Setting up a small business is one of the worst headaches that business people will ever encounter in their lives. This process is always riddled with challenges that never seem to abate. One of these problems exists in the form of a business plan. In this regard, many small businesses have fallen by the wayside due to possession of wayward business plans. Failure to formulate a good business plan has also been responsible for failure to attract investments. Some small business entrepreneurs cannot also acknowledge the strengths and weaknesses that are in their businesses. Thus, they fail to come up with the most efficient way of running the enterprise.
Some business people fail to realize that starting a small business requires astute planning. This would involve making vital decisions related to finances as well as complying with various legal requirements. While thinking about a small business idea, entrepreneurs must arm themselves with a checklist, which denotes the most important ingredients for the successful introduction of a new business. It includes:
A business cannot exist or carve an identity for itself without a proper business name. Luckily, people have the freedom to lend their personal names to their business names. Also, they could opt for a DBA (Doing Business As) name. This is a fictitious name that differentiates the name of the business from that of the owner or partners. DBA names are usually applicable in two different scenarios. In the first case, it would be required when people want to start a business as a partnership. It would also be necessary when people want to set up a new enterprise under a different name from that of the existing LLC.
A business plan
Some businesses have always overlooked the need to formulate a strong business plan. A good business plan should always include the executive summary, business description, marketing plan and financial projections among others. The plan must also be accompanied by the appropriate supporting documentation.
Business permits and licenses
Business permits and licenses are also part of the checklist since the business cannot operate in a vacuum. Those who want to start a business must ensure that they have the necessary documents to engage in the business activity. There are various types of licenses that are often required for the operation of different enterprises. They include state or federal licenses.
The checklist must also include the location of the business as it would be the nerve center of its operations. The choice of a business location could be influenced by a variety of factors such as, brand image, competition, safety, labor opportunities and future plans among others. While choosing a location for the business, the entrepreneur must also comply with the state laws and taxes.
Tax identification number
A business cannot become legally existent without a tax identification number. Upcoming entrepreneurs must not forget to obtain this number since it is important for the legal identification of the business entity. Obtaining a tax identification number is however possible after registering the business with the IRS and the state revenue agency. This registration also enables the business to enjoy other benefits like workers’ compensation, disability and unemployment insurance.