Do you want to start a business from the comfort of your home and don’t know where to begin? Follow these simple steps to get you started.
Starting a business can be exciting yet scary. There are essential factors that need to be considered like legal aspects, your financial situation, and your overall readiness for the business you have in mind. Some people who start a business only begin with a very small amount of cash while others take a loan out. There are many things to consider when you first start a business.
Step # 1 – Choose Your Niche
Are you planning on buying products for resale or are you going to sell something that you make? Consider your hobbies, and talents when you choose your niche. You want people interested in what you are selling. It is also important that you stand by what you are selling. If you are a hairstylist, selling hair products would be a great idea because of your background knowledge. Once you have decided on what your niche is going to be, try searching the internet for products to buy and resell.
Step # 2 – Get a Taxpayer Identification Number
Getting a Tax ID number is important. This number is used by the Internal Revenue Service (IRS) in the administration of tax laws. It is used for business purposes, and it will be on legal documents. The business or business owner is linked to the Tax ID number. Getting a Tax ID number doesn’t cost anything. Go to the IRS website, and find the phone number to call them. Explain that you are starting a business and that you would like to obtain a Tax ID number. After giving them the required information, you will be given a Tax ID number. If you do not feel comfortable giving information over the telephone, instead, there are forms that can be filled out and mailed to the IRS instead.
Step # 3 – Choose a Business Name
Choose a name for your business. Try to keep it simple for people to remember, preferably, something that associates with your business. Once you choose a name, obtain a DBA, that is, “Doing Business As.” There are places online that can help with filing for a business name, for example, the local County Clerk’s Office. It cost about $20-$30 for the paperwork fees.
Step # 4 – Apply for a Certificate of Authority
Getting a Certificate of Authority is necessary. This document is needed to pay state taxes. For information on this document, go to the tax website for the state where you live. It doesn’t cost anything. This document is also needed when you open a business checking account.
Step # 5 – Open a Business Checking Account
Opening a business checking account makes it easier for you to keep track of profits. Buy merchandise for your business using this account. It looks professional to write a check for your business.
- When searching for retail products online, try typing ‘Tax ID Required’ in the search box along with the product you are searching for. This will help bring up companies that you can usually purchase items from at a lower cost and that are not available for the public to purchase. This will help you boost sales because they are unable to purchase these items unless they do so from you.
- Don’t fall into debt in starting your small business. Instead, purchase about 30-50 items and try reselling them first. Use that profit to put back into the business. By doing this, you will not fall into a debt trap. You may even realize the business is not the right niche for you. If this happens, at least you didn’t invest a fortune into it.
- It is very important to manage your accounts. There are many small business accounting software available out there. You can also try accounting in excel.
If you ever have any questions in setting up your small business, contact the IRS or your local taxation office. You can also hire a small business adviser for a fee if you can afford it. There is a lot to learn about running a business. Be prepared for many trials and errors until you are able to find what works for you. Your determination and preparation on how to start your small business should eventually pay off.