Assuming you have completed the 4 GroundUP StartUP steps now is the time to create a business. At this point there is a successfully tested idea that you will make into a business. What is next? The difference between a business and hobby is the structure. All businesses are well structured and organized. To get started you can use the order bellow or do several things at the same time.

Step 1 – Decide on Legal Form

You have to decide what legal form you would like to have before moving forward. The type of business and your personal situation will determine the appropriate legal form. Do you need protection from liability? If you have a business that can potentially harmful to people you will need to do that. Along the way keep in mind to do not jump into costly forms of ownership quickly.

This step involves organizing your business as a legal entity. There are several options to consider. All have different legal, financial and tax implication. The correct legal structure for your business depends on a number of factors including the level of control you want to have, your business’ vulnerability to lawsuits, and financing needs.

Different legal structures have specific registration requirements. Deciding which one to use will determine if you have to file registration forms with state and local governments.

• Sole Proprietorship – A business owned and managed by one individual who is personally liable for all business debts and obligations.
• Partnership – A single business owned by two or more people.
• Corporation – A legal entity owned by shareholders.
• S Corporation – A special type of corporation created through a tax election. An eligible domestic corporation can avoid double taxation (once to the shareholders and again to the corporation) by electing to be treated as an S corporation.
• Limited Liability Company (LLC) – A hybrid legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.

Step 2 – Name Your Business

Business names trigger images and emotions in customer’s mind. Instantly people associate the business with what is familiar to them, become curious or indifferent. Selecting a name is important component of the overall marketing effort. You should decide what image the name should communicate conservative, creative, entertaining etc. The name usually describes the type of business you are in and are easy to remember and understand.

If you do not have a name already start looking at potential competitors from your industry for ideas. You will receive good information about how other similar businesses are named. You may use one of the online dictionaries to brainstorm different variations of the name. The thesaurus sections are very helpful. Then have to see if the Internet domain name is available. Ideally both names have to match. If not available abbreviate the Internet url to resemble your real name. Ask friends and relatives for feedback if the name makes sense. Then you have to like it.

Step 3 – Register the Business Name

Unless you use your personal name as a business name you want to register your business with a legal name. DBA is the popular term for Doing Business As or Fictitious Business Name. It means an assumed name. Your business’ legal name may be required on all government forms and applications, including your application for employer tax IDs, licenses and permits. Bank’s usually want to have a DBA associated with a business account.

Step 4 – Decide on Physical Location

Answering the question “Where business will be conducted?” is important for further arrangements. Is it going to be a commercial building, mobile or home location. It is important to remember that even virtual businesses have physical location where they operate. The decision is driven by the type of business you have.

You should try to do your business from home and conducting meetings in coffee shops for as long as possible and saving money along the way. Use your garage, spare room in your or relatives properties. Rent a post office box and use that address on your promotional mail and stationery, by doing this will make it less obvious that you are working from home. The professional image you portray is very important to your clientele.

The next best location is to rent (sublease) a space in an existing business, cart in a mall or a vehicle you can do business from. Using such approach will make a business cheaper to start and maintain. You will save money and increase profit. It is a safer to have loose arrangements, for example: month to month rent. If the business fails you will be out of pocket a worth of monthly expenses. You will not lose a lot.

If you decide that the business needs commercial location then you have to decide on concept, design and build up before opening the doors. This is the most expensive way that requires significant commitment. Build up costs can easily rich hundreds of thousands dollars. If you produce something, you can easily get by with basic equipment needed to produce your item. However, if you have place of business that will be visited by customers then you need a well-designed and conceptualized space to attract and retain visitors. It will take longer to make a profit. The process should include careful location selection, singing a favorable long term lease and significant commitment of financial resources.

