Starting Your Own Business: What You Need To Know

September 14, 2022

Have you decided to start your own business? Or maybe you have a side hustle that has taken off and you are loving it, so you are ready to convert it into a full-time gig? Regardless of where you fall, congrats on making the decision to start up a business! But once you’ve made the decision, where do you start? We’ll cut to the chase and be candid. The number one thing to know is starting a business the right way can be a lot. Instead of trying to research all the requirements and considerations and creating a checklist, which you then worry is still missing things, the best tip we can give individuals who want to start a business is to get help and advice from professionals. Don’t try to do it all by yourself. Repeat: Don’t try to do it all by yourself. If you do, you will be stressed you missed something, and let’s face it, you likely have. Talk to professionals and start your business up the right way. Doing things right from the start will benefit your business in the long run, and business success is certainly a long game.

 

So where do you start?

  1. Business Plan.  A business plan is a roadmap for your business. Put to paper your ideas on business name, location, and staffing; marketing research and plan; estimated operating expenses; projected revenue; one-year, three-year, and five-year goals for your business. It is really helpful to put goals and targets on paper. Even small but important goals can be noted because it will make you feel great when you look back and see those things have been completed. A business plan will prove useful to help you stay on track and help make decisions for your business. Investors or banks may want to see your business plan as they consider helping fund your business. For more information on business plans, see https://www.gayjoneslaw.com/your-business-your-way-business-planning-in-action.

  2. Business Structure.  You should meet with an attorney and an accountant to decide the best business structure for your business. There are multiple options for your business structure or business entity. Please, please, please don’t try to choose a business entity on your own. You should consult with both an attorney and an accountant. In Mississippi, there are 6 recognized business entities: sole proprietorships, general partnerships, limited partnerships, limited liability companies, corporations, and non-profit corporations. Each of these entity types have different pros and cons, depending on a number of factors such as your personal finances, whether or not you will have business partners, whether you will have investors, whether or not you will have employees, and short-term and long-term business growth goals. It is critical you consult with an attorney and an accountant because all of these have varying liability considerations and tax implications. You want to be sure you are making the smart choice on the business entity for your business. For more information, see https://www.gayjoneslaw.com/for-startups-business-entities-101.

  3. Formation and Registration. Once you’ve chosen a business entity, you must then legally form the business. In Mississippi, this is done by filing a certificate of formation or incorporation with the Secretary of State. Again, this is where an attorney can help you save time and make sure this is done properly. If you will be operating in multiple states, you may have to register to do business in those states, depending on each of those state’s specific laws and regulations. A business attorney can prove valuable here.

  4. Tax IDs and Registrations. Your business will need a federal tax ID number (EIN).  Applying for an EIN can be done online and will be something a good accountant or business lawyer can easily and quickly handle for you. Depending on the type of business and whether you have employees, there are likely additional state tax registrations or accounts that may need to be set up. An experienced accountant can help here and make sure you’ve covered all bases.

  5. Banking and Funding. You will need to open at least a primary business checking account. Multiple accounts may be needed depending on the nature and unique needs of your business. To open a business checking account, you will typically need to provide the formation document and business governance document that lays out the corporate set up and ownership for your business. Depending on your business plan, you may also need a line of credit or business loan. Consult with your local banker for options that might work for you. There are also small business grants and lower interest loans that may be available through the Small Business Administration and other sources if you meet certain eligibility criteria. For more information on funding, visit https://www.sba.gov/business-guide/plan-your-business/fund-your-business.

  6. Marketing. Online research shows start-ups spend 7-11% of revenue on marketing and advertising costs. This percentage is much higher for investor funded start-up businesses. Some business owners try to save costs by building and managing their own websites and social media presence. Online marketing provides huge opportunities and benefits for small businesses, but it can quickly consume your time and energy. Consider outsourcing or hiring help for this, so that you have more time to manage the business. A creative, budget-friendly option is to use college marketing students who are often looking for experience. Some businesses even have logo contests where people can submit artwork you can chose from (just be sure to get the intellectual property rights to it!).

  7. Payroll. If you will have employees or independent contractors, you must decide how you will manage payroll. Some small businesses use the accountant who will be doing the business’s accounting and tax document prep. There are also local and regional payroll companies, as well as national companies that have online dashboards and 24-hour customer service that can really streamline the process. Most of these companies charge a reasonable monthly fee, which is worth the peace of mind your payroll is being calculated correctly and the easy access to payroll reports and records.

  8. Staffing and HR. Business owners often admit HR is the biggest energy drain for them. HR issues can evolve to bigger problems and even legal issues. Employees and contractors are human and make mistakes and bad judgments, and unfortunately, people steal ideas and information that may impact your business. Addressing these risks is the best place to start to protect your brand. There are a variety of legal documents that can help business owners protect their businesses and brands and minimize risks, including but not limited to non-disclosure and confidentiality agreements, non-compete agreements, independent contractor agreements, employee policies and manuals.

This discussion was meant to be helpful, but if it left you feeling overwhelmed, don’t worry. The primary takeaway here is you do not have to figure this out on your own. Reach out to people who have done this before and can share valuable insights with you. Experienced attorneys, accountants, and bankers can help you. Perhaps most importantly, surround yourself with a team of individuals who bring skills and experience that complement yours and who you can trust and count on. You got this!

For more information on business start-up, contact our team at info@gayjoneslaw.com.