Starting a small business is an exciting venture, but it also comes with many challenges. If you’re not already familiar with accounting and business law, the early stages of starting a business can be stressful. Thankfully, there are resources at the federal, state, and community levels to help you get started. Read on for tips to make your start-up journey as smooth as possible.
Legal structure
An important first step in forming your business is to decide which legal structure suits you best. There are four main types: sole proprietorships, partnerships, limited liability companies, and corporations. To choose which structure will work best for you, analyze your business goals, financial needs, level of risk, and your ability to grow.
For example, if you’re starting a low-risk venture with low overhead (such as baking wedding cakes out of your home) and want to get up and running quickly, a sole proprietorship may be a good fit. However, if you’re creating a tech start-up with a large up-front investment and higher risk, you may benefit from choosing an LLC. This is because you won’t be personally liable for any business debt or losses should something happen to your business.
Accounting
Setting up accounting practices and getting a handle on your taxes are among the most daunting aspects of starting a business. Instead of trying to tackle it all yourself manually, consider handing these tasks over to a service. For example, payroll providers and software can simplify payroll management for you. They can also assist with other accounting tasks like tax filing and time tracking. Before choosing a service, make sure you assess your company’s needs and budget, and then compare plans and prices.
One way to make your business’s first tax season easier is to file for an EIN (or tax ID). Having an EIN allows you to more easily file state and federal taxes (either annually or quarterly), open a business bank account, apply for business loans, and hire employees. It can also help prevent identity theft because you can use an EIN with vendors and clients instead of your Social Security Number. You can complete your IRS business registration and secure an EIN online.
Funding
Finding funding can feel like one of the biggest obstacles to getting your business off the ground. However, there are many different options for entrepreneurs, such as bank loans, federal small business loans, grants from nonprofits, crowdfunding, and angel investment. Once you have developed a budget, research your funding opportunities.
Although it may not be the first option that occurs to you, crowdfunding can be a fun and effective way to raise capital for your business. Friends, family, and strangers pledge money toward your project through an online platform, such as Kickstarter or GoFundMe. Just be sure to research additional sources of funding if your company needs long-term support.
Marketing
Unless you already have a marketing background, it may be best to start simply. Consider joining your local chamber of commerce so that you can connect with other business owners in your area. Creating genuine relationships in the community can help form the fabric that supports your business for the long haul.
To get started marketing your business online, build a business website and create social media accounts. Then set up a business listing for your company on Google. Once you’re up and running, you can always hire a marketing expert like Olive Group to implement a more involved long-term marketing strategy.
No matter your background, there are parts of starting a business that won’t be much fun. None of us are experts at everything, so be patient with yourself while you learn. By systematically tackling the accounting, funding, legal structure, and marketing of your new company, you’ll be well on your way to launching a successful small business.