Friday, July 16, 2010

Starting Your Own Business - An Overview

Starting or expanding a business is a big undertaking. There are a lot of factors to consider. Here are few steps to go by to make things easier for you.

The Idea: A lot of people who want to start a business do not know what kind of business they want to start, just that they want to own a business. If you do not already know or do not have an idea, look for a niche in the market to cater to. Another option is to purchase an existing business. Once you have decided on the business the real work begins.

The Plan: Coming up with a business plan is the next step. The business plan is your idea structured and polished up, showing your future strategies for the growth and development of the company. This plan will help you calculate and then secure the finance you will need to get the business up and running and then break even. The plan will also help you set future strategies and goals and keep track of your company's success in the future.

Securing Finance: Now that you have set out your ideas in a business plan, you need to find capital to get the business up and running. Since you are just starting out in your venture you are classified as a small business or entrepreneur. You basically have three options - family and friends, investors and institutional loans. You need to consider which one you would like to go into. Each has its own pros and cons. You might have to give part ownership if you borrow from family, friends and investors. Borrowing from an institution might eat away at your profits through loan payments.

Registering: So you have the idea, the plan and the finance and you are raring to go. But wait, you still need to consider the legal issues. You need to choose a legal structure under which your business will be registered. Here your financing decision will come into play. Depending on that you could register with the state under Sole Proprietorship, Partnership, or Corporation and you will receive a federal Identification number.

Office Space and Staff: This is the last step. You need to consider where you are going to run your business from. Will you operate out of a home office or rent out commercial space? What staff are you going to hire? Will you need an accountant to do the taxes? And forget inventory management. These are a few of the issues you are going to face. If your business deals with products you will need to hire storage space or you could contract out to a drop shipment company. As your business grows you will need to maintain the delicate balance between work load and hiring. You could use asset management software to keep track of your financial dealings, inventory management, employee salaries, taxes and much more. Good luck in setting up your business!

By : Carmine_Bailey

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