Four Top Tips For Starting Your Own Business

Congratulations! You have done enough research and gathered enough information to believe that your business idea is a good one and you have decided to move forward with starting your own business. What are the next steps you need to take?

Here are our four top tips for important steps you must take to successfully start your own business.

1. Establish the correct legal structure

Perhaps the most important decision you will make about your business is selecting a legal structure. There are several legal structures you can consider for your business, including:

a. Sole proprietorship

b. General partnership

c. Limited partnership

d. Limited Liability Partnership (LLP)

e. C Corporation

f. S Corporation

g. Limited Liability Company (LLC)

h. Non-Profit Corporation

i. Professional Corporation (PC)

j. Professional Association (PA)

k. Professional Limited Liability Company (PLLC)

The best legal structure for your business will depend on several factors, such as your need to obtain insurance or financing, the type of business you want to run, and how you intend to handle tax issues. It is well worth the time and cost to consult a professional to help you select and establish a proper legal structure.

2. Establish an accounting system

The accounting system will be driven in part by the legal structure of your business. The larger and more complex your business, the more likely it is you will need outside help with your accounting, whether in the form of a bookkeeper for handling daily and weekly transactions or a Certified Public Accountant (CPA) for more comprehensive accounting work.
In most cases it is a good idea to consult a CPA during the business startup phase to get professional advice and insight into the accounting needs you will likely encounter. Even if the ultimate advice is for you to handle accounting tasks yourself via one of the many small business accounting software packages on the market, you will have the peace of mind that you have chosen an accounting system that is best for your business.

3. Register the business name

It is important to register your business name, which often occurs as part of obtaining your business license. When you register the name, you identify your business as a unique entity with a unique identity, and help protect yourself from the potential confusion that could result from someone else taking on the same business name as you.
The registered business name will be reflected in all of your official business paperwork such as tax statements, tax returns, financial statements, etc. Specific registration steps vary from state to state, so check with your Secretary of State for details about the correct process for your location.

4. Establish sound business processes

When you establish sound business processes right from the start, you simplify your business life immensely. The right processes will help you generate sales, properly invoice customers, and manage business growth over time. Key business processes include:

Sales process - prospecting for new customers, making and maintaining contact with customers, follow up and tracking of orders, generating referrals and repeat business

Billing process - invoicing, aging and tracking of invoices, posting payments to accounts, credit and collections

Growth process - hiring employees, evaluating expansion opportunities, risk vs. reward, financial requirements of specific growth options