What Do I Need to Open My Small Business?
What tools do you need at your disposal in order to get your dream business up and running? First and foremost, start planning right now if you haven’t started already. However, at this point in your planning, you should already have a business plan and the financial means to lift your business off of the ground. Now you just have to follow your plan and budget your finances properly in order to get things going. Essentially, a successful launch is grounded in a solid determination of ownership, employee hiring and payroll planning, equipment purchasing, and locking down an adequate workspace.
Determine Ownership of the Business
This is an incredibly important step. In order to file ownership of your business, you need to decide on exactly who will take part in owning it. Will it be a partnership or a sole ownership? Talk with any partners (and investors, if you have them) and decide what works best for you. Neither choice is necessarily better than the other, it will only determine which individual(s) have complete responsibility over the business and all of its debts.
This is a great time to sit down and determine, in writing, the exact role of each business partner, if you haven’t already. Some individuals may be willing to invest more time and money into the project, while others may just not have that capacity right now. Making clear boundaries and lines in the sand, so to speak, will keep anyone from feeling an unexpected sense of burden when it comes to their duties and responsibilities.
In addition, this is something that you’ll need to know in order to file taxes when the time comes. Your business, and all owners involved, will need to be properly taxed. All business expenses will need to be reported for all owners and the IRS will want to make sure that your business, as a whole, paid enough taxes throughout the calendar year (our quarterly, depending on how you prefer to file taxes).
Decide on an Initial Budget & Payroll
Once ownership is in place, you’ll want to take a look at any loans and income you’ve collected to get your business going. You should have a good idea of about how much you’ll be working with at this point in the creation of your business. Sit down with any partners and come up with a budget plan for where your funds should be allotted.
Undoubtedly, you’ll have some initial costs that will need to be handled right away, but sitting down with your team to discuss and put money aside for payroll needs is crucial for anyone starting up their business. Employees, their rates of pay, and work hours should be determined and financially planned for at this time. You don’t want to end up in a scenario where your budget has been spent on less than urgent supplies and your employees are left hanging for their paychecks, which is a legal liability by the way. While there are options available to help you manage fluctuations in your expenses, your business will be building its own credit, so you’ll want to be diligent about how you leverage additional debt or lines of credit. If you’re planning on having employees, you are legally obligated to pay them. Get ahead of it now so that your plan is in place and you’ll always have all employees covered.
This will also include having your employees fill out W-4 forms, and/or any other appropriate work-related forms (like an I-9 to verify each employee’s legal status or freedom from liability forms) and determine a pay schedule. Once your employees fill out their W-4 forms, you’ll know how much state and federal tax should be withheld, which you should keep track of and report accordingly. You should also make your partners and employees aware of the current payroll schedule so that everyone can be prepared for paycheck time.
Purchase Supplies and Confirm Location
After you have all imperative employee related expenses out of the way, you can take a look at your spending budget. Again, sit down with your team and talk about what supplies and type of environment you absolutely must have in order to make your business successful. If that means scoping out a storefront locale, spending extra time creating a user-friendly e-shop, and/or buying physical equipment that is pivotal to your success, now is the time to start planning. This is also a good time to think about how you’ll make purchases for your business in order to keep them separate from your personal spending. You may want to look into getting a small business credit card.
Give yourself enough time to purchase what you need and set up your working location. If you’re thinking about purchasing or renting a storefront or building of operation, you’ll need time to meet with sellers or property managers ahead of schedule. You don’t want to be rushing the opening of your business due to an uncomfortable time frame, so make sure to plan as far in advance as you can. An unorganized opening can ruin your planned operation and leave customers dissatisfied, not to mention it’ll likely make things harder on you, your partners and your staff.
What’s more, starting earlier rather than later allows you the luxury of buying equipment and other essential tools as you go along. You’ll be able to shop around for the best location according to your business’ size and needs. Think about how much space your employees need, what equipment will need to be stored and used in the area, and what the finished product will look like to your customers. You’ll want to think about how your employees and customers will interact with the space. Is it practical, is it giving off the message that you want, and will it allow maximum effectiveness from your employees and equipment used? These are the kinds of things you’ll want to think about nailing down in your location.
Getting Your Business Up and Running
How do I know if I’m ready to open? Don’t rush yourself if you don’t have to. Take all the time that you need in order to ensure the success of your business. Now isn’t the time to cut corners and leave out, intentionally or not, essential pieces of the puzzle. Once you have the above points laid out, at least in plan form, go through and check any weak points that you might need to focus on. Spend time being as prepared as you can for any hiccups that could arise when you are ready to launch.
If you have the time and means, doing test sales with a few friends, family members, and colleagues is always a good idea before you fully launch. Let your customers know that these are preliminary test sales in order to work out any bugs that might make your launch a bit bumpy. Have these individuals give you feedback on their experience and take the time to rate your business on social media. Some good reviews will give you a headstart when it comes to your marketing plan.
Having a hierarchy of owners, leaders, and employees in place that are keyed into your business plan for opening creates a wonderful support system for when that day finally arrives. Great employees, in addition to a solid business plan, necessary equipment, and workspace are what you need to create a successful launch. Smart budgeting behind the scenes will of course keep the business afloat, but it also takes a groundbreaking idea and talented individuals to run it. With all of these aspects in place, you’re sure to have a successful launch.
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Trisha is a writer and blogger from Boise, ID. She is a dedicated vegan, an avid gamer, cat lover, and amateur SFX artist.
This post was updated October 12, 2017. It was originally published October 16, 2017.