How to Start a Small Business

3. Start Developing a Business Plan

Now, it's time to start developing a business plan. This will help explain your goals and how you plan to achieve them. You'll want to consider including things like start-up costs, potential options for funding, descriptions of your product or service, value propositions, marketing strategy, target audience information and other small details that go into running a business. It may take some time, but the more detailed your business plan is, the better. Sections in your business plan may include:

• Executive summary
• Company description
• Market analysis
• Organization and structure
• Mission and goals
• Products or services
• Background summary
• Marketing plan
• Financial plan

4. Think About a Business Name

While developing your business plan and strategy, you should also start to brainstorm options for a business name. Your business name is important, as it will be the base for branding, marketing and future company reputation or customer loyalty. You don't need to be completely sure of your name yet, but starting the brainstorming process early is a good practice. You will also want to confirm with the state agency of name availability and other registration and naming requirements.

5. Consider the Business Structure

As part of your business plan, you'll need to define your structure. How your business is set up may impact future tax and legal implications, so this is one of the most important decisions you'll need to make. You should speak with a tax advisor or business attorney on what the best options are for your new business. Some options for business structure include:

• Sole Proprietorship - this is a common business structure for individuals who want to be a solo entrepreneur. This would mean that your company and the owner (for tax and legal purposes) are the same, and the business owner assumes full liability.
• Limited Liability Company (LLC) - this structure can be owned by either a single business owner or a partnership. The owners are considered "members".
• Partnership - this is a business owned and operated by two or more individuals.
• Corporation - this is a more complex structure that many larger companies use. You may also consider electing S-corporation status, which will require an Internal Revenue Service application and your business must meet certain requirements.

6. Look Into Finance Options

Another important step in starting a business is learning about your finance options. You'll need to be able to cover start-up costs and operating expenses. Some of the most common options for small businesses include:

• Small Business Loans - these can be good for business owners who want full ownership of their company but don't have enough for self-funding.
• Business Grants - some small businesses may be eligible for federal grants through local or regional organizations. You'll need to meet certain criteria to be eligible.
• Investors - investors may be a good option; however, you may need to give up an ownership portion of your business or share future profits. Investors may be able to help fund your business but usually require some stake in the company.
• Crowdfunding - this allows you to raise money from a group of people through donations or a portion of equity in the company.

7. Obtain the Necessary Permits

Depending on the industry of your business, you'll likely need a few different licenses or permits. These will be required for legal operation, so don't skip this step. Each industry will require specific licensing or permits, and some companies may also require federal licensing. You should speak with a business lawyer about what federal, state and local licensing you may need.

8. Fill Out the Necessary Documents

There's a lot of paperwork that goes into starting a small business. You'll need to make sure that you fill out the required documents and submit them to the proper agencies. These can include:

• Limited liability company (LLC) paperwork (if applicable)
• Incorporation documents (if applicable)
• S-corporation election application (if applicable)
• Partnership agreement (if applicable)
• Doing business as form (DBA) (if applicable)
• Necessary license applications
• Permit applications, both state and local
• Income, sales, use, franchise and other applicable business tax licenses and accounts
• Trademark registration
• State and local tax account applications for unemployment, withholding and other applicable state and local employment taxes

9. Register with the IRS

In order to start operating, you'll need to apply for a federal employer identification number (FEIN) with the IRS. This can be done quickly online.

10. Open a Small Business Bank Account

Once you've figured out funding options, it's time to open your very first small business bank account. You should consider separate funds for personal and business, which is important for both tax and legal purposes. You will need to give the bank your legal business name, FEIN and other documentation ) when opening a small business bank account.

11. Purchase Insurance Coverage

To help safeguard your business and adhere to state or federal requirements, you'll need a to consider certain insurance coverages for your small business. Some possible coverages include:

• General Liability Insurance - general liability covers things like negligence, injuries, or accidents that happen at your business.
• Professional Liability Insurance - small businesses that offer a service should carry professional liability insurance in case of any errors or issues. This will safeguard you from several types of lawsuits.
• Product Liability Insurance - small businesses that offer a product should carry product liability insurance in case of any manufacturing or distribution issues that may cause injury or bodily harm. This will safeguard you from issues that arise from defective products.
• Workers' Compensation - workers' compensation is mandatory for certain industries and employee count and it varies by state law. Workers' compensation, in general, provides your employees with onsite injury or illness coverage.
• Commercial Property Insurance - this is a type of insurance that covers property damage.
• Cyber Liability Insurance - this is a type of insurance that provides coverage for cybersecurity and data breaches for your business.

12. Figure Out Payroll and Accounting

Once you get all the logistics done with setting up the business, you'll want to focus on your internal operations. The first step here will be to figure out payroll and accounting, as you can't hire any employees until you do. Payroll and accounting can be a bit difficult, but working with a professional employment organization (PEO) such as TriNet can help provide the payroll processing services and guidance you may need.

13. Choose Your Benefits

The type of benefits you offer your employees will also play a role in your overall company's success and growth. Top talent is attracted to big-company benefits, including health insurance, retirement plans or non-traditional benefits. A PEO can help you offer your employees access to attractive benefits without expending too many resources.

14. Hire a Human Resource Expert

Rather than hiring an internal HR department, consider outsourcing. Outsourced HR experts work with small to medium-sized businesses to help with HR support that is cost effective and help with turnover and generate more opportunities for revenue growth.

Starting a small business is not an easy venture, but it's worth it in the end. While it will require long hours and late nights, there are ways you can help offset employee management while boosting overall experience. When you work with TriNet, SMBs can gain access to traditional healthcare and insurance benefits alongside a variety of non-traditional benefits that don't break the bank. Learn more about how TriNet can help support you on your business journey.

This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance.

This post may contain hyperlinks to websites operated by parties other than TriNet. Such hyperlinks are provided for reference only. TriNet does not control such web sites and is not responsible for their content. Inclusion of such hyperlinks on TriNet.com does not necessarily imply any endorsement of the material on such websites or association with their operators.

Public link

Please use the above public link if you want to share this noodl on another website.