Help To Start Your Business

Help To Start Your Business

If you’re planning to start a business, you may be wondering where to begin and don’t know where to turn for help. You can find many educational articles to help you at https://stepbystepbusiness.com. Here, though, we will offer some tips on starting a business, by using an example – a snow cone business! You can also read a complete step-by-step guide.

Decide if the Business is Right for You

You may have a great business idea, but you need to weigh the pros and cons of the business to decide if it’s really the right path for you. For example, a snow cone business is easy to start, you can have a mobile food cart, which provides flexibility, and startup costs are relatively low. However, it’s a business that’s going to be seasonal, so you’ll have long periods of downtime. You’ll also need to get various licenses and permits such as a food handler’s permit and a food services license.

Just look at the pros and cons of your business idea before you make a final decision.

Determine Your Startup Costs

You need to know exactly how much it’s going to cost you to be able to start making sales, and also determine where you’re going to get those funds. For a snow cone business, you’d have the following approximate costs:

  • Business formation (such as an LLC) – around $100, varies by state
  • Business Licenses and permits – $100 – $200
  • Business insurance – $100 – $300
  • A website to market your business and share your locations $400 – $1,000
  • A cart and snow cone equipment $2,500
  • Ingredients $250 – $500

 

So, you’re going to spend in the neighborhood of $4,000 before you can start selling your snow cones. You may have your own funds to get started, or you can turn to friends and family for financing help. Alternatively, you can apply for a bank loan or an SBA loan.

Know How Much You Can Make

You’ll need to realistically estimate how much you can really make from your business idea. First of all, you need to know the price you’re going to charge. The average price of a snow cone is about $3. Then you need to estimate how many sales you think you can make. For a snow cone business, your in-season time will probably be May to September unless you live in an area that is warm year-round. So, if you only work 5 months, and you sell 500 snow cones a week, you’ll make about $30,000 in revenue.

Do an estimate for your business idea. Will you be making enough to support the lifestyle that you want?  Be sure to be realistic about your projections.

Create a Full Business Plan

You should create a business plan to help you think through every aspect of starting and running your business. It will also be necessary to have a business plan if you apply for a bank loan.

Your business plan should include:

  • Executive Summary: Brief overview of the entire business plan. Write this after your plan is complete.
  • Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
  • Product and Services: Describe your products or services in detail.
  • Market Analysis: Assess market trends.
  • Competitive Analysis: Analyze main competitors, assess their strengths and weaknesses, and try to find a way to give your business a competitive advantage.
  • Sales and Marketing: Develop sales and marketing strategies.
  • Management Team: Overview of the management team, detailing their roles and professional background.
  • Operations Plan: Your company’s operational plan is the logistics of how you will run your business on a day-to-day basis.
  • Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.

 

Set Up Your Business Entity

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return. You do not have to register your business with the state.
  • Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns. You usually do not have to register a partnership with the state.
  • Corporation – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. You must register your corporation with your state.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts. You must register your LLC with your state.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

 

Finally…

  • Apply for an Employer Identification Number (EIN) with the IRS
  • Apply for business licenses and permits that may be needed at the state and local levels
  • Obtain business insurance
  • Open a business bank account

 

Launch Your Business!

Now you’re ready to start marketing your business and make some money!  You can promote your business on social media sites and try to drive traffic to your website so people can learn about your business. Then just follow your business plan and watch those sales start to happen!

This content is brought to you by Esther Strauss

iStockPhoto

The post Help To Start Your Business appeared first on The Good Men Project.

Back to blog