Every year thousands of entrepreneurs across the nation launch their own new business. If you’re ready to start your own business, here’s a step-by-step overview of what you need to do to make your vision become a reality.
1. Start with an Idea and Brainstorm. Perhaps, you’ve already zeroed in on a product or service for your new startup. While having an idea is a good start, it’s important to brainstorm that idea. Is there a demand for the product or service? Who is your target market? Are there additional related services or products that can be tied into the primary offering? Thinking about potential problems and having solutions in place will also help your launch run more smoothly. The key takeaway with brainstorming is that it’s a powerful tool which will get you to think critically about your idea.
2. Draft a Business Plan. A business plan is the road map of your new business. It defines and clarifies the direction of your business, products or services, and defines your customers. It’s also an effective way to plan for market changes and focuses on your future vision for company goals. When drafting your business plan, be sure to include facts, statistics and figures that support your idea. This will better help attract investors, partners, suppliers and executive-level employees for your new venture. The typical business plan averages 15 to 20 pages and includes an overview, basic business description, development, competition analysis, management, market strategies and financial information. A business plan is required to secure funding at the startup phase and is your map to the future.
3. Fund Your Business. To turn your dream idea into a viable business, it’s going to take money. There’s no magic bullet here, so you’ll have to explore your resources and determine which one is most attractive. You can opt for a line of credit or a bank loan, just keep in mind that you’ll have to have a solid credit history or existing assets to put up for collateral. Another option is to join a startup incubator. Organizations like NorthAmerican Transportation Association (NTA) not only provide free resources to startups, but seed funding. Some startups find funding from local angel-investor groups. Most big cities have groups of angel investors who are looking to support startups, and willing to fund up to millions of dollars for qualified startups. One of the newer ways to get funding is to launch a crowd-funding campaign online. Online sites like Kickstarter gives you the opportunity to have folks make pledges for your startup. Other ways to garner monies for your new company include getting a small business grant and/or asking strategic partners, friends or family members.
4. Select an Accountant and Attorney. Both an accountant and attorney should be on your startup team. NTA can help you in both of these categories. Entrepreneurs must keep endless amounts of records for tax and legal purposes. An accountant can provide you with a wide range of services through the early stages, including business entity selection, expense tracking, business licenses, financial planning, month-end accounting, tax preparation, an accounting system, W2s and 1099s. Outsourcing an accounting firm lets you focus on your core business instead of non-core business. Accountants are also essential when it comes to raising funds, structuring deals and financial reporting. An attorney adds value to a startup in a variety of ways. Not only does an attorney assist with entity formation, they help you work with the government, third parties and other company founders. You don’t want to violate any laws, and an attorney will keep you on the right side of the law. They help you draft the legal documents to control risk with suppliers, protect intellectual property rights, employees and customers. Plus, they can assist multiple founders of a startup in drafting up agreements that outline the rights and duties of each.
5. Apply for a Tax ID and State Sales Tax Permit. You’ll need to fill out a tax identification application to get your tax ID. This number identifies your business on all types of documents. As a matter of fact, most banks will require your tax ID before you can apply for a business loan or set up a business checking account. You can apply for a tax ID at the IRS website. Just print out a copy of the SS-4 form. And if you’re selling any services or products that are subject to sales tax in your state, you must collect that tax from your customers and pay it to the state. It’s important to note that if you have more than one location for your business, you must obtain and display a Sales and Use Tax Permit in each location. If you are starting a transportation company, you must understand that you will eventually be dealing with 17 to 20 different state and federal agencies. Therefore, for the help you will need, you should join either your local state association or the NorthAmerican Transportation Association, which is nationwide.
6. Obtain a Business License. Your new business may need a business license in order to operate legally, even if you’re operating from home, depending on the state. You can find all the information to do this at the SBA website or your city’s business website. You’ll need to know your business code. Different codes require a specific application process, and each city has its own set of requirements and rules. Generally, you’ll have to provide your federal ID number, type of business, number of employees, business address, all contact information, and the name of the business owner.
7. Know the Labor Laws. Workers Compensation coverage is required for businesses with more than three employees. If you have more than three employees, you’ll need to attain workers comp on a self-insured basis, through a commercial carrier, or through the state Workers Compensation Insurance program. Employers are also required by federal and state laws to display posters in the workplace that inform employees of employer responsibilities and employee rights under labor laws. You can easily attain these posters free from state and federal labor agencies. If you choose to use the services of independent contractors, you’ll need the assistance of an organization that has the expertise in this area, such as the NTA.
8. Choose a Location. Deciding where to set up is a critical decision. The real estate mantra of “location, location, location” has merit for a successful business venture. You’ll want to ensure that the area has the human resources to meet staffing needs. For example, if your startup will be focused on detailed work, you most likely wouldn’t want to choose a rural area for its location. Always investigate the available labor pool in your chosen area. Determine the demographic profile of your location – you’ll need to know who your customers are and where to find them. This is important if you’re a retailer or a service provider. If your customer base is local, you need to ensure that there is a sufficient percentage of the population that needs your product or services to support your business. The area you choose should also have a stable economic base.
Launching a new business takes a lot of planning and effort. Follow these steps, and you’ll be in good shape to tackle the task. And, if you didn’t notice, we here at NTA can help you with every step along the way. Call us at (800) 805-0040 today and get 2016 moving in a positive and exciting direction. You can do it!