Procedures That You Have to Go Through to Start Your Own Business
- When you decide that you want to start your own business, you have to decide how you want to organize the company. You have three main business structures to choose from -- a sole proprietorship, a partnership or a corporate entity. Sole proprietorships and partnerships are usually simpler to form, but leave you with some degree of personal responsibility for the business. Corporations are more complicated to form, but usually offer you protection from business liabilities. Another common choice for starting your own business is an LLC (limited liability company), which combines a less complex application process with limited personal liability for business-related obligations.
- One of the first actions you must take to start your own business is to register the company with the state. The state corporation bureau or secretary of state's office handles requests from individuals who want to establish commercial entities. You must fill out a business registration form, which requests detailed information about the owner, the company and the type of business you plan to open. When it is filed, the business is listed on the official state register and can make required tax payments, including income and sales taxes (if applicable).
- Some companies need a business license in order to establish and maintain operations. The license gives the business owner or owners permission to conduct some type of activity. You must meet all requirements, including getting required business insurance coverage, as well as taking any required training and exams. This requirement is common for a business that works closely with the public, like a restaurant or financial services company.
- One of the most important procedures you should complete when starting your own company is to write a full business proposal. The business plan outlines exactly how you will launch the company and seek financing. Commercial lenders and investors need to see a business plan as a condition of granting funding for the start-up. Even if you don't plan to get funding from outside sources, a business plan is a guide for your own benefit as you navigate this process.