Business Start-Up
Transforming businesses from obstacles to prosperity
Stephen J. Homola
Business Start-Up: Our use is defined as creating a means to offer and sell a product or service to the public.
Plan Your Business
Planning is critical to successfully starting and building a business. That’s why we’ve dedicated a section for it. Here you’ll find guidance on the tools and resources necessary to write a winning business plan. From sample plans to a business plan primer, we’ll get you started on this very important activity. Once your business is up and running, you’ll need to regularly review and update your plan to manage growth.
Genesis Factor
Entrepreneurship offers many rewards, but you must be prepared and committed. Take whatever time is necessary to determine if you are ready; this will be time well spent.
Write a Business Plan
A written guide to starting and running your business successfully is essential. This plan will encourage loans, promote growth, and provide a map for you to follow.
Starting Your Business
Starting a business requires you to complete a number of steps and make some key decisions. Though part of your overall plan, you’ll need to select a location, decide on a business structure, and obtain the necessary licenses and permits. In addition, determining which financing options will meet your short-term needs and long-term goals is crucial. BMCS can provide information on these topics along with guidance on buying an existing business, copyright and trademark issues, and getting support from an outside expert.
Find a Mentor
Never think you can do it alone! One of the best ways to insulate you against business failure is to find and work with a mentor, someone with business experience who can guide and assist you.
Finance Start-Up
All businesses require some form of financing. An integral component of starting a successful business is raising sufficient capital. There are many challenges here, but numerous resources are available to help you.
Buying a Business
Once the decision is made to start a business, often the next decision is either to buy an existing business or start a new venture from scratch. There are advantages and disadvantages to both options.
Buying a Franchise
Business franchising offers many opportunities. This form of ownership has helped many entrepreneurs get started in business and succeed.
Naming Your Business
There is more to naming your business than just coming up with something that sounds good and you happen to like. Thought must be given to state and local requirements and making sure you do not infringe upon the rights of someone else’s business name because of legal requirements and implications. Picking a name for your business requires much more than just creativity and a working knowledge of your target market. First you will need to decide which business structure you will use, since each structure has its own peculiarities. For example, many states require a sole proprietor to use their own name for the business name unless they formally file another name as a trade name, or fictitious name.
Similarly, you will need to determine whether your trade name will be the same as the full legal name of your business. Of equal importance is finding out whether your name or a very similar name is being used by another business, and if so, what rights they may or may not have to use the name in the area where you do business. Keep in mind that some businesses only file trademarks within their locality, so it's possible that the same name can be used elsewhere.
Search And Registration: Trade names can be registered through the Secretary of State Office and for wider marketplace protection, through the U.S. Patent and Trademark Office (Businesses may use the USPTO online system to search the federal trademark register to see if their proposed name is being used by a federally-registered business).
Domain Names: For many businesses that operate on the Web, trade names are synonymous with domain names, such as Amazon.com and Monster.com. Domain names are not registered through state or local government; rather they can be obtained through numerous online businesses, most of which will allow you to conduct a name search prior to purchase to make sure your chosen name isn't taken.
Choosing a Structure
Many factors must be considered when choosing the best form of business ownership or structure. The choice you make can have an impact on multiple aspects of your business, including taxes, liability, ownership succession, and others.
Forms of Ownership
One of the first decisions that you will have to make as a business owner is how the company should be structured. This decision will have long-term implications, so consult with an accountant and attorney to help you select the form of ownership that is right for you. In making a choice, you will want to take into account the following:
· Your vision regarding the size and nature of your business.
· The level of control you wish to have.
· The level of structure you are willing to deal with.
· The business' vulnerability to lawsuits.
· Tax implications of the different ownership structures.
· Expected profit (or loss) of the business.
· Whether or not you need to reinvest earnings into the business.
· Your need for access to cash out of the business for yourself.
Using Technology
Today’s very competitive business climate demands that business owners understand and use advanced technologies. Technology is an enabler; it can help a business improve efficiencies and even expand operations. However, the use of technology should be balanced with business needs and practicality.
Financing Growth
You need money to grow a business! Capital can come from many sources, including personal savings. However, borrowing money from a lender is a primary source of capital, as is raising equity capital from an investor. Many resources are available to help guide a business owner to the best options for financing growth.
Exiting Strategy
Getting out of your business may not be important to you at this point. However, planning your exit strategy often involves more than just closing down. Within this section we’ll discuss practical options that include selling your business or transferring ownership. In the event that you decide it is time to close your business, you’ll learn about liquidation, filing bankruptcy and reviewing the IRS guide on shutting down.
If you've never given any serious thought to exiting your business, now is the time to start. Exiting is a multi-step process that can take from weeks to years depending on the size of the organization and the reasons for exiting.
Selling Your Business
It is more than just important to know how, when, and how much to sell your business for. There is a big difference between properly preparing your assets to be sold and putting a for sale sign on the front door. Knowing the difference can pay big dividends.
Financing
Can be as much as 90% of the sales of small businesses involving at least some seller financing, it may be unrealistic to expect to receive a lump sum payment. Yet financing can be tricky, as agreeing to a long period of payments entails the same type of risk as owning the business and depends on the business' future success. Alternatives may include getting the buyer to use non-business assets as security for the loan.
Employee Stock Ownership Plan
One way to sell the business to your employees is through an Employee Stock Ownership Plan (ESOP). ESOPs are tax-qualified employee benefit plans that invest primarily in stock of the employer. Significant tax advantages may be available to both an individual selling the business to an ESOP and the employees participating in the plan. The many tax incentives and benefits of employees having· ownership in the business make such plans attractive even when business owners wish to sell only part of their businesses.Initial and Direct Public Offering: Primarily used to raise investment capital, Initial Public Offerings (IPOs) and Direct Public Offerings (DPO) may be a way of maximizing the return from the sale of your business.
Sales Agreement: Checklist of items that must be on the written sales agreement.
Pricing: Find out what your business is worth before entertaining any offers.
Finding a Buyer: Once you've decided how much your business is worth, the next step is to find a buyer.
Transferring Ownership
Thoughtful succession planning is important for all businesses, particularly family-owned businesses. Working with an accountant and an attorney will help you understand the tax consequences of the transfer and develop a succession plan that will work best for your situation.
Liquidating Assets
Selling business assets, especially under trying or forced circumstances, can be difficult. However, knowing what to do and how to do it when it comes to selling company assets can help return the most value. You deserve to get as close to market value for your assets as possible.
Filing Bankruptcy
Deciding to file for bankruptcy can be a painful decision. However, it is a choice that sometimes must be made. To protect yourself and your business, educate yourself about this course of action before such a choice is made.
Closing the Business
When the decision is made to close a business, there is more involved than just locking the doors. Learn what actions should be taken.
Summary:
While every start-up is unique to the organization, there are logical steps to take to handle and avoid the confusion of how to act. Business Management Counseling Services can aid your company or organization prior and during the time on when you are ready to start your business. We highly recommend a pro-active approach of preparedness.
