Written by Molly Frazee; Financial Strategist
While it may seem a daring move, statistics have shown that the pandemic has caused an increased rate of new businesses sprouting up across the US. Some have discovered new opportunities in light of our post-Covid world, others were forced to get creative because they were unable to continue their previous jobs, and others planned to open a “pandemic friendly” business anyway. If you fall into one of those buckets and you are looking for some guidance, we wanted to highlight some to-do’s as you get your new business started.
1. Make a plan.
As a new entrepreneur, you may find the idea of a business plan daunting. A quick internet search is enough to reveal plenty of templates, books, articles, and webinars offering free and paid options to help you build a business plan. While these can be helpful, especially if you are planning on starting your business by seeking investors or lenders, sometimes the business plan is more of an internal tool and can be very simple. What are you in business to do and why? Who are you up against in the market and how will you set yourself apart? What kind of revenue figure, customer count, production level, or other metric are you striving to achieve in your first year? How much do you plan on growing in years 2-5? Don’t get bogged down with a full financial projection if this is for your use. Just think about what measure best reflects your business and layout some basic goals for yourself. Once you have your goals established, what will you need to reach them? Having a roadmap for yourself will keep you on track as you get started; down the road, it will remind you why you got into this in the first place; and most importantly, it will help you START! Sometimes taking the first step is the hardest.
2. Make it official.
You will need to get a federal employer identification number (EIN) from the IRS as well as register your business with your state corporation commission.
The department of revenue will be another stop on your list, and they will be able to guide you in setting up your state tax ID, sales tax, and payroll tax if applicable. State sites will provide a full list of requirements needed to get up and running.
Work with your tax professional and legal counsel on determining the best entity type and associated filings for your new business.
Check to see if your city requires any licensing or zoning.
Shop around for a commercial insurance policy that suits your needs.
Choose a bank that is convenient (location and mobile banking), provides good customer service, and has the potential to accommodate any future lending needs.
Decide on the accounting software to enable sound bookkeeping and financial reporting.
Get your website/URL locked in and working for you.
3. Assemble your team.
Depending on the business, your team may just be you, but most often you will want to use resources that are available to you as you get started. There are several federal and local organizations to help new entrepreneurs. Check out the Small Business Administration (SBA) for many resources, or your local chamber of commerce or small business association for contacts in many fields – legal, financial, tax, branding, and marketing, you name it.
These experts will all be useful for areas of the business world that are not in your wheelhouse. Based on your own experience and comfort level you’ll be able to pick and choose where you may need extra support.
At EDGe, we understand time and money can be in short supply as you get started. We offer 90-minute sessions to talk through areas of your accounting and finances and help set you up for success as you embark on your new venture.