Starting your own business is a big step to take, often the first of many on the road to financial freedom. If you’re going to be successful, there’s a lot of work you need to do to get started on the right foot. Right from the beginning, there are important decisions you need to make that will have a significant impact on your business going forward.
How to Finance It
Starting a business costs money. How much will depend on a variety of factors, such as your business model, location, licensing fees, and equipment. If you have enough capital on your own to put up, that’s great. If not, you’ll need to figure out how you’re going to finance your business. There are multiple options available to you, depending on the route you want to go. You can get a business loan from a financial institution. Many people turn to crowdfunding in place of partnering with traditional investors. According to Legal Zoom, the route that works best for you may be dependent on how much it costs to get started. Figuring that out is a good first step.
Choosing the Right Business Structure
You’ve probably heard the terms “LLC” and “corporation” thrown around when talking about business structures. According to Josh Freeman, choosing the right business entity is key to avoiding mistakes that can cripple your business. LLCs and C corporations are legal entities. LLCs are good options for simple businesses, while the C corporation structure is more complicated, but better for keeping profits within the business. Both offer liability protection. C corporations are taxed more heavily, but are able to reinvest profits, and can have unlimited shareholders. LLCs, on the other hand, aren’t taxed the same, but can’t reinvest profits, and can’t have shareholders.
Choose a Location
Where you decide to operate your business is another decision you’ll need to make early on. What works best will depend on the type of business you intend to run. Running a business out of your home can help you save on overhead costs, but comes with its own disadvantages. You could rent a commercial property to operate out of, which can give your business a sense of professionalism you can’t really get if you’re running it out of your home. If you want a happy medium, according to Alliance Virtual Offices, you might consider the benefits of using a virtual office.
There’s a lot of thought that goes into getting a business started and off the ground. Before you really get going, you’ll need to make important decisions like how to finance it, choosing the right business structure to use, and deciding where your business will operate from. These, along with other important considerations, will help you get your business set up for success from the beginning.
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