Can you start your own business in a month? Experts say it's possible if you follow these steps.
But first, you must invest a lot of time into research that will help you make some key decisions up front. Experts advise tapping the expertise of your local Service Corps of Retired Executives (SCORE) chapter. These accomplished business leaders provide free advice on any number of issues associated with starting a new venture.
To make it legal, you need to register your business name with your state government (the department varies from state to state). Many states offer searchable databases to see if your name has already been taken. Tip: Choose a name that matches your domain name if you want a Web presence, advises WebWorker Daily.
At this stage, you must also know whether you're forming a partnership, corporation, limited liability corporation (LLC), or going it alone as a sole proprietor, which is the simplest structure of all. Think about taxes, administrative duties, raising money, and business risks.
"Many, many businesses start as a sole proprietorship or partnership, and in general, that's fine for most," says Anthony Mancuso, author of LLC or Corporation? How to Choose the Right Form for Your Business.
"You should not adopt a form unless you have a specific need," he told Business Week. "It's best to start simple and adopt more complicated structures for specific legal or tax reasons."
Consider the pros and cons.
Sole proprietorship - The up side is no restrictions and uncomplicated tax returns. The downside is little protection if you get sued.
Limited Liability Corporation - If you're a sole proprietor, you can consider an LLC to protect personal assets. Another benefit is credibility, says Christopher Hughes, of Simsbury, CN, who registered Hughes Settlement Services with the state. "A lot of the companies I deal with require that I have a federal tax ID number, which means my business is incorporated," he told Business Week. "Establishing credibility with corporate clients is important. I can't be just 'Chris Hughes, sole proprietor.'" [Ed. note: incorporation is not a requirement of obtaining a federal ID number.]
Partnerships - Some people won't even consider them, for fear of a messy "divorce" down the road. The up side of partnership is twice the brainpower and energy, different skills that can complement each other and power the business to success. Partnerships can take many forms - co-managers with equal ownership, distributed partnerships where partners cover different territories in different areas, or partnerships in which one person manages the operations while the other silent partner provides financing. The downside can be partnering with the wrong person.
- If you are forming a partnership, corporation or LLC, get an Employer Identification Number, also called a Tax ID number, from the IRS, a simple step that can be completed online.
- Open a business bank account and obtain a business credit card, if needed.
- Write a business plan with three key elements: your market, your business identity and your business focus. Then include a cash-flow projection, the necessary tasks, deadlines, and who is responsible, said Tim Berry, author of business plan software program Business Plan Pro.
"It's not a ponderous, big, ugly document," he told Entrepreneur's StartUps. "It's not a barrier that stands between you and what you're doing. Plan as you go - don't stop what you're doing because you're doing a plan."
Stick with it. Ask for help if you need it. According to the Small Business Association, two-thirds of new firms survive at least two years, and about 44 percent survive at least four. Findings do not differ greatly across industry sectors.
It's true that your business may take more than 30 days to launch, but you should be well on your way. Soon, you'll be able to look yourself in the mirror and say, "Hi boss."