The old American dream of owning and managing one’s own business is alive and well–stronger now than ever before. Latest statistics show that one out of every three Americans is involved in a new or small business. Many of these businesses are small home-based or virtual companies that are revitalizing the U.S. economy and employing over half of the working population, creating more jobs than are being lost through downsizing.
Coming up with a business idea
Some people decide they want to start their own business after coming up with a great idea. Other people know they want to be their own boss, but they don’t know what they want to do. If you fall into the latter category, you need to decide what type of business you want to start before you can begin thinking about anything else. Paying attention to your skills and the current entrepreneurial trends may help you decide what type of business to go into.
Getting help for minority owned business
If you are a member of a minority, disabled or a woman, you should be aware of special programs that help small and minority-owned businesses get started. The federal government often limits competition for contractors to small or minority-owned businesses. The Small Business Administration also has business development programs for minority business owners.
Choosing a form of business
Once you’ve got your business idea, you can start the process of making your business legal. Your first step should be to decide the legal structure of your business. There are four main types of businesses: sole proprietorships, partnerships, corporations and limited liability companies. Sole proprietorships are the simplest to set up but have the greatest risk of personal liability. Corporations and limited liability companies are more difficult to set up but protect owners from liability.
A new business won’t go anywhere without financing. Financing can come from many sources, including bank loans, venture capital, private placement and the sale of stock.
Naming the business
One of your first steps should be to come up with a name for your business. The name should be catchy and not too general. Before settling on any name, you need to make sure the name is available. Once you’ve decided on a name, you will need to register it with the state.
Choosing a business location
Another thing to consider when starting a business is where to locate the business. There are a number of choices, including:
- locating a business in your home,
- locating a business in a business incubator, and
- renting commercial space.
If you decide to rent a space, you will need to negotiate a beneficial commercial lease. There are steps you can take to reduce your rent and reduce the security deposit.
Hiring service providers
Once you’ve got a location, you need to have electricity, phones, computer equipment, etc. It is important to compare companies and services and know the right questions to ask a potential service provider.
Buying a business
Instead of starting a new business from scratch, you may have the option to buy a business. By buying an existing business, you can better assess the business’s risk. You may not have to wait years for it to become profitable, and you can avoid businesses with no market potential or technological problems.