An estimated 32.5 million businesses employed 46.8% of the private workforce in 2021. Moreover, a record 5.4 million businesses were launched in 2021, which represents a lot of people chasing their dreams during the great resignation and coming out of the pandemic looking for a fresh start.
Unfortunately, not all of them are going to make it. Here are some general steps for increasing the odds of success whether you want to become the next Steve Jobs, or perhaps have more modest goals of earning a decent living doing something you love.
It starts with planning, key decisions and seeking the expertise of others
Starting a business usually involves many vital details, good luck, paperwork and a solid plan. The U.S. Small Business Administration recommends the following as the right way to get things off the ground:
- Do market research: This will tell you whether there is a market for your products or services. Use the findings to create a competitive advantage.
- Write a business plan: This is the business’s foundation and a road map of where you want to go with your new business. You can also use it to get investors, loans or funding for a new endeavor.
- Pick a name: This can be hard, but the name should be memorable and reflect the brand’s character. Your lawyer can determine if the name is available to be used for your business.
- Pick the right structure: Whether it is a partnership, sole proprietorship, limited liability company or some other legal structure, your choice will dictate how much you pay in taxes, the registration requirements, and personal liability as the owner. A lawyer can help you decide which type of business entity would be the best for you.
- Pick the location: Whether it is a brick-and-mortar workspace or filing for licenses and permits, the right location can lower overhead and provide a market with more opportunities to thrive. Whether buying or leasing, a lawyer can guide you through the process, prepare and review the sale documents or lease, and be sure the zoning allows your operation.
- Register the business: This makes it legal and provides some protection if others try to replicate your success a little too closely. You may need to do this at the federal and state level, but Pennsylvania does not require it if the owner uses his or her legal name.
- Get federal and state tax IDs: You’ll need this for important things like opening a bank account, hiring employees and paying taxes. Pennsylvania assigns numbers for every tax account registered. Those registering with the state will likely need to get a Federal ID too. Your accountant or lawyer can assist with this.
- Apply for permits and licenses: A business needs these to be compliant. The permits and licenses will depend on the industry, location and other factors. Again, a lawyer can assist with this process.
- Open a bank account: This enables the business to deposit proceeds and pay taxes and other bills.
- Get funding: Starting a business in the garage is fine, but at some point, you’ll probably need to raise or borrow capital to grow it into a viable operation. A lawyer can help you negotiate the best terms from your lender and review the loan documents.
Experienced guidance can make a difference
Most business owners or entrepreneurs do not have legal expertise. It is important to consult with others who understand the laws and regulations relating to your business. Please call on us if we can assist you in setting up your business.
