Small Business Structure
Starting a small business is a wonderful way to share your ideas, services or inventions with the community around you. There are so many benefits to owning and operating a small business but you first must know the correct steps to take. One of first step in creating a successful business would be to create a well written and thought out business plan. The US Small Business Association also known as the SBA stated “Your business plan is a essential roadmap to your businesses success”. (SBA) A business plan should contain everything such as a explanation of your companies profile and goals, a description of your company including a mission statement, market analysis for who you will be creating a product or service for, organization and management of the business, what service or product will you be providing to the market, marketing and sales tactics, and lastly your funding and financial projections. With all these components together in one business plan a inspiring small business owner will be on track to success.
Once your business plan is finished it is important to obtain business assistance and/or training. This could be any where from going to college to obtain a business degree, taking small business classes, attending seminars or utilizing the US Small Business Association. Any of these tools will only benefit you in creating a successful business structure because as a business owner you are going to need to know the law of business and the regulations that small businesses must follow. Business owners will need to be familiar with registering for state and local taxes, receiving a tax identification number and obtaining a business license or permit. Without these all components taken care of a business will not be able to exist.
Secondly, which is a very important step would be financing your business. When starting your own business it is very important to determine your budgetary needs. According to the SBA “ To determine how much seed money you need to start you must estimate the cost of doing business for the first couple months. These will be anywhere from one-time costs such as the fee for incorporating your business or the price of a sign for your building. Then there are ongoing costs such as rent ,utilities, insurance, etc. also known as fixed costs and then the variable costs such as inventory, shipping, packaging, sales commissions and other costs associated with the direct sale of a product or service.” (SBA) Personal finance will have to be used because business owner should be able to put down some money from your personal savings to start off. The correct and most efficient way of dealing with this would be to write a monthly household budget that accounts for your income and your household expenses. Any strain on your personal budget can cause a financial risk to your business. It is also important to check your personal credit history because you have not established a business credit history, lenders and suppliers will use your personal credit history to determine your terms of credit. Another way to obtain funding for a small business is through investors, loans and grants. These financial tools will take the strain off of your personal bank account but you need to know how to properly go about having a loan or dealing with investors. Loans can be with you for your entire life and not handling them correctly or paying them off in a efficient amount of time can be damaging to not only you but your business. Along with personal funding, loans and investors throughout the time of your business the way to successfully handle your finances is to create financial statements, a cash flow analysis, and keep business expenses and all business records.
When starting a small business it is key to decide which business structure will fit your company the best. The business structure chosen will determine just about everything on how the business will run. Small Business...
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