It’s exciting when you’ve decided the time is right to turn a side gig into a full-time job. However, plenty of big questions loom if this is your first foray into small business ownership. Take some good, practical advice from those who have gone down a similar road before you. After all, great businesses have been born in home garages and basements.
1. Figure out your business structure
Are you an independent contractor, self-employed, a freelancer, or a limited liability corporation? All have separate tax implications and you’ll need an Employer Identification Number from the IRS. Read up on your options or take professional advice. If there’s someone else involved in your business or startup, you’ll need to discuss further implications of joint ownership. It’s best to get professional advice.
2. Choose a name, do a search, register your business
Here comes the fun part. Once you’ve figured out your business structure, you’ll need a name for your business to complete the documents. It’s a cyberspace world out there, so remember to do a domain search before registering your business.
3. Write a business plan
Spend time on your roadmap as a living document for the business that will look ahead one, three and five years. Consider SMART (Specific – Measurable – Attainable – Relevant – Timely) objectives, plus organization, financing, sales, marketing, competitive analysis, and more.
4. Obtain licenses, permits, equipment
Does your business require any paperwork around licenses and permits, including vehicles? Look into zoning laws, leasing equipment, insurance and liability at your business location, even if it is at home.
5. Make a detailed financial plan
A cash flow analysis is critical. There are more options than ever for financing your business. Will you be self-funded, crowd-funded, bank financed, venture capital supported, or arrange another borrowing scheme? Explore loans and grants that may be available to you. Determine your state and federal tax requirements.
6. Familiarize yourself with business law
From advertising to intellectual property to workplace health and safety laws, business owners have a lot to know in far-flung matters and a need to protect yourself and your business investment. Your education in business law cannot begin too soon.
7. Visit the U.S. Small Business Administration website
Free resources are a bonus. The SBA has a website dedicated to setting up small businesses, found here.
If you’re thinking about formally taking the next step with your side gig, odds are that business is going well. That’s great news, but remember — you’re not invincible. Take the proper steps to ensure you are setting your new venture up for success.
Resolve your tax problems by visiting Rush Tax Resolution.
For more tips and inspiration for small business owners, visit Small Business Pulse Los Angeles.