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What are the steps involved in starting a new business?

| Apr 5, 2019 | Business Law |

California is one of the best places in the world to start a new business. While the tech giants of Silicon Valley are stellar examples, businesses in other industries too have thrived in the Golden State. This startup boom can be attributed to factors such as California’s business-friendly laws and the availability of knowledgeable resources, but at the same time, one cannot ignore the fact that California business owners themselves have put in enormous efforts to ensure the growth and sustenance of their businesses.

That being said, people who dream of owning and running their own business successfully should make sure that they are thorough with all their business activities right from Day 1. The U.S. Small Business Administration has a comprehensive guide for that purpose, which breaks down the business setup process into 10 steps, beginning with conducting a market research up to opening a business bank account. The eight intervening steps cover the other critical aspects of a new business setup.

The first step, as mentioned, is conducting a market research to understand whether the idea that an entrepreneur has can be converted into a business opportunity. After determining that there is a genuine business opportunity, the second step involves preparing a thorough business plan that will serve as a roadmap for how the business is to be organized. The business plan is not only a roadmap; it also enables the entrepreneur to secure funding, which is the third step in setting up a new business.

As a fourth step, the entrepreneur needs to select a location for setting up the business. It is necessary to keep in mind that the entrepreneur’s choice of location will have an effect on legal requirements, revenue and taxes. The fifth step involves finalizing the legal structure of the new business. This decision is amongst the most critical because it directly impacts business registration requirements, taxation and personal liability. The sixth step involves choosing a unique business name.

Once the new business name is decided, the seventh step involves registering the business with the state government and the federal government, as may be the requirement, so as to protect the business’s interests. The eighth step is related to obtaining federal and state tax IDs, which are needed for both subsequent steps. In the ninth step, the entrepreneur needs to apply for all the licenses and permits that are needed for a particular business. The tenth step requires the entrepreneur to open a business bank account. Provided all the preceding steps are completed flawlessly, this one is an easy final step.