Starting a New Business – What to do First

You are finally fulfilling a dream for YOU – starting your own business, one of the most fulfilling endeavors you will ever do. While it is thrilling to dream, it is essential to be realistic when starting this process. Knowing what you want to do with your new business doesn’t necessarily mean you know how to start a business. Rest assured, we’ve got you covered with a step-by-step process of how to begin and what to consider when drilling down your business idea.

When business ownership is the end goal, it is essential to consider the following questions: Do you have a great business plan? What part of your savings do you want to utilize for start-up costs? What does success look like? How much do you need to make to break even? To make a profit?

Owning a business can be an exciting time, and you don’t necessarily need a college degree or a large bank account to get started. You do; however, need a plan and some grit. Odds are that if you’re reading this post, you already have what it takes to be successful.

Business Structure
To begin, you must decide what type of business structure you want to be listed to the public. For example, you can choose from a sole proprietorship, LLC, or corporation, to name a few.

Sole Proprietorship
The most common form of a business organization is considered a sole proprietorship as it is easy for one owner to start. For starters, the government does not require paperwork, nor do you need to register with the IRS. You may find that this route is the easiest to create, and offers complete managerial control to the owner. Sole proprietorships are not taxable entities and require adding the Schedule C (“Profit or Loss from Business” form) to their tax return when filing. Additionally, the owner is also personally liable for all financial obligations to the business.

A partnership involves two or more people who agree to share not only the profits but also the losses of a business. Interesting to note, if two people are starting a business, the IRS automatically considers it a partnership whether you do or not. Taxes provide one advantage when considering a company. They do not bear the tax burden of profits, or the benefit of losses. Profits or losses are “passed through” to partners to report on their individual income tax returns. A primary disadvantage is a liability. Each partner is personally liable for the financial obligations of the business. Considered the most flexible business structure for a company that involves more than one person, partners to have to file an informal IRS Form 1065 with their tax returns.

Additionally, a corporation is a legal entity that is created to conduct business. This branch becomes an entity separate from those who founded it and handled the responsibilities of the organization. Just like an individual, corporations can be taxed and held legally liable for their actions. They can also make a profit. One main benefit of considering a corporate status is avoiding personal liability. The primary disadvantage is the cost to form a corporation and the extensive record-keeping that is required. While some consider doubling taxation a drawback to incorporation, the S corporation (or Subchapter corporation, a popular variation of the regular C corporation), avoids this situation. This status allows income or losses to be passed through on individual tax returns, similar to a partnership.

Limited Liability Company (LLC)
Finally, let’s talk about the Limited Liability Company or LLC as it a hybrid form of partnership and is gaining popularity within the business world in terms of the law. An LLC is a business type that falls in between a corporation, a company, or sole proprietorship. By selecting this version of business, it allows owners to take advantage of the benefits of both the corporation and partnership forms of marketing. The advantages of this business format are for the profits and losses can be passed through to owners without taxation of the market itself while protecting owners from personal liability. In most states, LLC owners get legal protection from lawsuits like a corporation. Reporting requirements for LLCs are not as strict as they are for a corporation. LLCs do not have to pay corporate taxes or file all the forms required of a corporation. The IRS treats LLCs as a partnership or sole proprietorship unless they specifically ask to act as corporations.S or C Corporations
Considered separate legal entities, owners are protected from claims against the corporation’s activities. However, it is not easy to establish oneself as an S or C corporation due to the obligations and resources needed to pay the required legal and accounting services. Here are the different times of corporate structures:

  • S corporation – Has fewer than 100 shareholders but functions as a partnership and gives owners additional legal protection.
  • C Corporation – Considered a separate legal entity that files its tax returns. Viewed in court as a person, owners must split their ownership through shares of stock.

Understanding Your Brand

Your brand is a reflection of you and while developing your brand story, it is important to remember that it is more than a new sign or a unique logo. It is the culture of your company that your staff, patrons, and the community will identify with daily. Try to follow current trends but make an effort to align your core values and vision of your business with your brand. Remember, your brand is everything from the business’s social media account to the collateral that you hand out.

