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 yourbusiness plan.
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
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.
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