Many people dream of starting a business - but are hesitant to start a business of their own because they don't know if they're the rightsort of person to be starting a business or are worried that they'll start a business and fail. Are you one of those people wondering if starting a business is right for you? Than find out more about the entrepreneurship on Philox!
Do the Entrepreneur test!
Do the Entrepreneur test!
What do need to start your own business?
No matter what, every self-employed entrepreneur has some equipment needs. Will you need a new computer or upgrades to your existing one? Are you prepared to pay for repairs? Do you have a back-up plan when equipment is being repaired? This may include your cell phone or its charger, your computer monitor, your car, the widget on your gadget -- anything you use which is integral to your business can break down, including your own body and mind. How will your business be handled if you are ill or hurt?
Space - Whether you use your home, your car, your best friend's garage, an office suite, or Starbuck's, you need a business space. Will you need a space to build, write, store, or meet with prospective clients? How much space will you need? Will your space meet the IRS requirements for a tax deduction? If you are planning to home office, have you considered the added utility bills, such as increased electricity for computer, lights, etc.?
This may include additional cell phone time, business cards, advertising in local print media, flyers - printing, paper, design, ink. Don't let those hidden costs sneak up on you. For example, with an inkjet printer, the ink is often more expensive than the paper, especially if you print in color. What about web hosting? Domain name?
Although networking is probably the least expensive marketing you can do, it is important to attend networking events for certain types of business. Such events incur costs for meals, parking, travel, etc.
Will you need a change in wardrobe to maintain the needed image for your new business? Think about what image you want to project to your target market. If you've been wearing business casual at work, and suddenly you have to go buy a couple of new suits, it can add up, and unfortunately, it's not tax-deductible.
Will there be changes in your traveling needs? Gas costs have risen (like you haven't noticed), and if you're traveling to visit prospects, be prepared to visit the pump more often. Also, your vehicle may need to be able to carry your product or equipment, or you may need to be able to take clients to lunch. Is your vehicle up to the task? You may need to clean out the trunk and the back seat and have it detailed.
Will you be filing a DBA ("doing business as", also known as "fictitious business name" or "assumed name")? The laws vary from state to state and country to country, but even if local laws don't require it, your bank probably will in order to accept checks made payable to the business name
If you want to accept checks and credit card payments under your business name, your bank will likely require you to have a business account, rather than a personal account, even if you're a sole proprietor. Find a bank that specializes in serving small business so that your monthly fees stay reasonable.
Credit Card Processing
Will you be accepting payment by credit card? You will need to have the proper agreements and equipment in place. Merchant accounts generally have an initial cost for equipment plus monthly fees or minimums.
Does your new business require local, state, national, or international licenses?
Will you need it to keep yourself and your business competitive? Is ongoing certification needed or even required by law?
Does your business have any such legal or ethical requirements? Are there industry standards you need to abide by? What risks are you undertaking that you might be professionally liable for?
You may not think you need ongoing accounting, legal, or other help, but what about an initial consultation with a CPA to get your books set up properly? Or with an attorney to draft your basic contract? Or a business coach? "Sole proprietor" doesn't have to mean you do everything yourself.
Prepare to pay quarterly as cash starts to flow. Entrepreneurs have many deductible items, but they also have to pay all social security taxes. Remember, no one is withholding for you. A good practice is to set up a separate account for taxes and transfer money into there as it comes in. Plan for these things when you're calculating your initial cash flow requirements, and you'll save your sanity, and maybe even your business, down the road.
The Business plan
Most small business owners and future entrepreneurs know the importance of having a business plan. You probably know a sound business plan is critical when securing financing. You may not realize, however, the benefits of a business plan expand well beyond that single use. It is also a critical tool for your use as you develop and grow your business.
The business plan is a written document that clearly identifies and defines the goals of a business and precisely outlines the methods for achieving them. It is a complete and detailed description of exactly how you intend to operate your proposed business, as well as a communications tool for investors and others interested in understanding the operations and goals of your business. Your plan will be a working tool, a blueprint on how you are going to build your company, a succinct document that specifies the components of a strategy with regard to your business mission.
Business plan archive