Step 5 – Signing Rents and Leases

Rental and lease agreements are part of normal business activities. Probably the first one that you will sign is the one with the landlord of a commercial property.These agreements are long and complex. You have to read it at lest twice before singing it. Ask for help. If something does not feel right walk away. There is not such thing like best location and final offer. Do not allow your emotions or fears to take over. Such agreements are long term and often they require significant commitments. Be careful and do not hurry to sign anything.

Step 6 – Get Licenses, Permits and Tax ID

Businesses need permits or licenses to operate legally at the chosen location. There are federal, state and local permits, licenses, and registrations you will need to run a business. Do a careful search to learn exactly what you need for your business. Each type of business has different requirements.

Here is link that can give you a good start.

How To Get Licenses and Permits

You will need Employers Identification Number (EIN) if you have employees or are part of business partnerships, corporations and other types of organizations. U.S. Internal Revenue Service (IRS) issues EINs. It is also known as an Employer Tax ID and Form SS-4. You can get one instantly by completing IRS online form.

Employers Identification Numbers (EINs)

State Identification Numbers usually are corporation number, employer account number, certificate numbers for specific licenses.
Check with the Secretary of State’s office. A directory of all state websites can be found at StateLocalGov.net

Resale License allows a company to purchase goods or materials for manufacture or resale without paying sales tax — because the retail consumer pays the tax. Each state has its own requirements and terminology. Some states don’t require a license — just a signed statement of intent to resale goods.

Step 7 – Open a Bank Account

You have to have a separate business account even if it is a sole proprietorship. Be aware that business banking charges are much more generous than in personal banking. Before you go to the bank is helpful to know the approximate the number of deposits you normally make each week or month. How many checks you plan to write per month. A low-cost, basic plan may suit your needs if you make only a couple of deposits a week. All banks will require you to prove that you are a business. Eligibility requirements and the required documentation to open a business bank account vary by type of business and ownership.

Step 8 – Look for Insurance

In many occasions minimum business insurance is required before opening the door. If you rent a space the landlord would require that the business have insurance. Other businesses dealing with food or potential hazards will require insurance as well. Most business owner get by with the minimum required. For example they insure their employees but not themselves. Research to find out what is the minimum required for you keep the doors open. Shop around for insurance brokers. You will find that most rates are competitive and the difference is in the service provided to you.

Step 9 – Purchase Equipment and Supplies

Most businesses start with donated or second hand equipment. Used equipment is inexpensive and easily available. At times you may consider buying new stuff if is mission critical. It is important to have new stuff that does not brake and affect positively your productivity. For example if you need a color laser printer you will be better off buying a brand new one and purchasing three year extended warranty than acquiring a refurbished unit. It is expensive in the beginning but, for the next three years you will not worry about this important tool.

The quality of your supplies will reflect on the image your final product projects to the final customer. People notice and like nice stuff. Before jumping into placing orders. Keeping expenses down is important but, to a point. You will start loosing customers or attract only low profit margin bargain hunters. It this fits your plan, it is fine. However, acquiring new customers is always more expensive than keeping the one you have.

It is extremely important to control your inventory from the very beginning. Inventory equals Your Money. The more you see around unused that more of your hard earned dollars are not moving to generate profits.

Step 10 – Establish Bookkeeping and Accounting System

Bookkeeping is very important. You have to establish a system that accounts for all of your transactions. If you use only checks, credit and debit cards your life will be easier. Avoid using cash that will be difficult to account for on your business books. Robust programs like Intuit’s Quickbooks offer very powerful tool to record and monitor your income and expenses. You will only gain if do your own bookkeeping. It will save money and allow a better understanding of how different accounts are interconnected. Use online communities to gain practical knowledge for free. Outsource this duty when you know what are you outsourcing.

If you have a very small operation you can do your accounting too. File taxes with Intuit’s Turbo-tax. It is not complicated and is inexpensive to do it your self. If you have many transactions and need accounts receivable and payable help then you have to split the duty. Do not allow the same employee to do A/R and A/P. Rotate the people who do both duties periodically. These are basic check and balances accounting rules. .