When entrepreneurs have decided to start their own company, it is important that they do some planning beyond determining what type product they want to make or service they want to provide. Some of the most important steps in running a successful business are ones that are taken before it is even established. Two essential steps are creating a business plan and determining the business’ structure.
A business plan, which covers things like an organization’s purpose and goals, is often required to obtain equity or debt financing, and there are a variety of Internet tools and software that can walk someone through this process. The plan will be taken into consideration along with available resources, financial protections and the credit history of those involved in starting the business when a lender is deciding whether to provide a loan.
Another important step is to determine what type of a business entity the organization will be. Common options include sole proprietorships, partnerships, corporations and limited liability companies. How the organization is taxed and who is responsible for debts depends on the type of entity that is selected. Once this has been determined, the appropriate forms will need to be submitted to the state to register the business. Some industries may also require licenses from state or local bodies.
Part of creating a successful business plan involves understanding what business costs are likely to be and the regulations an organization will face. Along with supplies and salaries, businesses will also need to allocate funds for a number of different taxes. A business lawyer can be helpful with the preparation and review of this important document.
Source: Houston Chronicle, “Recommended Steps for Opening a New Business”, Julie Duncan, accessed on Feb. 7, 2015