Laying the Foundation for Success
Starting a business is like building a home. If you want the structure to be stable, then you need to follow a precise plan. First you lay a foundation, then you build a frame to hold the basic elements in place, and finally, you hang siding, windows, doors, and decorations—the touches that will make the house unique.
Just as a home is made of brick and boards, a business plan is composed of actionable steps—financing, marketing, legal organization, and the accumulation of key assets. The value of a new small business increases exponentially as the unrefined, initial concept evolves to fit a profitable business plan. And in the end, the business that results is greater than the sum of its parts, just as a home is more than mud, stone, and wood.
The checklist below is a blueprint, a rough guide meant to help new business owners by providing a clear path from A to B to C. Depending on the nature of your business, some of the steps may not apply to you, but the list will help to focus your attention on essential items that are common to many start-ups.
The Business Plan
Your business plan explains the Who, What, Where, When, Why, and How of your new business. Who are you? Why do you believe your start-up will be profitable? What does your business sell? Where does your business fit into the existing market? How much funding do you need, and when will you be able to repay your debts?
A well-written business plan is a powerful marketing tool. It helps you to sell your concept to investors, including traditional lenders, and it helps you to recruit a staff that will add value to your business.
Financing is the single most critical step in the start-up process. Approximately 1/3 of all new small businesses fail due to undercapitalization. To ensure that your business has sufficient capital, you need to pursue several forms of financing such as with http://businessloansdirect.com/. This should include everything from loans and lines of credit, to venture capital, government grants, and crowd-sourced cash.
In order to build credit and capital for your business, you will need to establish a favorable credit history. Contact Dun & Bradstreet Credibility to request a D&B D-U-N-S® number, a unique 9-digit business ID required by more than 50 global, industry, and trade associations, including the U.S. government. Apply online and receive a free D-U-N-S® number within 30 days, or take advantage of an expedited service for a small fee.
Determine Your Business Structure
Your business needs to register with the appropriate government agencies, but first you will need to decide which form of ownership is the best fit for your venture: Sole proprietorship, partnership, LLC, corporation, S corporation, or nonprofit? Choosing to structure your business as a corporation or an LLC helps to protect your personal assets from any debts or liabilities associated with the business, but every form of organization has its advantages and disadvantages.
Now it is time to register with the government and apply for a federal Employer Identification Number with the Internal Revenue Service. The IRS provides a free service for entrepreneurs seeking to apply for an EIN. You can find the necessary forms on http://www.irs.gov, or you can contact the IRS by phone.
For more information on getting your start-up on its feet, you can visit the Small Business Administration’s webpage at http://www.sba.gov.
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