Getting Started in Your Home-Based Business
by Phil Hanson
So far, you’ve learned some compelling reasons for starting your own business and taken the preliminary steps all entrepreneurs must follow. You’ve done feasibility studies, market studies, demographic surveys and trend analyses to determine the prospects of your business surviving beyond its launch date. If, at this stage, all signs point to a positive outcome, you’re clear to proceed; there’s still much to do.
Your next step is to find out if you need to be bonded to run your business. If so, be sure you can get a bond before you pay out any money for things like licenses, permits, zoning variances, or any fees necessary to create a legal business entity or bring a business location up to code.
With the bond issue out of the way, you’re now ready to decide what kind of legal structure works best for your business, and to give your business a name. Once you’ve chosen a name, either reserve it or register it with your state’s Corporation Commission, Commerce Commission or whatever agency has the authority to regulate businesses in your state.
You have a range of options when creating a legal structure for your business, among them sole proprietorship, partnership, joint venture, corporation, sub-chapter S corporation or limited liability corporation. A tax lawyer or CPA can help you decide which structure is right for you.
Of course, people can and do operate businesses “off the books,” “under the table” or in black market or gray market areas. You should know that these kinds of operations come with their own sets of problems, not the least of which is income tax evasion – a federal felony offense.
If you plan to have a company Web site, now is a good time to acquire and register a domain name. The name you choose for your Web site should be the same as or closely related to your actual business name. If you have business cards printed (and you should), be sure your Web site URL appears on the front of the card.
A comprehensive business plan ensures that you stay on track during each phase of business development so that it proceeds in a logical order. While an outline containing a list of steps to be taken, along with names, phone numbers, addresses and other contact information will suffice for many entrepreneurs, a detailed plan is essential for anyone contemplating borrowing money for startup or expansion purposes. You won’t get a loan without it.
Having come this far, you’re now ready to think about business services like business insurance, banking, accounting and taxes. At a minimum, you should have liability insurance. Consult with a business insurance specialist, but shop around for the best rates.
Unless you’re running a cash-only business, you’ll need a business bank account and a tax identification number. Again, you should shop around to get the best combination of banking rates and services.
While accounting and tax-preparation software can be very attractive when the only consideration is cost, they can’t compete with professional accountants and tax lawyers when it comes to making crucial business decisions. Professional advice, at least in the early going, can keep you from making many costly mistakes. Consider using software solutions only after you get your business up and running smoothly.
Building and maintaining a good business reputation is critical to your success. It’s important for you to establish policies to guide your business practices, and there’s no better way to do that than to set high standards for the services you render and/or the products you sell, and to back up everything in writing. Sales or service agreements, performance contracts, warranties, guarantees, refunds and exchanges policies and disclosure documents are among some of the legal remedies you can use to stay in your customers’ good graces and avoid hassles with local, state and federal authorities.
Once you’ve pulled all the pieces of your business puzzle together and locked them into place you’re ready to throw open your doors to the public. In order to attract customers, you’ll need to advertise in appropriate media and relentlessly promote your business.
Remember, though, that your business isn’t about you, it’s about your customers. Simply show them that you put their interests first – that your company stands ready and able to meet their needs or satisfy their desires – and you’ll be well on your way to running a successful enterprise.