business
Business, Employment, Entrepreneurship, Success

Starting a Business? Answers to 10 of the Most Common FAQs

Starting a business can be exciting, nerve-wracking and gratifying. Many aspiring entrepreneurs spend hours compiling lists of the reasons why they should (or should not) start their own business.  Even after hours of deliberation, there are unanswered questions that may linger.

  1. What type of corporation should I form?

Perhaps you’ve seen the commercials on television advertising the simple set-up of a corporation, guaranteed to get your business on the road to success.  Those “one size fits all” packages are generic templates any individual can use to satisfy the legal requirements of incorporation.

Before setting up an LLC, an S-corp or a C-corp, however, seek advice from a lawyer or certified public accountant that specializes in startups.  Each type of corporation has its own limitations and benefits, and a trained professional can help you select the type of entity that will best suit your new company.

  1. How much capital do I need to get started?

dollar

There is no definitive answer to how much working capital you should have on hand before launching your business. However, if you are planning on leaving your full-time job to pursue your start-up, you may require more capital than others. Most experts  recommend having 6-8 months of working capital available to help pay relevant expenses and to replace any income you may lose while working to establish your company.

  1. How do I come up with a good business name?

This is actually harder than you may think. An effective business name gives a clear indication of what the business does and is easy to pronounce and spell.  In addition, you need to perform a search to ensure that the web address is available.  If you’re stuck, consider hiring a brand consultant for advice and input.

  1. What type of business should I start?

The great thing about entrepreneurship is the fact that there are no limitations. Your business can be exactly what you envision. While each individual has different ideas, there are some common guidelines that will help you develop your business idea.

  • Choose an industry that you’re passionate about.
  • Select a business idea that is reasonably affordable.
  • Develop an idea that has the potential to grow over time.
  • Pick an area that you have experience in.
  • Establish a company that you would enjoy working for every day.
  1. How can I protect my idea?

Your ideas may actually be revolutionary, but the idea itself is not protectable. If your idea is a unique product or process, apply for a patent or trademark. There is limited protection in copyrights. Seek advice from a patent lawyer for specific details and to find out if you would benefit from these protective measures.

  1. Do I need a lawyer to start a business?

lawyer

Technically, no. It is possible to start your business completely on your own. However, that doesn’t mean you should. Seeking the advice of a lawyer can potentially save you time, headaches and legal issues down the road. Hiring a lawyer who specializes in start-ups will ensure that the appropriate documentation has been submitted and your assets are protected as well as be a resource as your company develops.

  1. How can I get a domain name?

Hopefully, you’ve already contacted a branding agency or specialist to help you develop a great name for your company. As part of the development, an internet search for available .com names should have been conducted. Using a domain provider to purchase your company name is the easiest way to get your company domain. This can also be handled by a website developer.

  1. Do I need a business plan?

Most start-up experts recommend developing a thorough business plan before launching your company. If you are planning on seeking outside funding, a well-crafted business plan is an essential tool in showcasing what your company will accomplish.

While there is validity in writing a plan, however, some people get so bogged down in the details that they never manage to launch. Your business plan should be a working document that helps to guide your company. It should establish general ideas and plans, but should also be flexible to accommodate changes as needed.

  1. What records should I keep for my business?

Again, consulting with a start-up expert can be an invaluable tool for specific information regarding your business, but a general list of records every company should keep would include:

  • Financial statements
  • Corporate documentation (certificate of incorporation, annual filings, etc.)
  •  Board information (member lists, meeting minutes, etc.)
  • Tax records and filings (Federal, state, sales tax, etc.)
  • Bank records
  • Invoices and customer contracts
  • Vendor account information
  1. Where can I get funding for my company?

Funding can come from a variety of sources. Many entrepreneurs choose to self-fund, saving money in the months prior to launch to assist in the support of the company. Others attempt to raise money from outside sources, which can include:

  • Credit cards
  • Friends and family
  • Crowdsourcing
  • Venture capitalists
  • Bank loans
  • Small business financing

It is impossible to foresee every potential question and problem an entrepreneur will encounter on their road to success. Having a trusted resource to answer questions can prove to be one of the most important “necessities” for any entrepreneur. There are many opportunities available for home-based businesses – which one will you choose?

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