The startup boom that started during the Covid-19 outbreak is still going strong. Five million small enterprises were launched in the past year. The U.S. Census Bureau reports that there were 451,752 new business applications in March. According to Gusto, 5 million new enterprises were established in 2022, a 42% increase from levels prior to the epidemic.
Are you willing to follow them? If you believe you are ready to launch a full-time startup but have never owned a business before or have been running a side gig, there are several business fundamentals you need to take care of first. Therefore, let’s begin.
How to launch a new company
1. Select a company name
Do not call your company after yourself unless you have already established a name for yourself in your sector. Because of this, you are less scalable, which makes it more difficult to sell your business in the future. Instead, the name of your company ought to convey what it performs. Depending on your sector, you can play around with your name, but try not to go too far from the norm because it will just confuse customers. Choosing a name for your company is the first step in establishing one; consider it your foundation.
When selecting a name, keep the following in mind:
• On what market do you intend to concentrate? Are you aiming for a particular age range or another demographic? Are you going to start off with a physical presence or online? Do you intend to start small and later go big, as Jeff Bezos did with Amazon? Do you wish to scale locally, regionally, nationally, or internationally? Consider the names and phrases that may interest your potential clients.
• CorpNet cofounder and CEO Nellie Akalp advises picking a name that is simple to say and spell. This also makes it simpler for customers to remember when they try to find your business online.
• Do you have a certain image you want to convey? Upscale? Modern? Fun? Serious? Will you be addressing customer or corporate pain points? Then you require a name that is more serious.
• Consumers today choose to patronise neighbourhood businesses. Is there a name that has resonance in your neighbourhood? For instance, Walt Whitman was born roughly a mile from where I grew up, and even now, 204 years later, numerous neighbourhood businesses still bear his name.
• Whether you have a concept, Akalp advises doing a corporate name search to see whether there is an existing company in your state with that name. Akalp advises reserving your desired name so that no other company can use it if you intend to incorporate or create a Limited Liability Company (LLC) but aren’t yet prepared. Finally, she advises registering your business name with a DBA (“doing business as”) in order to safeguard it if you want to run as a sole proprietor rather than incorporating.
2. Select a legal framework.
You have a variety of options when beginning a business, as I just mentioned. A single proprietorship (or partnership if there are multiple owners) has the simplest structure and is the least expensive to run. However, operating a sole proprietorship or partnership exposes your personal assets to risk and provides no legal protection from business-related claims.
The most common option for small firms, incorporating as a C Corp or LLC, is more difficult because you must submit formation paperwork to the state and pay filing fees. Both arrangements shield your private property from business obligations and legal claims.
It’s also crucial to use distinct credit cards for work and personal needs. Regrettably, getting a business credit card accepted can be challenging for businesses. If so, choose one of your personal cards and only use it for work expenses. Use an accounting programme to keep track of your company’s activities, like QuickBooks Online or Zoho Books.
3. Separate your personal funds from your business.
Never combine your personal and corporate finances; doing so could get you into trouble legally. Due of the connection between their personal income and their business income, sole owners are particularly vulnerable. You must maintain separate books in order to satisfy the Internal Revenue Service (IRS) that you are, in fact, operating a business. Legally, corporations must maintain their financial segregation.
You ought to register a company bank account in order to ensure that your finances are kept separate. Even part-time operations should have a company bank account; corporations are required to do this. Even if you don’t intend to hire staff, most banks require you to obtain an Employer Identification Number (EIN) or Federal Tax ID Number in order to open an account.
4. Guard your possessions
It is essential to prevent infringement on your ideas, works, and brand. The U.S. Patent and Trademark Office (USPTO) lists three different types of intellectual property protection as their main components.
• Trademarks are words, phrases, symbols, designs, or combinations of those, such as your company name or emblem, that distinguish your goods or services from those of others.
• “Original works of authorship” protected by copyrights include all forms of creative expression, including words, numbers, notes, sounds, photographs, and other graphic or symbolic media.
• A creator, producer, or inventor who has a patent is given the sole authority to “exclude all others from making, using, offering for sale, or selling” the invention.
other fundamentals
Plan your business. A business strategy may or may not be required. Writing a plan isn’t as important as it once was, but if you want to raise or borrow money, you still need one.
Obtain business permits. The Small company Administration (SBA) provides information on the several company licences you could require as well as how to estimate your beginning costs.
Make a website for your company. Additionally, every company today requires a website. A useful manual for creating your first website is available from the University of California, Berkeley.
Get support. Today, there is a tonne of assistance available for new businesses, much of it free, from institutions like SCORE, your neighbourhood Small Business Development Centre (SBDC), or Women’s Business Centres.
Start now
Don’t let the multitude of business startup details overwhelm you. Yes, it takes time, effort, patience, dedication, and hard work to grow a business. Additionally, it requires bravery to take that risk.
However, as the late Walt Disney once advised, “Think, Believe, Dream, and Dare.”
