.com, Advances in Career and Family

Starting a business is exciting; however, it can seem overwhelming.  VPMom has designed “step by step” guidelines to guide you as you take your ideas to the next level…REALITY!

The 10 steps we outline are a wonderful starting point to opening your own small or home-based business.  This “step by step” process can be enhanced by joining VPMom.com as a Business Member – Oops, that makes 11 steps…Be sure to check out step 11 below.  

1.            Research

·        Become knowledgeable about your industry, competition, and target market.

2.            Business Plan

·        Like a road map, your written plan should guide you toward success.  Be sure to include financial statements, as lenders will ask to see this plan.

3.            Business Structure & Registration

·        Choose a structure (Corporation, Sole-Proprietor, etc.) that suits your business needs and offers the best tax benefit.  After the structure has been determined, file official paperwork to register your business with the appropriate agency.  

4.            Financing

·        Determine how your business will be financed.  

5.            Zoning & Licensing

·        Contact city, state or town licensing offices to inquire about special zoning laws, permits, and/or licenses you may need to consider.

6.            Location

·        Choose a suitable location for your business and client needs.

7.            Business Name and Registration

·        Decide on a name for your business.  Then, make sure it is available and register it with the appropriate agency.

8.            Professional Guidance

·        Enlist the assistance of an attorney, an accountant, an insurance agent, and/or a bondsman- if necessary.

9.             Federal EIN

·        Apply for a Federal Employer Identification Number if needed.

10.         Employees

·        Research labor regulations if you plan to hire employees.

1.     Research

There are several ways to gain information regarding your industry, target market, and competition.  A great place to start is:

State Home Pages.  Try a search under “business” or “agencies”.  Most states have agencies/departments designed to provide business owners information on your state, its economy, and data specific to regions/communities.  Find out as much as you can about your competitors, too.  In addition to your own research, you may consider hiring outside research firms or consultants if your budget allows. 

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2. Business Plan

Drafting a business plan is crucial to your business’s success.    Our Business Plan Template will enable you to consider ALL aspects of your business-some you may not have even pondered, yet!  It is also necessary to have a business plan if you are seeking financial assistance from an outside source.  The plan should be clear, concise, honest, complete, and grammatically correct.

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3.   Business Structure & Registration

Choosing a business structure and the registration process is relatively simple.  However, the legal and tax-related issues associated with your business’s structure should be researched thoroughly.  You may want to enlist the help of an attorney &/or an accountant during this process.  Your options include:  SOLE PROPRIETORSHIP, GENERAL PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED LIABILITY PARTNERSHIP, “C” OR “S” CORPORATION, FOREIGN CORPORATION, LIMITED LIABILITY COMPANY, & TAX-EXEMPT ORGANIZATIONS.  The following link may help you to determine which structure to choose: Business Structure Wizard.

Next, you will probably need to register your business with the state or county.  Registration requirements will vary.  We suggest starting at your state’s home page to determine how and where to register your business structure State Home Pages. 

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4.   Financing

Every business owner MUST consider how his or her business will be financed.  Some common sources of funding include:  personal savings, home equity loans, credit cards, friends/family, banks & credit unions, and venture capital companies.  Grants to start most businesses are almost nonexistent, but don’t let this discourage you.  If personally financing, fund your business in different phases so that smaller amounts of money can be distributed over time.  Hopefully, but not always realistic, your business will quickly begin making money that can be reinvested rather than using more personal funds or getting additional loans, etc.  If you are interested in finding out more information about financial assistance opportunities, click here: Financial Assistance.

**Tip:  You should open a business checking account if you haven’t already.

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5.   Zoning & Licensing

You may need to acquire special licenses or permits for your business.  This will depend on the type of business you are running and/or its location.  Requirements vary according to state, city, or county guidelines.  Some information may be found by clicking on the following link: Business License Information.

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6.   Location

Choosing a good location can have a direct impact on the success of your business. 

The first question to ask yourself is…Can my business be run from home or do I want/need an outside office location?  If you chose an outside location you must continue and ask…

-Should I buy or lease the property?

-Is this location easily accessible and/or near my target client

 base?

-Does this site have a lot of traffic passing by?

-Which side of the street will bring more customers?

-What are the demographics of the area surrounding my office?

-Should I choose a stand-alone building, a strip mall, power

 center, or regional mall?

-Will nearby stores help attract business to my establishment?

-Is parking adequate, easy to enter/exit, well lit, etc.?

-How is the condition of the building?  Does it meet zoning and

 other local requirements?  What are other tenants opinion of the

 management?

-What is the total cost of the lease including maintenance,

 modifications, common-area expenses, insurance, utilities,

 security/alarm services, taxes, flat lease vs. percentage of

 business revenue, how/when will rent increases be determined?

-What are the terms of the lease to include:  dispute resolution,

 required hours of operation, possibilities for expansion?

-What is the history of the site to include:  why it’s vacant,

 vacancy length, reason(s) for previous tenants move, fail/success

 rate of previous businesses at this site?

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7.   Business Name and Registration

Registration of your business name and/or trademark can take place at the state, federal, and international level. As a business owner you will want to choose and register a name &/or logo appropriate to your business that does not infringe on copyright, trademark, or patent laws.  Without proper research, all or partial rights to your trade name/trademark could be revoked.  We suggest searching databases that check for name, patent, or trademark availability prior to submitting the necessary paperwork.  This can save A LOT of time and decrease the likelihood of your application being rejected!  Registration can take place at the state, federal, and international level.

Most states have a searchable database to help determine name/trademark availability.  Begin with your state’s home page and search under Secretary of State or Corporation Commission.  These are two common agencies handling business name/structure filings:

State Home Pages. 

Click here to search for U.S. patent/trademark information: Patents and Trademarks.

You will need your name approved to list it on the paperwork submitted for choosing your business structure (see step 3).  However, you may register additional names that your business will conduct business under- commonly referred to as a D.B.A (Doing Business As).

When choosing a name for your business consider:

-The name should be easy to understand, spell, pronounce, etc.

-Avoiding names identical or too similar to those already being

 used by other businesses.

-Not using names with unique/unusual spellings that my cause the

 customer difficulty.

-Where your listing will be alphabetically in the telephone book.

-Including your service/product name within your business name.

-A name that depicts the image you are trying to create in terms

 of quality, reliability, promptness, etc.

Once your name has been selected, you should register it with the appropriate agency/agencies.

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8.   Professional Guidance

As mentioned in previous steps, professional guidance is often necessary when starting a business.  Attorneys, insurance agents, accountants, and bondsman can be helpful depending on your business needs.  Get referrals from friends/family, visit our Business Directory, or check your local telephone book to locate the help you need.

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9.   Federal Employer Identification Number (EIN)

You may need to apply for an EIN from the IRS.  Consult your accountant or link to the following website to determine if your business requires you have an Employer Identification Number.

The application process is VERY quick and painless if done by phone.  You may also apply by fax or mail.  Access EIN Information and Forms Here: EIN Forms and Information.

**Tip:  To save time, download the form and fill it out before calling the toll-free number.

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10.    Employees

Federal and State Labor Departments oversee labor regulations and employer responsibilities.  Statutes include: payment of wages, employment practices, employing children, etc.

Contact your State Labor Department by clicking here: State Department of Labor Connections.

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