In today’s business environment, niches appear wherever you might be clever enough to look. The availability of resources since the proliferation of the internet into our functioning has made taking the steps toward financial independence and self actualization more accessible than any for any previous generation. If one were to have an idea in mind, however large or small, it is totally possible to achieve the goal of a functional working business. Onwards and upwards! A basic outline of the necessary steps you first have to take is as follows:
Business Model? Let’s Talk about a Financial Plan
First and foremost, making a business model doesn’t have to be that hard. On the other hand, what a good financial plan does have to be is thorough. Force yourself to think through all of the possibilities and it is generally a great idea to work with a few trusted colleagues. Research your industry, including keeping up to date on news developments using an unbiased source such as NewsWatchers or Newtrals. Find people you trust and are great in areas that you believe will be helpful to you and your business. Work through the beginning, from the idea and financing, to end, where you have a functioning business that has a long term direction predetermined.
As you work through your plan, there will be several key ideas you have to address. The first ideas probably include the source of initial capital, the identity of your target audience, marketing or distribution strategy, and estimates of duration before units sold or services rendered yields profitability. Further, you can include steps needed for maintenance over time, likely issues and solution procedures, liability concerns, financial institution affiliations and steps towards managing growth. As time moves on and you carry out your plans, it’s important to refer back to the model and keep it up to date. This will ensure you remember the original intentions of the business and just keep everything organized.
You will need decide how to classify the business ownership status. There are a variety of options that enable a wide variety of entities. This designation will have an effect on the procedures of the company and also how it is viewed by the government for taxation:
Sole proprietorship: A single-ownership designation where one individual has complete ownership as well as the full liability and profit share.
Partnership: A dual- or multi-ownership designation where two or more individuals cooperatively share responsibility for decision-making, liability, and profit share.
Corporation or S-Corporation: A multi-ownership designation which operates under state law.
Limited Liability Company (LLC): A hybrid designation that combines aspects of a partnership and a corporation.
Apply for an Employer Identification Number and Business Licenses
An Employer Identification Number separates a personal identity from a business. Obtaining one allows a business to receive funding or open an account from a bank. And happily enough, on the IRS website one can apply for an EIN at no cost.
Licenses are varied greatly by industry and location. Some businesses require one or multiple licenses in order to do business legally. The only way to know for sure is through extensive research into your particular location and industry. If you discover that there are licenses you need, it’s necessary to obtain them quickly before beginning operation. There’s always the possibility of legal repercussions for not cooperating with state or federal law.
Open a Bank Account and Find a Payment Processing Service
With your EIN and knowing you plan to fully operate within the confines of the law you can open a bank account reserved for business affairs. It is very important to avoid mixing business and personal financial affairs. As with any important decision, research is key to determine which bank or credit union is ideal for your business. A few good parameters are the account limits, customer service quality, and customer satisfaction when deciding to work with a company.
On the same leaf but the flip side, businesses generally require working with a credit card payment processing company that allows customers to yield payment through credit, necessary in this day and age if you plan on being paid by your customers. As processing companies are financial institutions, in some ways similar to banks, it’s vital to research the practices of the company you plan to go into business with. There are many options depending on the industry of your business. Many companies specialize in industries such as eCommerce services, while others are geared toward physical sales. As with anything, there are poor and high quality companies. Poor companies are more prevalent and focus on deceiving customers but there are some that shine through. Double Helix is an example of a processor that services multiple business types with in-depth, personal customer service and advice. Price, ease of use, and customer service are the three most important aspects for a client of a processing company, and a good company will help you find the ideal balance.
If you’ve made it this far you know that the whole ordeal is a learning process. Each hurdle is a lesson for the one to come, and looking back on what’s already happened can often give you a good understanding of how to handle something in the future. With continued persistence and constant update of your financial plan you can be assured that you are on the right track and are fully prepared for everything in your power.