63% of people in their twenties want to be their own boss, according to a 2013 University of Phoenix study. And while it’s arduous work, the lure of the freelance and entrepreneurial culture these days is incredibly strong. Some people are called to it with a unique idea or talent, while others spend years mulling over what kind of business they want to start.
It always surprises me when people are more in love with the idea of “a business” than “the business.” Many these days know they want to be entrepreneurs long before they have the idea that will help them become one. But if you’re ready, here’s how you can begin your path to business ownership.
Find Your Product
Many people decide on a product or service and then try to find a market to sell it to. This makes the process a lot more difficult. Instead, do some market research and find an underserved market or niche and ask yourself what they need. Knowing their challenge will help you solve their problem. Solve it and you have loyal customers and fewer marketing difficulties.
Create a Business Plan
Now that you know what you want to do or sell, figure out the details of how you’re going to set up a business around it. It will be impossible to get any sort of funding without a solid plan so start here first. A business plan is like the architectural blueprints of the structure, operations, and growth plan of your business.
If you’re completely lost about how to go about putting that together, seek out the help of the Small Business Administration (SBA), your local economic development organization, or your chamber of commerce. These groups can assist you in gathering materials and ensuring you’re doing what needs to be done.
Raise the Money
Funds are critical to a business start-up. Decide where they’re going to come from. Most business owners self-fund in the beginning. You can do this by using your own savings, asking friends and family to contribute, or borrowing the money. Some turn to sites like Kickstarter. Others will approach Angel Investors. The SBA, economic development council, incubation labs, and local chamber of commerce are all good places to ask about resources. They won’t be able to fund your pursuits, but they will know the options available.
Understand Legal Protections and Taxes
There are some legal protections for businesses. Discuss them with a professional to decide which one is best for you. You’ll also want to check out what local requirements there are to register your business as well as the fees, licenses, permits, and taxes you’ll pay. You’ll be well served to set aside money for your quarterly taxes, so you’re not surprised by your taxes owed at the end of the year. A tax professional who specializes in small business can help answer your questions.
When you register your business with the state you’ll need to select your business name. You’ll also need to get an employer identification number (EID) and its possible your state will require a tax ID as well.
Think About Location
Today there are a million options when it comes to the location of your business. Brick and mortar is still an option but if you don’t have the start-up costs for rent, you can do a lot online. Decide whether you will have a physical location or operate out of your home. There are also services that can act as your physical office space when you need it for things like meetings. Virtual assistants can answer your phones to make your operations seem larger than they are while you grow.
When you meet with your tax professional have them give you an abbreviated course in what’s deductible from a business perspective and what isn’t. Then make sure you implement a system to track it all. This will make life around tax time a lot easier for you and/or your accountant. It will also help you optimize your deductions. One thing your tax professional may suggest is opening a business bank account, so you’ll have a better way to track revenue and out-going expenses.
If you’re ready to start a business, your local chamber should be one of your first steps. Think of it as a one-stop shop for all your business needs. They can help you with marketing ideas and connections. No one knows the business community better than your chamber. Make an appointment to see them today.