STARTING A SMALL BUSINESS

What do you need to start a small business?
Every successful business started from the ground up.No matter how eager you are to get a product into market,taking the time to create a solid foundation now will help increase the chances of your business surviving long term.Some of the basic things you may need to start a small business include:
1.Idea backed by market research
2.Business plan
3.Funding and bank account
4.Business structure
5.Doing business as (DBA) name
6.Employer identification number (EIN)
7.Business location
8.Licenses and permits
9.Insurance policies
Starting a business from home:-
Many entrepreneurs start a small business because they like the idea of working from the comfort of their home and setting their own hours. And while this is a great perk, it also limits the type of business you can create. Manufacturing products, for example, might not be feasible from your living room. Additionally, you may need to consider the zoning and legal restrictions in your particular neighborhood, and how your business will affect your neighbors and those who live with you.
How to start your own small business:-
Taking an idea to market or making a dream become reality typically takes a series of carefully planned business decisions. While not every business follows the same path, most take some of these steps:-
Step 1: Perform market research around your idea:-
Market research can help you mitigate risk because it lets you know how much of a demand there is for your product or service and the level of existing competition. It also provides demographic information on your target customers, such as their income and where they live.
You generally have two options when it comes to research – review existing sources or conduct your own analysis. Relying on previously gathered data can save you time and money, but it might not be current or specific enough to your target clientele. If you start your research from scratch, you have the advantage of engaging with customers directly through focus groups, one-on-one interviews and surveys.
Step 2: Create a business plan:-

A business plan explains your goals and how you hope to achieve them. If you need funding for start-up costs, many investors will want to see your plan so they can assess your potential profitability. Business plans can also help you attract partners and employees.

