In this article, Mitch Zelman will look at six steps that you will need to take in order to open your own business. However, before you begin the process, you should always find out whether any license or certification is required to start your business. This can vary from state to state, so you must know the requirements before moving forward. In addition, make sure that you have an accountant on hand who can help answer questions and prepare your tax returns for your new company.
1. Determine the Type of Structure for Your Business
One of the first things you will need to decide on is the type of business structure you want for your company. This will determine how much liability you are personally responsible for, and it will have tax implications, so it is important to make a wise decision. The four most common business structures are Sole Proprietorship, Limited Liability Company (LLC), C Corporation, and S Corporation.
- Sole Proprietorship: This is the simplest form of business, and it is ideal for small businesses that are just starting. With a Sole Proprietorship, you are responsible for all debts and liabilities incurred by your company.
- Limited Liability Company (LLC): An LLC offers some protection from personal liability, which is why it is a popular choice among business owners.
- C Corporation: A C Corporation offers the most limited liability protection to its shareholders. However, there are some disadvantages to this type of structure, such as double taxation on profits.
- S Corporation: An S Corporation combines many of the benefits of a Sole Proprietorship and an LLC while avoiding the double taxation of a C Corporation.
2. Register Your Company Name
Once you have determined the type of business structure you want for your business, it is time to register your company name with your state government. This can be done through your state’s Secretary of State website. Be sure to search for similar company names first to ensure that your company name is not already taken. This can be done through its website or by visiting your local Secretary of State office in person.
3. Hire a Lawyer to Help You with Legal Issues
If you have any legal issues, it is best to have a lawyer on retainer who can offer guidance and expertise. This is especially important when starting a new business, as there are many laws and regulations that you need to be aware of. By hiring a lawyer, you can avoid potential legal issues and put your mind at ease. This is especially important if your business is sued for some reason.
4. Find a Location for Your Business
Next, you will need to find a location for your business. Mitch Zelman notes that an ideal location is near other businesses for added traffic from nearby establishments. In addition, try to choose a location with plenty of parking available as this will help attract more clientele. Ensure the space you are considering has plenty of storage space for files, equipment, and other business items.
5. Build Relationships with Businesses in Related Fields
It is also helpful to build relationships with local businesses in related fields, because this provides an opportunity to gain referrals and to give referrals. Once you build a relationship with other companies and they see the level of service you are providing, they will be more likely to refer clients to you. This is especially true when you refer clients to them as well.
6. Begin Networking Within the Industry by Attending Events or Joining Professional Organizations
Finally, start networking with other professionals in your industry by attending events or joining professional organizations. You can also make valuable connections through networking websites, such as LinkedIn. Having good relationships with other professionals will allow you to learn from their experiences and mistakes, which will help you avoid making the same mistakes yourself. This is also a great way to make connections that could lead to future business opportunities.
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Really helpful points!