10 Steps to Starting a Business
According to recent research conducted in part by the Small Business Development Center, 25 percent of start-up businesses fail within one year, half close their doors by year four, and only three in 10 are still open after a decade.
The No. 1 cause of failure? Incompetence, including nonpayment of taxes, poor planning, lack of financial knowledge, and no experience in record-keeping.
At Delap LLP, we are committed to making sure that you as a start-up owner buck the trend and are among those businesses that stay open and are successful for the long haul.
First, we will look at what it takes to start a business. With some help from our friends at the U.S. Small Business Administration, here are 10 steps that everyone must undertake to get a business off and running.
1. Write a business plan. Come up with your executive summary, company description, service or product line, and market analysis.
2. Get business assistance and training. Take a class, seek out counseling from your local chamber of commerce, or ask a professional for guidance.
3. Choose a business location. This very well could be the most important decision you make. Research the competition, check out area demographics, and educate yourself about state and local laws.
4. Finance your business. Most likely you will need to apply for some type of funding, such as government-backed loans, local grants, or a bank line of credit.
5. Determine the legal structure of your business. Decide if you will run your business as a sole proprietorship, a partnership, an S-corporation, a C-corporation, or a limited liability company. Remember to think about the legal and tax ramifications of each type of entity.
6. Register a business name. This process usually can be done with your county clerk’s office or with your state government.
7. Get a tax identification number. You will likely need to apply for this number, for example, if you plan on having employees or operating your business as a corporation or partnership.
8. Register for state and local taxes. The most common requirements for small businesses are income and employment taxes, such as estimated taxes, self-employment taxes, workers’ compensation insurance taxes, and unemployment insurance taxes, to name a few.
9. Obtain business licenses and permits. The first step within this step is to look up which business licenses are required – federally, as well as at the state and local levels.
10. Understand employer responsibilities. Special laws have been put into place that you as a business owner are required to follow. These range from withholding federal income taxes for your employees, to posting required notices at your place of business, to paying federal, state, and local taxes.
Starting a business takes time, commitment, hard work, and planning. Of course, these steps usually are considered the “easy part.” Keeping your business open is the real challenge. But setting tactical and strategic goals can be a helpful tool in better managing your start-up, read more for resources on strategic planning.
That’s where Delap comes in. With more than 80 years of experience in taxation, auditing, accounting, and business advisory services, our team of top-notch CPAs located in Lake Oswego, Oregon, can help your business with, among many other tasks: planning and projections, financial analysis, tax minimization strategies, book-keeping services, financial statement compilations, fraud analysis, risk management, and federal, state, and local tax planning and preparation.
As American entrepreneur and motivational speaker Bill Rancic puts it: “I’m a big fan of small business ownership. I think it’s the backbone of American innovation. But to be successful, you first have to have the courage to go for it.”
With a trusted advisor like Delap along for the ride.