When you’re starting a business for the first time, the amount of unsolicited advice you receive can be overwhelming.
Here, you’ll find a cut-and-dry list of new business do’s and don’ts that leaves plenty of room for you to make your own big decisions.
After all, you’re the boss. Take a look below to make sure you’ve got the necessities covered and aren’t spending too much time or money where it’s unneeded.
Find the right business structure
There’s no one-size-fits-all business structure. Each type has its advantages and disadvantages, and this decision can have ramifications varying from the types of investors your company will attract to the amount of taxes you pay each year. The business structure you choose will impact you from the day you open your doors to the day you close them. Be sure to do your research and make the right decision for your business.
Obtain the proper permits and licenses
Each state and municipality handles business licenses and permits differently. In some states, attorneys, doctors, and architects are required not only to obtain state licensing, but they must also use mandated business structures. Restaurateurs will likely need to receive licensing from multiple state and local government departments before opening. To find what licenses and permits your state and locality require use the SBA’s licensing and permit search.
Find the right financing
Financing your business is not optional, but certain types of funding are. There are a wide variety of financing options to choose from, but some funding options may be better suited for you. The optimal option is financing that offers the amount of capital you require, but also allows for flexible payments at low interest rates. Finding this perfect balance will require a lot of due diligence, but time spent will be more than worthwhile.
File any initial reports due to the state
When you form a new business entity, many states require that you file an initial report or pay a business privilege tax within the first few months of operation. For example, when you form a new business in Alabama, you need to pay a business privilege tax and file a report within 2.5 months of your file date. If you hire a registered agent, they should keep you apprised of any initial taxes or report due dates.
Spend too much on “cutting edge technology”
Yes, technology can captivate your clients, but the costs of unnecessary technology could weigh down your business. Decide what your business needs to start, and put the rest down on a wish list you can refer to when you have the capital to reinvest in your business.
Sign contracts in your name
The primary reason you form an LLC or corporation is to limit your personal liability, and for that reason you should do your best not to sign contracts in a personal capacity. On the dotted line, make sure your LLC or corporation is the one who signs, not you.
Plan on taking a salary
You shouldn’t count on revenue you haven’t brought in yet. All the business plans in the world, no matter how refined, cannot predict the future. You don’t know how well or how poorly your business will perform when you open your doors. When you’re thinking about income, you’ll be best served to live by an old adage: plan for the worst, hope for the best.
Waste time not bringing in revenue
It’s easy to follow the impulse to make sure everything is perfect before making your first sale, but the primary aspect of opening a new business in generating income. Don’t wait. Opening a new business is hard work and your first sales will be some of your most important! Start selling your services or products as soon as possible.