It can be hard to start your own business, and even a college degree can’t fully prepare you for this. Many times, you’ll learn while you’re on the job. There are a few things to know before deciding to open your own company.
You’ll Need Funding
No matter what the economic situation, it can be hard to finance a startup. Many people choose to use their own money when starting out. If you choose to go this route, it’s important to ensure you have enough. Start setting aside money before you start the company. One way of saving money is to consider student loan consolidation. This simply involves combining student loans with different terms and rates to one loan. Look into refinancing from a private lender to great a potentially lower rate or research the Direct Consolidation Loan from the U.S. Department of Education.
You may also choose to take out a microloan if you don’t need a huge amount of capital. It’s often hard to get a bank loan if you don’t have collateral or a credit history yet. These loans range from $500 to $35,000. Since they’re so small, many banks won’t loan this small amount. Look for a special microlender, which works differently than banks do. A micro-lender might not require as much documentation as a bank. The underwriting process might be more flexible as well.
Make Things Legal
After you get your finances secured, you should then pick the legal structure. That determines how you do your paperwork, taxes, and other important tasks. It also determines if you can have employees or not. You’ll need to register with the government before opening the business. You’ll likely need to get an employer identification number, apply for any licenses, and get incorporation articles. The steps can vary depending on your industry.
Have Enough Help
Regardless of whether or not you choose to have employees, opening a business shouldn’t be something you attempt on your own. Having help prepares you to be successful. Have a mentor or coach when beginning the journey. It’s also a good idea to have an accountant. They can ensure your finances don’t put the company at risk. An accountant will help you decide how to best turn a profit. Plus, it can be difficult to do the local, federal, or state taxes yourself, especially in the beginning. As your company grows, you will want to have a good relationship with an accountant.
To ensure your company is protected and you are doing the process correctly, have legal assistance as well. Don’t assume that legal assistance is only for people who get in trouble. Having a lawyer’s input can help you take proactive and preventive legal action to get started on the right foot. If you only get legal help once you have an issue, it could negatively impact your startup in the long term or short term. But if you invest in this valuable help when you start the company, it can pay off later since you will never get in trouble in the first place.