WHAT YOU NEED TO START A BUSINESS

To start a business, you should first have a solid understanding of the particular type of business you intend to start, a written business plan, and enough funds to cover your costs until the business becomes profitable. Jumping into a business without some level of effective pre-planning can result in financial headache for small business owners.

Choosing the Best Type of Business to Start
Start with your current training and skill set. Many entrepreneurs have used their experience and training from prior employment to offer specialized services or products. Alternatively, some colleges offer training programs, which include general business classes and specialized courses in certain fields. Some franchises also offer training before or during the start-up of a business. A good understanding of the economics of
the business you are starting will increase your chances of success.

Developing a Business Plan
After choosing the type of business you would like to
start, you will have to develop a business plan.
Hobbies that generate income involve activities
considered to be a hobby that occasionally produce
income, but it is not necessary to create a business
plan because the focus is more on your hobby. But if
you are starting a regular business, you will need to
create a comprehensive plan as to how, when, and
where you intend to start the business and who you
want involved.
Poor planning is one of the biggest roadblocks for
small businesses. For example, failing to identify who
will do what functions and how much each partner will
be allowed to withdraw on a regular basis are details
that can cause hardships and misunderstandings for a
business. If you need assistance drafting a business
plan, contact your local community college or small
business administration; they will usually offer courses
on how to write an effective business plan.

Calculating a Budget for Your New Business
The next step in the process of starting a business is
budgeting. Your business plan should include an
accurate budget for start-up costs and subsequent
operational expenses. Do not manipulate or falsify
these numbers. Know what your expenses are so that
you can effectively plan and budget. Depending on the
type of business and where you are located, you may
qualify for private and state funding sources through
minority grants, small business loans, or economic
development incentive packages. If you do not have
access to external funding sources, take the time to
visit with an accountant regarding financial planning
options and strategies.

Choosing a Business Structure
State laws enable you to create a legal entity, which is
a separate identity from you or any partners, under
which you can transact business without the risk of
exposing your assets to any personal liability that
might arise out of your business affairs. Types of
business entities include sole proprietorships,
partnerships , limited liability companies (LLC) , and
corporations .
The type of business structure you choose can help
you minimize taxes, avoid legal problems, and reduce
your exposure to personal liability. Setting up the
wrong type of structure for your needs or failing to file
the proper state or federal documents can affect your
tax status or limited liability status.

Consulting with an Accountant and Business Lawyer
Before starting a business, it is often a good idea to
speak to an accountant and a business lawyer so that
you understand the tax and legal issues involved. If
you are a business startup looking for financing, you
will want to have intellectual property rights already
protected. A corporate or business attorney can also
review your business plan to see which type of
business entity is best for your situation and long-term
financial goals.