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Starting a New Business


www.motivatedentrepreneur.com

Starting a New Business
Preparing to "Get Started" in your new business
By Ryan Hoback, Motivated Entrepreneur Incubation & Consulting

The biggest problem I had in “Getting Started” on making my idea into a practical business reality was my own fear. Whether it was fear of the unknown, fear of failure, or some other unknown fear I possessed, it was keeping me from reaching my potential. What I learned through experience, and to quote FDR, “The only thing to fear in starting your business, is your own fear itself”.

With proper research, planning and delegation of responsibility, there is no reason your idea, service, or product cannot succeed. In your pursuit towards fulfilling the goals you have laid forth, you must stay focused on the management of your daily routine; however you should always be thinking toward the future. Remain creative in your approach towards using conventional tools, methods, and processes that are needed to succeed in business. In today’s society, we have unparallel access to all the necessary resources and tools you would ever need to educate yourself on various business subjects.

The question becomes, how do I access the vast amount of resources that are available in the most productively efficient manner? The short answer is; visit a consulting firm which offers a step by step guide to starting your business. The Motivated Entrepreneur is a full service consulting firm that offers a wide range of services that vary from simple incorporation consultation packages at very economical prices, to more complex detailed full business packages which include business plan preparation, along with marketing, public relations, advertising, and financial services.

As far as information is concerned, there are numerous places to access business tools and information on the World Wide Web. As mentioned above The Motivated Entrepreneur is a great online source of business information. However, the best source on the internet to supply you with the documented information you are looking for is the Small Business Administration website, SBA.gov. No matter what route you choose to take, whether it is through business consultation or solely through your own hard work and ingenuity, you should always review the government information provided on their website to make sure you are heading in the right direction.

The next step is to start organizing your information and material so that you can develop a clear direction and begin to integrate this direction into your business plan & organizational structure. The first step is to develop a rough business plan, a rough business plan is necessary for you to verbalize your thoughts into a visual medium. This will allow you to gain an added perspective for use as critique on your own thoughts; it is a great aid to helping establish the type of legal form of organization that will best suit your structure of business from a tax perspective.

When approaching you rough business plan, you should break it down into sections. Below is a simple guideline that can be used to conceptualize your plan.

Introduction
• Give a detailed description of the business and its goals.
• List the skills and experience you bring to the business.
• Discuss the advantages you and your business have over your competitors.

Marketing
• Discuss the products/services offered; identify the customer demand for your product/service.
• Identify your market, its size and locations.

Financial Management
• Develop a monthly operating budget for the first year.
• Develop an expected return on investment and monthly cash flow for the first year.

Operations
• Explain how the business will be managed on


a day to day basis.
• Discuss hiring and personnel procedures.
• Account for the equipment necessary to produce your products or services.
• Account for production and delivery of products and services.

Concluding Statement
• Summarize your business goals and objectives and express your commitment to the success of your business

Ok, you have your rough draft business plan together and you are interested in incorporating! Here’s the next step… research, research, research! As I mentioned in the beginning of this article, in today’s society our access to the enormous amount of information that exists gives us a great advantage. It is time to start thinking about your legal structure and the type of organization that will best suit your needs, not just now, but for the successful future you are seeking. I have listed below some information to consider when you begin thinking about incorporation. Another option is to use a full service consulting firm who can give you advice from different perspectives, such as legal and tax implications, as well as expansion management.

When organizing a new business, one of the most important decisions to be made is choosing the structure of a business. Factors influencing your decision about your business organization include:

Legal restrictions
Liabilities assumed
Type of business operation
Earnings distribution
Capital needs

The easiest form of incorporation is the Sole Proprietorship. It also is the least expensive and has the least barriers to incorporation. The majority of small businesses start out as sole proprietorships; sole proprietors own all assets and profits of the company. The business is easy to dissolve, if desired, which can also be a benefit. The downside, is that that sole proprietors have unlimited liability and are legally responsible for all debts against the business. In addition, they may be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans.

Another very popular form of incorporating is the Partnership. A partnership is easy to organize but must have an agreement. In a partnership, the partners have unlimited liability; however they receive all the income from the business. With more than one partner, the ability to raise funds is increased, but since decisions are shared disagreements can occur.

The last form of legal structure is the corporation. The corporation is considered by law to be a unique entity separate from those who own it. A business may incorporate without an attorney, but advice is highly recommended. The corporate structure is usually the most complex and more costly to organize than the other two business formations. Control depends on stock ownership. Persons with the largest stock ownership, not the total number of shareholders, control the corporation. Shareholders have limited liability for the corporation’s debt’s or judgments against them.

The process of incorporation requires more time and money than other forms of organization and corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations. There are different structures that may be best suited for your needs, such as the C-corporation, Subchapter S-corporation or Limited Liability Corporations. You should seek professional consulting advice before deciding to choose which form of corporation is most applicable to your business.

© Copyright 2004-05 by www.motivatedentrepreneur.com



About the Author

Mr. Hoback is founder and President of Motivated Entrepreneur Incubation & Consulting. They specialize in helping entrepreneurs achieve success starting and growing their businesses.

 

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