Businesses begin with an idea and desire and are then formed in steps. Many of the initial steps in starting a business are free or inexpensive and can be done in your spare time. Since a large part of forming a business involves research and analysis, the sooner you start, the better. Here are the first steps to take to become an entrepreneur.
Prepare a Comprehensive Feasibility Study
Feasibility studies help you identify the cash you will need to start and operate your business, study the competition and market, and map out the logistics of the day-to-day operations of your business. Feasibility studies serve as a great foundation to build a business plan and serve as trouble-shooting guides.
Write a Business Plan
Every business needs a business plan. A business plan serves as a road map to where you have been, where you are, and where you are heading. Most lending institutions and investors will require you to submit a business plan.
Choose a Business Structure
There are advantages and disadvantages to every type of business structure. Sole proprietorships are simple to start, easy to dissolve, and have some great tax advantages, but they also carry the most liability risks for the sole proprietor. Corporations require filing articles of incorporation, bylaws, and forming a board of directors, but they offer minimal exposure to liability risks.
Other types of business structures include partnerships, joint ventures, S corporations, and tax-exempt nonprofits. Research the pros and cons now to avoid financial and legal hardships later.
Choose a Name For Your Business
You should give considerable thought to naming your business. Make sure the name you choose allows for future growth. For example, "Joe's Dog Walking Services" will not be a good name for your business if you branch out into pet sitting and services for other animals in the future. Don't be too clever.
If your business' name is too hard to spell, pronounce, or remember it will be a liability not a draw. Ask family and friends for ideas, and be sure to consider your business name acronym, too. "Ann's Sexy Sportswear" immediately tells you a lot about her business, but she will never be able to use the acronym.
Get a Business License
Depending on the type of business you operate and your local jurisdiction's requirements, your license may have limitations on the hours or locations you can operate your business. Many cities have additional requirements for obtaining a business license if you use a fictitious name. A fictitious name is one where no part of your legal name appears in the name of the business. For example "Ye Old Flower Shop" is a fictitious business name, but "Sally's Flower Shop," would not be. You may be required to file a fictitious name statement and run a public announcement in a newspaper for several weeks before you can register a fictitious business name.
Get a Domain Name and Start Working on Your Website
Very few businesses today can get by today without having a website. Start working on one now.Start Networking
Learn how to use Twitter, professional and social networks (i.e. Linked In, Plaxo, and Facebook) to help you beginning networking to build your business.
Attend business networks and share ideas and contacts. If you are even thinking of going into business, it is never too soon to start networking.
Research Copyrights, Patents and Trademark
If your business or products will need a patent or trademark - start now. Research and applying for patents and trademarks take time and money.
Due to personnel shortages, the Patent and Trademark Office announced in late 2008 that it is now several years behind in processing applications already submitted.
Start Looking for Venture Capital and Investors
It takes time and energy to find the right sources of start-up funding. Even if you are only in the planning stages, as soon as you have your business plan together you can starting raising capital. Take time now to start locating sources of small business loan, business incubators, angel investors, government grants, and other sources of cash.
If your personal assets are going to be the main source of funding for your business, pay off personal debt now and start building up cash reserves as soon as possible in preparation for when you do quit your job. A general rule of thumb is to have twelve months of cash in savings that you can live off comfortably form until your business starts to generate income for you.
