Before you quit your day job or print up business cards, ask yourself these questions: Am I a risk taker? Am I good at making decisions? Do I understand basic financial and marketing principles? Do I have any experience in the business I want to start? Can I support myself and my family while I get things started? If you answer ‘no’ to any of the questions, you may want to consider another career path. If you can answer ‘yes’ to most of the questions, then it may be time to get started. For a comprehensive look at what it takes, attend Starting Your Business, the first in UH SBDC’s regularly scheduled Start Smart, Grow Smart workshop series. All workshop attendees receive a copy of small business expert and syndicated columnist Rhonda Abrams’ Six-Week Start-Up.
It’s a plus if you have both business and industry experience. Having worked in the industry you choose for your business gives you insight and know-how that can up your chances of success. Add passion to the mix, and you are on your way to a profitable business.
Determine the practicality and viability of your business idea by doing a feasibility study.
Write a business plan to create an organized ‘roadmap’ of your business idea.
Do a cash flow analysis to see whether or not your business will generate enough cash to pay its expenses.
Select the best legal structure for your business.
Obtain the licenses and permits required for your business to operate.
Determine employee and/or contract labor needs and required documentation.
Analyze your capital needs and whether you have the credit, collateral and equity to support a loan request.
Research the type of federal, state, and local taxes your business will pay.
That depends on the legal structure you choose for your business. If you decide you’ll operate as a sole proprietorship and use your name for the business, you can use your social security number as the business identification number. Using a different name and/or hiring employees requires obtaining an Employer Identification Number from the IRS. Find Form SS-4, the EIN application, at irs.gov, or apply online.
Safeguard your investment and minimize the financial risks associated with events such as a natural disaster, lawsuit, or data breach with a well-planned insurance program. The key is to know your specific risks and the types of insurance that will mitigate those risks. A current popular option is a package Business Owner’s Policy that covers General Liability, Property and Business Income Insurance. Visit the SBA’s website or speak to your insurance agent to learn what other types of coverage would be best for your particular business.