Are you planning on starting a business?
During the early stages it can be a challenging undertaking to determine if you have all the key components in place that will allow you to excel and grow as a business. Like all structures the foundation is the main component. It supports and has the ability to withstand all the pressure and weight of the structure itself.
With a poor foundation the structure become unstable and may collapse at anytime. This also holds true for setting up your company's foundation. Success in business is not just about having a great product or innovative idea. It requires also having a strong foundation that can support all the moving parts of the business.
The items listed below are essential for your new business and make up a good portion of a solid foundation when starting up a small business:
- Entity structure -- pay close attention to which kind of entity structure you choose. Whether you choose an LLC, S-Corporation, C-Corporation or Limited Partnership; recognizing which structure is most effectively for your income and tax scenario is crucial for your new company.
- Federal Tax Identification Number -- additionally called a Employer Identification Number or EIN; it's the business equivalent to a social security number yet used for companies. This nine-digit number is appointed by the IRS to business entities operating in the U.S.
- Business location -- a virtual company address or commercial location is ideal when starting up a small business. If you plan to operate out of your home be sure to designate a specific space in your home to run the business. It's essential to keep in mind that your business address and business mailing address may be two separate locations.
- Business phone number -- either a toll free number or local phone number is a reliable source of communication. It's key to allocate a contact number solely for business use that could likewise be listed in major business directories.
- Website -- having a business web site along with social profiles is just as necessary today as having a company phone number and e-mail address. It's important to realize creditors, lenders, and even customers will research to find out more about your business. With a web presence you can make the verification process that much easier.
- Business bank account -- a business checking account is necessary for handling your company's day to day finances. A checking account exclusively used for business allows you to entirely separate your individual banking tasks from your company's.
- Merchant account -- accepting credit cards as a form of payment from customers is an essential part of doing business today. From mobile credit card payments to virtual terminals; credit card processing is exactly what you need to increase sales and generate more income as a business.
- Business credit card -- business credit cards have many advantages such as higher credit limits, benefits & rewards, business credit reporting, and expense tracking. By getting a business credit card exclusively for business purchases one can avoid co mingling funds and using personal credit cards for business.
- Business debit card -- a useful tool widely used as opposed to writing company checks is the business debit card. See to it you add overdraft defense to your local business bank account to stay away from and prospective overdrafts.
- Business funding strategy - one of the main reasons new businesses fail is due to lack of capital. In order to support the growth, operation, and/or expansion of your business you will need access to funding. Establishing a short term and long term business funding strategy is essential to your success.
These ten components provide a good starting point in laying down the proper foundation for your new business. There are many other free business resources available to further assist you on your path to starting a business such as the SBA.gov, Small Business Development Centers, and a score of entrepreneurship and business finance authority blogs.