You’ve got a great business idea and the drive to make it happen. Congrats! Starting a small business is an amazing accomplishment that can bring financial independence, flexibility and a whole lot of satisfaction. But where do you start? What are the key steps you need to take to get your business up and running? Here are 5 things you need to do when starting your first small business:
1. Write a business plan
The first step in starting any small business is to write a business plan. This document will serve as your road map, laying out the step-by-step process for how you will turn your idea into a reality. Your business plan should address important topics like your company’s mission and values, target market, competitive landscape, financial projections, and more.
2. Choose the right business structure
Next, you need to choose the legal structure for your small business. This decision will impact factors like how much personal liability you have as the owner, how taxes are filed, and more. The most common structure for small businesses is sole proprietorship, but there are other options available, like partnerships, LLCs and corporations. The U.S. Small Business Administration (SBA) has a handy tool that can help you determine which structure is right for your new business.
3. Register your business
Now that you have chosen a name and legal structure for your small business, it’s time to officially register it with your state or local government. The process for registering your business will vary depending on where you live, but in most cases, you can complete the paperwork online in just a few minutes. Once you have registered your business, be sure to obtain any licenses or permits that may be required to operate legally in your state or locality.
4. Get a Tax ID number
A Tax Identification Number (TIN) is assigned by the IRS and used to identify businesses or individuals for tax purposes. If you will be hiring employees or opening a bank account in the name of your new small business, you will need to obtain a TIN from the IRS using Form SS-4.
5. Obtain permits and licenses
Depending on the type of business you are starting, you may also need to obtain specific licenses or permits from state or local governments before you can begin operating legally . For example, food businesses will need Health Department permits; retail businesses may need Sales Tax Permits; professional services businesses such as lawyers or massage therapists often need Professional Licenses; etc. The best way to find out which licenses or permits are required for your specific type of business is to contact your city or county clerk’s office.
Starting a small business is an exciting endeavor that comes with many challenges—but also rewards! By taking care of key administrative tasks upfront, like writing a comprehensive business plan and registering your businesses, you’ll set yourself up for success from day one. Similarly, obtaining any necessary licenses or permits, as well as getting set up with tax id numbers, are critical steps that shouldn’t be left until later on.
Do some research specific to your industry and locale ,and then take those first steps towards turning your dream into reality!