You want to start a business? Now what?

Starting a new business is no small feat. It involves several of steps, from the early planning stages to filling out the necessary legal documents. Here are 10 steps to consider when starting a new business.

1. Create a business plan

A well-defined business plan is essential because it helps establish achievable goals and a guideline for managing business operations. Starting a business is risky, but it can also be fulfilling, mentally and financially. Beginning this exciting journey with a business plan is a significant first step.

2. Choose a name for your business

The name of your business is the first impression a customer gets from your business. You also want to separate yourself from the competition and stand out.

3. Decide on the legal structure of your business

The structure of your business is fundamentally a creation of state law with a few variations between states. Common structures include:

• Partnership
• Limited liability company (LLC)
• Sole proprietorship
• S corporation
• C corporation

Which one works best for you depends on your total risk tolerance, especially regarding personal assets, the taxation of your profits by the Internal Revenue Service (IRS), your long-term financial goals, and how you choose to design your management structure.

4. Determine a location for your business

Unless you conduct your business solely online, the location of your business doesn’t just play a role in attracting customers and their retention but also creates an appeal for employees. This is a critical step in your pursuit of a long-term business plan.

5. Register your business if necessary

Businesses don’t necessarily need to register with the federal government to become a legal entity aside from filing to get a federal tax ID. Some businesses register for trademark protection or tax-exempt status. If you are interested in trademarking your brand, business, or product name, you have to file with the United States Patent and Trademark Office.

Depending on how you want your business structured is how you will go about registering it. For example, if your business is a limited liability company (LLC), partnership, corporation, or nonprofit corporation, you will have to register with any state where you do business. You would also need a registered agent in your state before you file. You may be required to file for foreign qualification if you conduct business in multiple states. Review the necessary steps in your area.

6. Apply for permits and licenses

Ensure you apply for any necessary permits and licenses that you may need.

7. Open a business bank account

A business bank account gives your business credibility and helps to mitigate liability and identity fraud issues. It puts your business’s name on the credit cards and the checks and helps to build trust with customers and business associations. You are also building a relationship with that financial institution and building credit for your new business. Also, from a tax perspective, having a business bank account helps to simplify the process of paying your taxes.

8. Secure funding to get it off the ground

With necessary funding, a business, particularly a small business, may find it easier to grow and expand. Without the proper funding, businesses could struggle with their market position and become idle as their competition grows around them.

9. Conduct market research to differentiate your business from the competition

Market research allows you to learn about the market, like how much market saturation exists, how customers react (consumer behavior) to certain advertising and products development, or fluctuations in the market (economic trends). These may provide vital insight into new approaches to help your business compete. Some other things to consider when researching include:

• Market size
• Pricing competition
• Demand for your product or service
• Economic indicators like customer income and employment rate in your area

10. Consult a financial professional

Starting a new business is not easy. According to the Bureau of Labor Statistics (BLS), 20% of new businesses fail within the first two years, 45% during the first five years, and 65% during the first 10 years. Regular consultations with your financial professional can help create strategies for managing your finances, making sound financial decisions, modifying existing plans and mitigating risks or unforeseen obstacles.

Important Disclosures:

This material was created for educational and informational purposes only and is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by LPL Marketing Solutions

Sources:

10 steps to start your business | U.S. Small Business Administration (sba.gov)

The Importance of a Business Plan for Entrepreneurs: 18 Reasons You Need One | Indeed.com

Business Structure: How to Choose the Right One – NerdWallet

Top 6 Reasons New Businesses Fail (investopedia.com)

Market research and competitive analysis | U.S. Small Business Administration (sba.gov)

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Chris Marshall

Chris Marshall is a Wealth Advisor with Fusion Financial Group, an independent financial planning firm and fiduciary based in Denver, CO. Located in Wisconsin, Chris has 15 years of experience in the financial services industry. At the beginning of his career, he specialized in both portfolio construction and real estate products, fostering a diverse understanding of investment markets. He is compassionate, motivated and hardworking, making him a natural fit as a Wealth Advisor within an independent financial planning firm. Chris focuses on coaching small business owners and new investors. Chris majored in Business Administration at Colorado State University. Since then, he has built a background in investment model design and securities. Chris received the designation of Accredited Investment Fiduciary (AIF^®), a symbol of his dedication to upholding the fiduciary standard for clients. When not working, Chris spends time at home in Appleton, Wisconsin with his wife, Kayla, and two young daughters, Winnie and Marlee. Chris grew up in Colorado and is a rabid Denver Broncos fan that can trace his legacy season tickets back several generations!   Chris enjoys traveling, attending live concerts and watching just about any type of sporting event. To learn more about Chris, connect with him on LinkedIn.