Target Market
You need to know how crowded the marketplace is, so in advance of opening the doors of your shop, take time to research your target market. An important question to ponder is – what will set your organization apart from the rest? Who is your ideal customer – what does he and/or she look like, how do they shop, where do they eat, what do they do for a living? How are you going to reach this person(s)? Understanding your target can help you hone everything you do.

When you conduct brand research to create your overall company’s vision, identity, and name, you may discover that the best method is little unscientific. Pull together a group of friends and brainstorm one evening. Or you can outsource the naming and branding to an agency who will handle that task for you. Either way, the name and essence of your company is a personal choice as it is a reflection of you and your values.

When it comes to naming your business specifically, here is a quick checklist of items to consider:

  • Is it easy to remember and pronounce? You want your business to be a name that customers will remember with ease. While a title in another language may give organization shop that international flare you are striving for, know your audience. If they cannot pronounce it, the likelihood is that they won’t have a full understanding of the services you provide.
  • Will the name last or is the name you selected too trendy? Too often, business picks slang words for their company name and then find themselves years later stuck with something that is confusing to the next generation of customers. Instead, select a name that will stand the test of time.
  • Does your organization’s name fit your personality? Be authentic. If your personality type is more modern than hipster, it is okay and goes with that theme for your company. The business is a reflection of you, and the name should be as well.
  • Does it express the “right” connotation? If your brand value is to be a young and vibrant company, make sure that your name does not have the word grandma in the title. While that may seem a tad obvious to you, the name of your company needs to reflect your core values.
  • If your shop’s name was shortened or made into an acronym, is it acceptable? If you decided to select a long name, double-check that if it made into an acronym that it does not refer to anything improper.
  • Does it fit the many stages of the life of your customers? Sometimes company names can alienate potential customers. If your audience spans over several generations, steer away from a name sounds like it is only for people over the age of 50 or on the end of the spectrum, the younger generation. Money doesn’t discriminate on the age of its spender, and neither should you.

Other Points to Consider
Lastly, when selecting your name, try to stay away from suggestions for any deficiencies in your organization. Even if you are trying to be ironic, not everyone may understand your sense of humor. Additionally, take a moment to confirm that your company’s name is not offensive in other languages and welcoming to all nationalities. Try to keep your business name simple, maybe two words at the maximum and familiar sounding but above all, distinctive. Once you have your name, conduct a Google search to see if there is another organization with the same name. As soon as that step is complete, and your company name is still unique, you are ready for the next step in branding.

Brand Boards
A brand board is a useful tool that pulls together all of your ideas in one place. This board focuses your attention on the key components that you want to incorporate into your company. While maintaining brand unity, include your logo on all designs such as business cards, packaging, and correspondence. Pay attention to your color palette, images, typography, and patterns. Conducting this step will allow you to evaluate if your brand is consistent enough visually, and if not, what you need to correct.

When you have your philosophy and vision, here are a few ways for you to channel your brand message:

  • Logo and company colors
  • Business and Loyalty cards
  • Outside Signage
  • Customer communication – email, mailings, SMS
  • Packaging
  • Media Kits
  • Flyers
  • Social Media – Instagram, Facebook, Twitter, LinkedIn
  • If a brick and mortar location, the overall theme of your shop

Your brand is much more than a pretty graphic or funky tagline as it reflects you, your staff, and the company overall. All of the minor details matter, so do not compromise when beginning your entrepreneurial journey.

Marketing Your Business
Your business is a reflection of you, and it is vital to select the correct business structure that fits your needs in the beginning. Now that you’ve got your business plan and structure set begin focusing energy on getting the word out about your company from print to social media. Decide on what platforms you need to reach your target audience. Also, begin that email list so that you can connect with your customers on a frequent basis.

While there is some risk of being your boss, there are also infinite rewards. Taking the next step to be an entrepreneur is not an easy road, but with the right tools, you can navigate it smoothly. From deciding your structure to marketing, the first thing you need to do is start. Our team can guide you through that process by calling the Brightwork Advisor to help you make your business succeed.

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