Owning your own business is part of the American Dream. Facebook, Apple, Telsa, Disney, Ford – these are all enterprises that began with an individual’s belief that they could do it their way.
No matter how beautiful the design, if a house is not built on a well-placed foundation, that house will eventually fall. So too, the success of a business can depend, in large part, on the financial foundation on which the business expects to run.
However, you can think and think about the idea. There is one thing you cannot ignore is how this is going to work financially. No matter how inspiring the idea is, it cannot work on bad financial structure and loose accounting control. Today’s small business owner is confronted with new business problems and opportunities on a regular basis, and majority of them are related to financial issues.
So as you are getting exited for opening your own start-up, let’s sit down and talk things over again. Step by step, we present you a guide for everything you need to know to start your own business. Because at Harava, we believe in doing what’s right for the client, and to help our clients make substantial improvements in their performance and to build a great firm. We believe we will be successful if our clients are successful, and this is our commitment to all our clients.
Harava’s Checklist for Starting a Business
- Define your passion or idea and define a unique selling point
All businesses start with an idea. But you’ll need more than an idea to make your business dream a reality. Entrepreneurs needs to find idea(s) they are passionate about and define a unique selling point (USP). It’s important that you define what makes your business different to the competition.
- Find a business mentor
Whether it’s a business advisor or a CEO or retired business owner or a financial guru, find someone who will give you honest feedback about your business. Contact Small Business Associations or Small Business Development Centers or contact us at Harava Group, Inc to discuss options.
- Create a business plan and business model canvas
When you create a business plan, you’ll need to summarize your business using a business model canvas as it is now, and map your vision for how it will be in the future.
Business plans can help you get funding or bring on new business partners. Investors want to feel confident they’ll see a return on their investment. Your business plan is the tool you’ll use to convince people that working with you — or investing in your company — is a smart choice. Ensure that your business plan has the following nine (9) sections
- Executive summary – Briefly tell your reader what your company is and why it will be successful.
- Company description – Provide detailed information about your company. the problems your business solves. and list out the consumers, organization, or businesses your company plans to serve.
- Market analysis – Industry outlook and target market. Describe a competitive market strategy including suggested revenue model
- Organization and management – How your company will be structured and who will run it. Discuss the team in detail, organizational chart of the team and how their unique experience will contribute to the success of the venture.
- Service or product line – Describe what you sell or what service you offer. Explain how it benefits your customers and what the product lifecycle looks like. Share your plans for intellectual property, like copyright or patent filings.
- Marketing and sales – Describe how you’ll attract and retain customers. Your strategy should evolve and change to fit your unique needs. describe how a sale will actually happen.
- Funding request – Clearly explain how much funding you’ll need over the next five years and what you’ll use it for. Prepare Source and Use of Fund table. Always include a description of your future strategic financial plans, like paying off debt or selling your business.
- Financial projections – Convince the reader that your business is stable and will be a financial success. If your business is already established, include income statements, balance sheets, and cash flow statements for the last three to five years. Include forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. Make sure to clearly explain your projections, and match them to your funding requests.
- Appendix – Provide supporting documents or other materials were specially requested. Common items to include are credit histories, resumes, product pictures, letters of reference, licenses, permits, or patents, legal documents, permits, and other contracts.
Business Model Canvas
- Legal Structure, Business Name, Location and Registration
Choose a legal structure that works best for you. Your business has a great impact on taxes and liability protection for your business and personal assets. Examples of structures are sole proprietorship, partnership, limited liability company, corporations and nonprofit.
Register your business to make it a distinct legal entity. How and where you need to register depends on your business structure and business location.
- Get Federal and State Tax IDs
After business registration, the next step is to generate a federal tax identification number (EIN) for your business. This allows you to pay taxes, hire employees, open bank account and apply for business licenses and permits. Apply for an EIN with the IRS assistance tool
Depending on your where your employees would be located, you should also apply for that state withholding tax account number and unemployment insurance number. This allows your business to remit state income and unemployment insurance payment accordingly.
Change or replace your EIN
If you already have an EIN, you might have to change or replace it with a new one if certain changes have occurred with your business.
Types of business changes that might require you to change or replace your EIN are:
- Name change
- Address change
- Changes in ownership
- Changes in management
- Change in tax status
Your requirements will depend on your business structure and the kind of change that occurred. Check with the IRS to determine exactly whether you need to change or replace your EIN.
- Apply for licenses and permits
Most small businesses need a combination of licenses and permits from both federal and state agencies. The requirements — and fees — vary based on your business activities, location, and government rules.
State licenses and permits
The licenses and permits you need from the state, county, or city will depend on your business activities and business location. Your business license fees will also vary.
- Open a bank Account and start hire your first personnel
Open a business account when you’re ready to start accepting or spending money as your business. A business bank account helps you stay legally compliant and protected. It also provides benefits to your customers and employees.
Harava encourage organizations to immediately secure business insurances like general liability, professional liability, worker’s compensation depending on their needs. Such insurances protect businesses from unexpected costs or lawsuits, natural disasters or unforeseen situations.
For more information, feel free to contact an Harava advisors for professional advice on setting up a business or restructuring an existing business. Call 240.491.9145 or email info@haravagroup.com
