Starting a new business is an exciting endeavour. It can also be overwhelming, especially if you’ve not done so before and are a complete novice.
To ensure you are best positioned for success and legal compliance, there are certain steps you must take and things you must do. Some of these apply wherever you and your business are located; others are location-specific (for example, if you have a startup in California).
This article will focus on steps to take for a California-based business, however, most of these may be applied to whichever USA state you will operate within.
Practical Steps for Starting a Business
1. Your Concept
At the foundation of any business is an idea – and your best opportunity for success lies in a commercially viable, unique, high-value-for-consumers concept.
2. Research
Once you’ve nailed down your concept, it’s time to do your research. Who is your target market? What are their “pain points”? How and where do they engage with their preferred brands? Who will your main competitors be? What are they selling, and how are they going about it? What will set you apart from – and above – your competitors?
3. Your Business Name
This is essential for identifying your business, standing out, attracting customers, and branding purposes, and you will have it for a long time – so you need to get it right. You need to choose a name that has not already been trademarked, and for which there is an available corresponding website domain name (as you MUST have a website). It must also be compliant with your local state’s Business Entity Name Regulations.
4. Your Business Plan
This goal-oriented document is important for remaining focused, organized, and it may be a requirement to obtain a business loan. There are resources available online to help you with creating your business plan.
5. Structure?
Is your business going to be a sole proprietorship, a limited liability company (LLC), or a corporation?
Sole proprietorships are simple, single-owner businesses, and are easy and inexpensive to set up. The owner, however, may be personally liable for debts and potential lawsuits.
LLCs offer a level of legal protection from liabilities and debts. They are preferred over sole proprietorships if you will hire employees.
Corporations separate individual owners from the business itself; this protects owners’ personal assets from any legal and financial liabilities. This is the structure to choose if you intend to start a large company, raise investor funds, intend to build and then sell a business, or seek utmost liability protection.
6. EIN
You will need to get an employer identification number from the IRS – which is basically your business’s social security number.
7. Registration
You’ll need to nominate/hire a registered agent to receive court documents if your LLC or corporation in the event of a lawsuit (this must not be yourself). Your business needs to then be registered with the state. Sole proprietorships aren’t required to register with the state of California.
8. Pay State Taxes
These are essential and may include Employment Training Tax, Unemployment Insurance, State Disability Insurance, and California Personal Income Tax Withholding.
9. Licensing and Permits
You may require a business license and/or zoning permits, seller’s permit, alcohol beverage control license, or others depending on the nature of the business you operate.
10.Insurance
It’s highly recommended that you invest in business insurance (even if you are an LLC); this may include insurance for General Liability, Workers’ Compensation, Professional Liability, or others.
11.Financing
Regardless of whether you seek a business loan to fund your startup, you will need to open a business banking account, acquire a business credit card, and keep all personal and business finances completely separate. It’s highly recommended that you contract a professional accounting and bookkeeping service provider to ensure your business remains compliant in terms of its tax obligations.
12.Branding & Marketing
Your brand is the face of your business and is imperative in attracting and converting customers. Inclusive of your logo, color scheme, tagline, voice and tone, brand persona, mission statement, objectives, goals, and values, and it defines and directs where you go as a business. You will need a business website to communicate with consumers and promote your business. A top Irvine marketing agency can help you with everything from branding to logo design, website design and development, content, digital and traditional marketing, video marketing, PR, advertising, and much more.
There are plenty of resources to be found online to help you navigate this overall process – so good luck and enjoy being your own boss!
