There’s no question that owning a business can be both lucrative and fulfilling. When you’ve made the decision that you want to start your own business, it’s important that you go through all the necessary steps to give you the best chance of success. Trying to start the process in the middle instead of the beginning will only lead to problems that will hold you back. Here are the steps on how to start a company.
Create a Business Plan
Every great business starts off with a thorough business plan, and your new company should be no different. You can create a business plan on your own or have it created for you, and here is a rough outline of what it should include:
Executive Summary – This lets everyone know what your company is and provides a brief introduction to the plan. It should describe the business and what problem it solves in the marketplace.
Company Description – This includes the company name, the general service area, the target market, and what types of services will be offered. Services might include residential and/or commercial, roof repair, replacement, new builds, etc.
Market Analysis – This is an assessment of the market, including its size, volume and value. It should also include your potential competition, ideal customer, buying patterns and habits any barriers to entry.
Management Profile – This includes the management team, titles, functions and duties within the company.
Service or Product Line – The exact products and services you’ll be providing to your customers.
Marketing – This will include your overall marketing strategies and tactics, along with timelines and projections.
Financial Projections – This should include your projected sales, revenue and expenses for the first couple of years.
Create a Legal Entity
It’s always a good idea to form a legal business entity when starting your own business. Typically, you’ll have either a sole proprietorship or LLC (Preferred) business. A sole proprietorship is the least complex of the choices, but your personal and business assets and liabilities aren’t separated. With an LLC (Preferred) setup, your personal assets will be protected from any liabilities, and all the profits and losses will be taxed as income or loss to the business owners.
Register for Taxes
It’s important to address your taxes before you even get started. Many companies have found themselves in serious trouble because they waited to register for their taxes. Take the time to register your business with the IRS and you’ll be given an Employer Identification Number that you can use for filing taxes and other functions.
Business Bank Account and Credit Card
The next step to start a company is to open a business bank account, get a bank card, checks, and a credit card. It’s important to have a separate bank account for all your business activity and a credit card makes sense when purchasing materials. Checks may not be used as much these days but having some on hand will save you from the inconvenience if you ever need them. You may also consider applying for a line of credit for some added financial security.
Get All the Necessary Insurance
Professions like home services require a few different types of insurance, so make sure to do your research and get precisely what you need. Speak to your business lawyer to determine exactly what you should get and how much. Here are some of the different types:
- General Liability Insurance
- Sub-Contractor Liability Insurance
- Worker’s Compensation Insurance
- Professional Liability Insurance
- Vehicle Insurance
- Umbrella Insurance
Bookkeeping and Accounting
There are several different types of accounting and bookkeeping software out there if you choose to do this part on your own, but most of the time it’s best to outsource it to a professional. It’s always best to maintain your focus on the parts of the business you do best, and let others handle the rest when possible. Keeping clean and organized financial records will make your life much easier, so find a good accounting and bookkeeping firm and let them do their thing.
Permits and Licenses
You will need licenses and permits to operate a legal some business. Requirements tend to vary from state to state, so it’s wise to check what’s needed where you plan to operate so you are sure you have what you need. A Local Business Permit and State Contracting License are two of the permits you’re likely to need before you can set up shop and begin work.
Build Relationships with Suppliers
If you sell goods or have a business that needs materials, there’s no question that you’ll need a good source of materials and supplies to carry out the jobs you receive from new customers. The types of materials you’ll need will depend on the business you are in, and it’s important to look for quality and good pricing when sourcing materials or products. You will also want to ask if suppliers will extend you a line of credit so you can easily get the materials or supplies you need when a new job comes in. It may take a bit of time, but once you establish a good relationship with trusted suppliers it will make a big difference in your new business.
If you have a physical location, you may need an office manager, a salesperson, and a receptionist. You will also need to hire to get the work done. In the beginning, you may only need a couple to help you tend to your customers if you plan on working too. As you continue to grow, you can hire more employees to meet the needs of your customers.
Hire a Marketing Agency
When you’re all set up and ready to go from a legal and logistical standpoint, you’ll need to switch your focus to getting quality leads. This is where hiring a proven marketing agency provides a ton of benefits. When you are first starting a business, you have no customers or reputation in the marketplace. A good marketing agency will help you with things like:
- Creating online and offline marketing strategies
- Getting new leads
- Growing your online reputation and authority
- SEO and paid advertising
- Converting leads to paying customers
- And more
While there seem to be quite a lot of tasks involved with starting a business, it will all be worth it when you’re making a great living doing something you love. If you’d like to learn more about how to start a company or want expert help with your digital marketing, get in touch with the team at Prime One Creative today.