According to Forbes, more than 500,000 small businesses open each month. If you're looking to join the entrepreneurial club, consider this planning guide for starting a small business.
Laying the Groundwork
It's important to have a well-developed business proposal that meets an untapped need. Follow these steps to think yours through:
- Decide on a business idea. Think about your strengths and interests: What could you do forever? What could you never do? How do you feel about interacting with people or spending your time at a desk? Ask yourself these questions to narrow down your business ideas and options.
- Research market demand and competition. You should feel confident that your product or service will have a hungry audience and that you can offer it in a better way than your competitors.
- Write your business plan. You'll need the following components :
- Executive summary
- Organization and management
- Funding requests
- Company description
- Service or product line
- Financial projections
- Market analysis
- Marketing and sales plan
- Separate your business and personal expenses. While it can be tempting to keep all your finances together, especially when there aren’t too many biz expenses at the beginning, it won’t be simpler down the road.
Setting Up Shop
Before getting your small business up and running, you'll need to complete the following legal requirements. Consult an attorney and/or accountant for guidance relevant to your specific situation.
- Decide your business structure. Is your business a sole proprietorship or a partnership? The Internal Revenue Service (IRS) can provide more information on types of business structures.
- Most states require you to apply for one or more licenses, permits or identification numbers. Learn more about the small business requirements for your state.
- If you plan to employ people to help run your small business, you'll need to apply for employee identification numbers through the IRS.
- Determine whether you will use the calendar year or a fiscal year for taxes.
Also talk to your State Farm® agent about special small business insurance needs. You'll want to do your best to protect the investments you've made, and important coverage can vary by business.
State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates) is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites hyperlinked from this page. State Farm has no discretion to alter, update, or control the content on the hyperlinked, third party site. Access to third party sites is at the user's own risk, is being provided for informational purposes only and is not a solicitation to buy or sell any of the products which may be referenced on such third party sites.
The information in this article was obtained from various sources not associated with State Farm®. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. These suggestions are not a complete list of every loss control measure. The information is not intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. Nor is it intended to effect coverage under our policy. State Farm makes no guarantees of results from use of this information.