If you believe you have a surefire idea for a product or service that will make a fortune, you may be eager to quit your day job and strike out on your own business venture. Having that amazing idea is just the first step, though.
Taking these next steps will start you down the path to running your own company.
- Research the market
You may already see the need your idea will satisfy, but feeling certain that people want it is only one part of the equation. Are there similar products or services already out there? Even if there are, that does not necessarily mean you should give up. Find out where similar types of businesses are operating, how well they are doing and what you have to offer in the way of competition.
- Create a business plan
This plan is not an outline of how you will take your product or service from idea to successful company, although that may be your starting point. It contains the information you need to organize, operate and grow your business. Not only that, but you also are likely going to need to use your plan to impress investors, so consider all of these elements that usually go into this document:
- Executive summary
- Description of the company
- Market analysis
- Structure and management
- Product or service
- Marketing strategy
- Financial projections
You can make your document brief and include only the key elements, but if you are planning to seek funding, keep in mind that investors are probably going to have questions about the information you leave out.
- Choose a business structure
Many of the factors in your business plan could help guide you in choosing a business structure. The structure you register will affect taxes, fundraising, paperwork and liability, so it is important to examine the pros and cons of each option:
- Sole proprietorship
- Partnership (limited partnership, limited liability partnership)
- Limited liability company
- C corporation
- S corporation
- B corporation
- Close corporation
- Nonprofit corporation
In some cases, you may be able to begin as one type of structure and change later, or you may register as a combination of structures, such as an LLC that pays taxes as an S corp.
- Apply for business licenses and permits
The federal government regulates some types of business activities by requiring owners to acquire licenses or permits to operate. States, counties and cities also frequently require licenses and permits of their own that may involve not only business activities but also location and other matters.
In Indiana, licensing and permitting issues may involve your building, such as construction, fire safety and environmental protection. When it comes to occupational licenses, the state lists more than 400 different permissions, certifications, licenses and permits that business owners may need, depending on what activities the company will engage in. Local regulations may involve zoning and signage.
Overlooking any one of these could result in legal trouble, fees or other negative consequences for your company.