starting a business

Small businesses make up a whopping 99.7 percent of U.S. employer firms, and have accounted for 63 percent of the net new jobs created between 1993 and mid-2013, according to figures provided by the Small Business Administration’s Office of Advocacy.

In fact, over half of America’s workers either own or work for small businesses, which create two out of every three new jobs across the country. This strengthens not only local communities and economies, but bolsters the foundation of the economy nationwide.

Launching a small business is one of the most momentous and exciting moves you will ever make. It can also be among the most intimidating. You most likely have many questions and you prepare to strike out on your own.

Before plugging in the Open For Business sign, make sure you have done your homework. Are you ready to be an entrepreneur? What are the start-up costs? How will you cover those costs?

Consider these 10 Steps to Starting A Business provided by the SBA.

Have you decided your business structure? That decision is important because the structure determines which federal tax forms you file, among other things.

How should I structure my business? 

Location! Location! Location! Where will you locate your business? Do your research – consider transporting materials, hiring qualified workers, zoning regulations. Determine the best location to fit your business needs.

Where should I locate my business?

A business plan is an essential roadmap for business success. This living document generally projects 3-5 years ahead and outlines the route a company intends to take to grow revenues.
A well thought out plan also helps you to step-back and think objectively about the key elements of your business venture and informs your decision-making on a regular basis.
Use your completed business plan to discuss next steps with a mentor or counselor from an SBA resource partner such as a Small Business Development Center (SBDC), a Women’s Business Center (WBC), SCORE or your local Chamber of Commerce.

Writing a Business Plan

Get help building your business plan with this valuable tool.

There are right ways and wrong ways to fund your new business. Suze Orman, bestselling author and financial advisor, says every new business owner should have at least 12 months of operating expenses.

It can take a year to establish your business and start getting paid on a regular basis, so you’ll need a cushion—and these savings must be separate from your personal emergency fund. In addition, your start-up money should not come from your retirement accounts or home equity. Borrowing from your future or leveraging your home is not allowed, Orman says.

She also says prospective business owners need to have impeccable credit.
If you have any credit card debt, or your FICO credit score is not at least 720, you’re not yet ready to take on this venture, she says. How can you expect to have a successful business when your personal finances aren’t in great shape?

How to Budget for Start-up Costs 

Those are certainly points to consider. But every prospective business owner’s situation is unique. Schedule an appointment with Redstone’s Business Solutions team to talk about your specific business funding needs.