Are you tired of working for someone else and have finally decided to go into business for yourself? Perhaps you don’t see eye-to-eye with your current employer, or perhaps you have a bold new idea within your industry. Other times, you may simply want to work around your own time schedule for personal reasons. Whatever the case, you are ready to take the entrepreneurial leap into the world of business. However, before you can get started, there are some key decisions you’ll need to make, and these ‘may’ be things you hadn’t thought of. Let’s look at a few of those now.
What Form of Company Are You Going to Start?
The one thing you know you need to do is form a legal business entity, but what kind will best suit your particular needs? You can find information on choosing a business structure on the Small Business Administration’s website, but in all probability, you will start with either a sole proprietorship or an LLC, Limited Liability Company. Forming an LLC has a number of advantages, especially if you will be hiring a team to work with you, but if you’ve never formed a business entity of any kind, you may need a bit of help. The hardest part for most people is understanding where to file and how to get all the information they need for tax purposes. There are companies to help you file an LLC within your state for a small fee plus your state’s filing fees to make life a whole lot easier for you in the very beginning.
Will You Need a Team?
This may be a bit more involved than you had planned on because you may not have the budget to actually put someone on the payroll. Perhaps you have a friend you have worked with over the years who would be interested in getting in on the ground level of a new company. While you may not want to make them equal partners, a thought might be to offer them a percentage of any revenue brought in until such time as they can be put on the payroll. Perhaps you could add an amount for payroll into your business startup loan so that you will have a budget, however small, for payroll.
Financial Concerns Need Careful Consideration
The one thing you should be aware of is that most new businesses don’t make a profit within the first year or two. They may break even, but the actual return on their investment doesn’t show as a ‘profit’ until well into the second year. Altogether too many new entrepreneurs don’t account for this dry spell in the very beginning. If you are going to venture out on your own with a newly formed LLC, be prepared to live on a very limited budget. You can draw a salary from the company, but don’t expect a seven-figure income right off the bat.
There is much to think about and plan for when starting a business, so perhaps it would pay to work with a team that can help you choose the right business structure as well as doing a name search so that your company will be unencumbered by legal battles over who owns the name. Remember, that’s your brand, so it’s important to own it. Once you have that free and clear, it’s time to launch. This is the day you’ve been waiting and working for. Good luck on your new venture, and may it be a success for many years to come!