Maybe you watched The Social Network or read about how Airbnb or Uber started and you’re thinking that you could take a jab at starting a business with hopes of it becoming an overnight success. Well, the enthusiasm isn’t bad, but starting a new business isn’t as easy as opening an Instagram page and letting the followers just roll in. Starting a business entails a lot of work. Of course, we don’t want to lecture you, but we do want to give you a friendly wake-up call and make sure you’re ready for the work. Before getting all excited, make sure you have the back-end of your business sorted out as that’s what’s going to be running your business. It’s time someone told you the factors that you need to consider when starting a business.
You’re going to need a company name. Though this isn’t necessarily important for taxes or registration, it is important to the success of your company. You’ll want a name that’s easy to remember and clearly represents the product you’re offering. You definitely do not want your company name to be similar to another well-known brand. If you’re struggling with choosing a name, you can look online at the list of registered company names. That way, you don’t get disappointed when you come up with a great name and it’s already taken.
After you decide on a name, you need to have an idea of the type of business you’re going to be establishing. At first, you may be thinking that this isn’t so important, but you need to know this since it’s highly tied to the legalities and taxes that come with running a business. There are a couple different types of business entities that you’re able to choose from:
- Limited liability company (LLC)
- Sole partnership
- S Corporation
Take your time when choosing the type of entity your business will be registered as. Naturally, being a sole proprietor is one of the simplest entities to be as a business since you don’t actually need to take any formal action in order to create it. If you’ve done freelance work, you were the sole proprietor, for example. In one moment of our lives, many of us were sole proprietors and didn’t even realize it. If you’re going to be registering a company, then you need to know what type of entity it is. For this, you can do research online but you should also consult a lawyer as you’ll be given more tailored information for your specific business.
Many new entrepreneurs when starting a business ignore the legal side, however, they don’t understand how crucial it is to know the legalities surrounding your business. Regardless, it’s important that you get legal assistance from the very beginning. Many small businesses, 60% to be exact, experience a legal situation, however, only have of them seek legal advice. Now, this doesn’t mean you’re not capable of carrying out your own legal work, however, lawyers are here for a reason and they went to school for a reason: to learn the law. In addition, lawyers are very well connected people, thus, you’ll be able to be recommended by other professionals such as accountants.
If you thought you only needed a lawyer, think again. When you’re a business, you pay taxes. You probably knew this. Once you’ve decided the entity that your business falls under, you’re going to need to understand how to file taxes. As a new entrepreneur, you’ve probably never had much experience with taxes in regards to business, so, finding a qualified and competent accountant is a must. They’ll be able to teach you how the system works as even though you have an accountant to do your taxes, you’re legally responsible for the information you submit.
Now that you covered the boring but necessary part of setting up your business, you get use your creativity and get your business going. Whether it’s an online business or a retail business, you’ll be able to open a space, create a website, work on marketing and start selling. Though this part sounds simple, they’ll be a lot of time spent on trying to work out the kinks as you are a new business. Though, through a solid business plan, you should be able to get on your feet without major obstacles. That being said, do be wary as business is a live mechanism, thus, it’s always changing. Though your idea may seem simple, once you start bringing it to life, it could end up being quite a challenge. Does this mean you should give up? Absolutely not. All this means is that you need to be aware of the world of business as it’s not forgiving to anyone who enters it.
|If you would like to contribute an article to Cornell React, please email us.|