Getting Your Business Started

Starting your own business may be one of the most exciting, rewarding—and challenging—experiences of your life. Whether you’re ready to open a retail shop or restaurant, become a consultant or sell your crafts online, launching a business of your own requires careful planning and a clear-eyed assessment of the risks and responsibilities.

Although there is no one-size-fits-all approach to starting a business, some basic strategies apply when it comes to getting your business off the ground:

• Learn business 101. You don’t have to have an MBA, but you will need to know something about keeping the books, writing contracts, getting a business license and paying the bills. In the beginning, one person might hold the roles of purchasing agent, office manager, salesperson, marketing expert, bookkeeper, tax specialist, and janitor—you. Even when you can afford to hire employees for all of these jobs, as the business owner, it’s a good idea to know how to do it all. Take advantage of free resources and training online and in your community. The Small Business Administration and Better Business Bureau have a number of free educational tools.
• Get good advice. A trusted friend with experience in business can help you avoid pitfalls. The Service Corps of Retired Executives can help you find a mentor. See if your local college has a small business development center, a private-public partnership whose mission it is to educate small business owners. They offer classes and one-on-one counseling.
• Research the market. Think about your target audience or customer base and do some research on your competition. You’ll find information in the library, in trade magazines and newsletters, on the Internet, at your local Chamber of Commerce, and the Small Business Administration. Other business owners and trade associations can also offer insight. Keep track of all your research, which you will use to develop a business plan.
• Write your business plan. A business plan will serve as your map for starting and running your business and is essential if you need to get a loan. A good business plan will include an analysis of the market, information about how the business will be run, a marketing and sales strategy, and a forecast of income and costs.
• Determine the legal structure for your business. The type of business entity you establish will affect the amount of regulatory paperwork you have to file, your personal liability regarding investments into your business, and the taxes you have to pay. Learn more about business structures.
• Establish your creditworthiness. If you are planning to get a business loan to start a new business, potential lenders will look at your personal credit history. Make sure your credit history is solid and that you’ve paid your taxes. Be sure to check your credit report and correct any errors before applying for a loan. You can get a free copy of your credit report from each credit bureau once a year through the government-sponsored Web sitewww.annualcreditreport.com.
• Determine what kind of financing you need. Even before you need to borrow money, choose a bank that will be able to offer guidance and expert advice as well as the kinds of loan services you may need now or in the future. There are a variety of credit and financing options available to help you start and grow your small business.
• Name your business. Be creative, but also check legal requirements in your state and make sure the name you choose isn’t the same or almost the same as another business that has legal rights to the name. Before registering your business name with your Secretary of State’s office, research your proposed name online and on the U.S. Patent and Trademark Office's database of federally registered trademarks. If you’re starting an Internet business or want to create a Web site for your business, you will also need to buy a domain name.
• Important details to remember: Licensing, Taxes, and Permits. Register for state and local taxes, get your tax ID number, and find out what licenses and permits you need before you get your business off the ground.