When creating a business plan, you can take a traditional approach or create something lean.Traditional plans have comprehensive details and are often required to achieve a business loan. Lean plans, on the other hand, are shorter and may use more charts than written copy. They are often ideal for simple business models that plan to start up fast.
Whichever plan you choose for your new business, most include at minimum:-
A description of your product, it’s value proposition and how you plan to market it
How much investment you require and the amount of revenue you expect to make
Your target audience and the customer experience
Step 3: Finance your business
Start up costs are one of the obstacles that sometimes prevent people from ultimately pursuing their dream.The good news, however, is that even if you don’t have much money at your disposal, there are several ways to fund your business, including:-
Bootstrapping
Self funding is advantageous because you maintain complete control of your business.On the downside,it sometimes comes with the highest personal financial risk.
Small business loans:-
If you don’t have enough money,but still want to keep full ownership of your business a loan might be advantageous.Be prepared to show banks and credit unions a comprehensive business plan, as well as your estimated expenses and financial projections.
Crowd funding
Some people invest in a business in exchange for perks, as opposed to a share of the profits or company ownership. Because these perks are usually merchandise or name recognition, your business may need to be in the general consumer product or creative industries to take advantage of crowdfunding.
Step 4: Choose your business structure:-
How you plan to structure your business sole proprietor,corporation or something in between will typically have legal and tax implications for the foreseeable future.That makes this decision a critical one. Some of the more popular business structures are:-
1.Sole proprietorship:-This is the most common structure for solo entrepreneurs or “solopreneurs.”
2.Partnership:-If you are starting a business with one or more individuals, then a partnership structure might be right for you.
3.Limited liability company:-An LLC blends the limited liability features of a corporation with the tax efficiencies and operational flexibility of a partnership.
4.Cooperative:-A cooperative is a business or organization owned and operated for the benefit of those using its services.Companies in health care,retail,agriculture,art and restaurant industries fall in this category.
5.Corporation:-Corporations are more complex from a legal and tax standpoint and are therefore more common among larger companies.
Step 5: Choose your business name:-After you have determined your structure,it’s time to decide how your business will be recognizable to the public.Your business name shouldReflect your brand and values,
Convey the services you provide or products you sell
Work as a logo and resonate on social media and other marketing platforms
You shall also want to make sure your business name is not already taken.Contact your state filing office or search your state online database to verify availability.
Once you have settled on a name that suits your organization and confirmed its availability,you should trademark it and purchase a recognizable version of it as a domain name.Then,create a presence on social media channels (LinkedIn, Twitter, Facebook, Instagram, etc.) by opening accounts with your business name.
Additionally,some business structures require a doing business as (DBA) name,which is a fictitious or assumed name that’s different from your business entity name. A DBA may sometimes be necessary to open a business bank account.
Step 6: File registration documents:-Registering your small business with the government may not always be necessary, but it might avail you to personal liability protection and legal and tax benefits.
1.Federal registration:-Other than a tax ID number, you usually do not need to register your business with the federal government unless you’re applying for tax exempt status or trademark protection.
2.State registration:-You may be required to register in the state where your business was formed and any other states that you operate in also known as foreign qualification.Registration documents vary by state and business structure.
A.Business name
B.Location
C.Owner or management structure
D.Name of registered agent
E.Total number and value of shares, if applicable
F.Local registration
Most local governments do not mandate that businesses register with them,but certain business structures may need to apply for licenses or permits.
Step 7: Apply for EIN or Tax ID
As soon as your business is registered, you might want to apply for an employer identification number (EIN) from the IRS.This number is necessary so you can file your federal taxes,hire employees and in some cases open a business bank account.You can apply for an EIN on the IRS website.
In addition,some states have their own tax ID numbers, which you may need to pay state income tax and unemployment tax.Check with your state for the specific application process.
Step 8: Open a small business bank account:-
You are going to need somewhere to deposit all those hard earned money, but what type of account best fits your current requirements and future goals? Given that you are just starting out,you may need:-
1.A simple checking account with no or low monthly fees
2.A bank that offers convenient locations and hours of operation
3.Online banking and mobile apps to help you manage your money on the go
4.Loan products should you need some growth capital now or in the future
5.How to open a bank account
6.After you have found a bank that suits your needs, gather the necessary paperwork to open a business account:-
7.Official business formation documents
8.EIN or tax ID numbers
9.Business name and location
10.Date the business was established
11.Business owner’s Social Security number, address and date of birth
12.How to apply for financing
Particularly at the start,you may need to apply for a business line of credit to keep things moving.These short term loans are useful for bridging temporary working capital needs,such as inventory purchases or operating expenses.
To apply for a line of credit you usually need to provide the bank with proof of revenue.If approved, they may set a limit, which like a credit card,allows for continuous borrowing and repayment within the agreed duration of the loan.
Step 9: Obtain any necessary licenses or permits:-
Before you open for business, take a moment to make sure that you have all the correct licenses, permits and insurance policies to operate legally.The last thing you want at this stage is to be shut down by a government agency.
Which licenses and permits do you need?
If your business operates in certain industries,such as agriculture and broadcasting,you might need a federal license. Other industries,like health care,typically require professional licenses.Even if you don’t fall into one of these categories, you may need some form of permission to conduct business.Freelancers and consultants,for example,sometimes have to have a home occupation permit.
Which insurance do you need?
Your insurance needs will depend on what type of business you have, but there are also requirements that vary from state to state.Examples of types of insurance you may need to consider include:-
Workers’ compensation Mandatory in most states,workers compensation provides coverage for on the job injuries or illness.Employees typically receive wage replacement and medical benefits in exchange for mandatory relinquishment of their right to sue for negligence.
General liability insurance:-This insurance usually covers accidents, injuries and claims of negligence.
Product liability insurance:-Often essential for businesses in manufacturing or distribution,product liability helps protect against financial loss due to a defective product that causes injury or bodily harm.
Professional liability insurance:-If you provide a service, professional liability or errors and omissions insurance,helps safeguard you from malpractice and negligence lawsuits.
Commercial property insurance:-Property damage and loss caused by fire,smoke,storms,vandalism and other events are usually covered by commercial property insurance.
Business owner policy:-Designed for small and medium-sized businesses,BOP combines general liability insurance and property insurance into a single,more cost effective policy.
Step 10: Choose your accounting and payroll system:-Before you make an initial sale or hire your first employee, you most likely need a method of managing your finances and paying the people who work for you. You can tackle these important tasks yourself using spreadsheets,hire an accountant or work with a payroll provider.
If you are a solo operation or only have a few employees a manual approach to payroll may save you money. It is, however, time consuming and comes with the most risk because you could be fined for mistakes.Hiring an accountant might give you more peace of mind, but they’re usually expensive and you may lose some control of the process.A payroll provider on the other hand is often the best of both worlds giving you control and risk reduction while also saving you time.
Payroll providers like ADP offer products that in most cases,can automatically pay your employees,file taxes on your behalf and help you comply with applicable government regulations.Our payroll also seamlessly integrates with many types of accounting software so you can manage your finances from one place.A provider like ADP serves business of all sizes so whether you need payroll for a small business or something larger, we can help.
Step 11: Create a web presence:-Since most customers use the internet to search for goods and services, a helpful and attractive website can be an integral piece of your marketing strategy. The ideal web presence should:-
1.Engage your target audience
2.Include key terms for search engine optimization (SEO)
3.Display your business logo
4.Have creative content
5.Integrate social media channels
Although there are some platforms that allow you to build a site with little or no development knowledge,it may be worth hiring a professional if you want to present a truly polished image of your business.Look for digital agencies who specialize in helping small businesses because they are usually more likely to understand your needs and meet your budget requirements.
Starting an online business:-
A website is even more critical if your business will be conducted entirely online.You have several options in this regard:-
Ecommerce store:-Sell your own inventory of products directly to customers.
Drop shipping:-Work with a third party distributor to fulfill your sales orders.
Affiliate marketing:-Drive traffic to ecommerce sites and make commission on sales.
Blogging:-Create engaging content that generates revenue from advertisements.
Step 12: Choose retirement and health insurance plans:-You might want to review your health insurance and retirement plan options as soon as possible because they can help you attract employees.Even if you do not or won’t have employees,you may still want to consider benefits for yourself as the business owner.