Every year, thousands of people decide to start their own business hoping to achieve greater independence, a great lifestyle, increased financial rewards, and more creative freedom.
However, running a business takes a lot of dedication, hard work, and planning. Before becoming a profitable enterprise, business owners first need to lay the foundations of their business venture.
Fortunately, there are several steps, which you can read about below, that new business owners can take to make the process simpler and faster.
Use an LLC Service
One of the first things an owner of a new business should do is legally register it, and to do this, many business owners opt to create a limited liability company (LLC). The process of creating an LLC can be complex and time-consuming which is why the business gurus at Boostsuite recommend using a professional LLC set-up service to help fill out all the forms, file the necessary paperwork and get a business operating within a week. Registering a business as an LLC will immediately provide owners with greater liability protection, tax advantages, and improved access to funding.
Write a Business Plan
Before a business starts operating, there should be a solid step-by-step business plan in place, detailing how the business will be set up and how it will achieve growth and profitability. There are several reasons why businesses must create a business plan early on, these include:
- Legitimizing and demonstrating the feasibility of a business model
- Obtaining funding and investments
- Creating a clear route to success based on achieving goals and objectives within certain timeframes
- Planning expenditure and cash flow
- Forecasting sales
- Determining staffing requirements
Developing a business plan is the only way to give a business strong foundations on which to build and grow, therefore new businesses must invest some effort and time into writing an in-depth plan. Business plans vary depending on the industry, however, the components generally included are:
- Executive summary
- Business description
- Market analysis
- Marketing strategy
- Marketing and sales plan
- Competitive analysis
- Management and ownership structure
- Descriptions of products and services
- Financial records and projections
- Funding request
Set Up an Accounting System
The basic measure of business success is making more money than you spend, which is why it’s vital to set up an effective accounting system to record and track all transactions.
Although some people may find the thought of accounting overwhelming, you can save time and effort by hiring an accountant, using specialized accounting apps, or recording incomings and outgoings on a spreadsheet.
You can use your business plan to guide managers and employees towards achieving a company’s aims and objectives. But you can also use it to raise funding and investment required for the setup and growth of a business.
New businesses can obtain funding and investments from several sources such as angel investors, bank loans, crowdfunding, friends and family, government agencies, grants, startup loans, and venture capitalists. These lending institutions often require a business plan before approving your application.
Choosing The Right Location
The physical location of a business has a big effect on many aspects of its operations including its ability to:
- Hire and retain quality staff
- Reach existing and potential customers
- Efficiently deliver products and services
When setting up a business, owners must consider their business location carefully based on several factors such as proximity to potential customers, rental price, local infrastructure, public transport, and access to suppliers. Additionally, the needs and requirements should be kept in mind, as an accountant is going to need a very different location and building compared to a restaurant.
Select Suitable Business Management Software
How a business is managed often determines if it is a success or failure, therefore it is vital that business owners set up an effective management system from the start. IT solutions have made managing a business much easier and more efficient, although software should be carefully selected to ensure it meets the needs of a business.
Key factors that business owners and managers should consider when purchasing management software are:
- Compatibility and integration with existing technology and software tools
- Functionality; can the software complete the tasks required?
- Scalability; will the software still be useful when the company grows
- Security; does the software come with built-in security features such as data back-ups and anti-virus tools?
- Reporting capabilities; can the software collate, analyze and present data to assist with decision making?
Depending on the type of business, the IT solutions implemented as part of a management system may focus on a range of business areas. These usually support employees with tasks such as data analysis, inventory management, sharing information, tracking sales, processing transactions, and storing key data.
Choosing and setting up the most suitable business management software from the beginning will ensure a business starts off organized and prepared for success.
Prepare to File Taxes
Filing and paying taxes is something every business must do according to laws and regulations, and preparing for them can seem daunting and stressful. Although there are some things a business owner can do to get ready for tax time, these include:
- Electing a classification for your LLC, the options are disregarded entity, partnership, S corporation, and C corporation.
- Keeping accurate and clear records of all daily transactions
- Keeping previous year’s tax records
- Completing tax forms early
- Hiring an accountant or tax expert to help prepare
Setting up a new business can be a daunting and overwhelming experience for most people due to the amount of planning and paperwork involved. That being said, there are various things a new business owner can do to make the process go more smoothly such as using an LLC service, writing a business plan, setting up accounting systems, and preparing to file taxes.