Steps to Starting A Business: Step One
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Steps to Starting A Business
Often when deciding to start a business it is easy to become panicked or overwhelmed once the decision is made, because there are so many details and items to complete. It is normal to be a little concerned because, after all, business ownership is a risk. I am speaking to those who have never owned a business, of course. Some may not even be sure of what steps to take first. Do not fear, we love assisting start-ups in their journey! This series will try to help those going through the Steps to Starting A Business. I am so excited for you as you start down this road. It can truly be freeing to own your own business. With that said, let’s discuss the initial, general, steps to starting a business.
“There is something special about realizing the Dream of Business Ownership!”
There are a number of first steps to take when setting up a company. In this series of articles, we will try to take you through some general steps and discuss how to accomplish these. Some of these steps may seem obvious or somewhat simplistic, however, it is a beginning and often we can overlook the simplest of things, even forgetting them, because our eye is on the ‘big picture’. We want you to realize that ‘big picture’ dream and our hope is that by guiding you through the practical steps, we may help you get to the beginning of your business success dreams.
Step One in Starting A Business:
Step #1: Decide What You Are When you begin a business, you will have needed to decide a number of things. One of those is what type of business you are creating.
1. What type of Company will you be? Determine, and even research these terms to decide what fits your company’s need the best. You will have to know if you will be a LLC, solopreneur, corporation or partnership. This often depends on the type of business, if you have a partner and if you are ready to invest a little money in a lawyer. [please keep in mind that the following are very brief, non-technical descriptions and always consult a lawyer if in doubt]
- Solopreneur – Can be a one person shop and even someone who is ‘DBA’, or ‘Doing Business As _______’. Usually, if you are DBA, you do not need to file for a Federal Tax ID, as you can use your Social Security number to ID your company as well.
- LLC – A Limited Liability Corporation – in general terms, this is for those who want to take the burden of fiscal & moral responsibility off their own personal (and even the home/family) and put it solely on the company. This is one of the most common types of corporations, especially for small businesses.
- General Corporation – There are numerous & specific types of corporations and as we are mostly geared to micro and small businesses with this series, I do not think it benefits us to go into details here. I will, however, say that if you want to create a corporation (including a LLC), it would be wise to consult a lawyer and pay for filing as a corporation, the business name search, and filing for a Federal ID.
- Partnership – simply put, it could be said, this is like 2 solopreneurs coming together to form 1. It does not have to involve only 2, it can involve multiple people. This can be formed as a ‘LLC partnership’ as well. It only means that there is more than one owner of the business. In other words, the business (profits, liability, assets & all) are owned by all within the partnership. Keep in mind that partnerships are not always a 50-50 split. It can be split anyway you agree upon . As an example, it can be split 20-80, or 95-5 and even 90-10 (not to mention multiple other combinations). Be sure to come to terms prior to paying a lawyer or anyone else first, this way you are not paying extra as you change your minds and go back and forth, with a lawyer involved, as you will be charged for each minute – even an email minute.
A Few Last Things
As mentioned, you should apply for a Federal ID for your company also. This is an ID number that will be associated with your company for the Federal government. This will be needed for multiple reasons, including opening a business bank account, filing taxes and more for your business.
Also, I would be remiss if I did not mention that there are many resources out there to help. The Small Business Administration through the U.S. Government is a wealth of information and even has links to some other steps to starting a business. S.C.O.R.E also offers many resources and mentors as well. Another great organization is the local Chamber of Commerce.
No matter what type of business you have, selling products or supplying services, you should take this first step. Making decisions that will affect the lifespan of your business is important and should be thought out thoroughly, prior to starting the company.
Watch for Step #2 to come shortly!
Thanks for reading and let me know what you think the next step should be…love to hear!
Disclaimer – We attempt to be thorough and provide up to date information, however, we are not a legal firm nor any State official office and do not claim to have all of the answers in regard to this topic. We will not be held responsible or liable for missing or inaccurate information or information that seems portray something not true; as we are relaying information in good faith to help others. We encourage you to also do your own due diligence and research to make sure you have everything you need prior to starting your business. We also think it is wise to consult with a business lawyer at some point in the process prior to opening your business up for operation to make sure your contracts, paperwork and everything else is in order for your State. We are not responsible for missing information or misunderstood passing on of information, or misconstrued information on the reader’s part. We only wish to help businesses in offering information we have found helpful. We will not be held responsible or liable, for any losses, perceived loss or anything else related to the ‘Starting a business’ blogs.