How to Start a Business in America in 10 Steps ?
If you want to start a business in America then you need to pay special attention to some things. If you follow the steps mentioned below one by one. At the same time, you maintain hard work and consistency. Then you will definitely become a successful entrepreneur.
1. To Know The Market
If you do market research before starting a business. So this will benefit you a lot. With this, you will be able to understand the problem of the market in a better way. You will also be able to find your target audience. Along with this, you will also be able to know, what are the problems the customer is facing in the market. Accordingly you will be able to introduce your unique product in the market.
With market research, you will get to know about the economic trends. Which will be of great use to you. Because you will know how much inflation is, which product is in demand, how much is supplied. Along with this you will also get demographic information. So that you will know how many people are, how old are they, what is their wealth, about their family and what are their interests.
If you spend some time in the market and try to learn. So you will know whether the customer is willing to buy your product or not. Along with this you will get to know about the market size. How many people are interested in buying your product. Along with this, it is also very important to know the income of the people. This will give you information about economic indicators.
You will know where your customer lives. How far can your business reach? At the same time it is very important to know your competitor. At what price are you making your product available to the customers as compared to the competitor. What is the quality of your products compared to your Competitor.
The best way to do market research. You should watch the interviews first. Along with this, the focus should also be on surveys. USA Small Business Administration provides counseling service. The Small Business Administration provides service through a resource partner network. Which you can take help of.
You can do market research on some parameters. Like how much is the market share. Along with this what are your strengths and weaknesses. What are your chances to enter the market? What are the barriers to entry for you? Which indirect competitor is he? that will affect your success.
2. Business Plan
It is very important for you to have a business plan before starting a business. Because with the help of business plan, you move in one direction. Along with this, it also helps you to run and grow your business.
Business plan also helps you find business partners and investors. If an investor liked your business plan. So he will easily invest in your company.
How To Make Business Plan
There are a few things you should keep in mind while making a business plan. As such you must mention your mission in it. Along with this, you must also mention about your product or service and the vision of your company, its leadership, team, employees etc.
You must mention in the description of your company, what problem your business is solving. Also what competitive advantages does your company have. Where is your company’s office or store located?
While making your business plan, you should also ask some questions. Like what your competitors do. How things work out for them. Can you do it all better than them? You should also mention the answers of all these in it.
While creating a business plan, you should also tell your readers whether your company is a sole proprietor or a limited liability company. You should also share plans related to Intellectual Property like Copyright, Patent. As far as marketing or sales is concerned.
So you should also mention how you will attract and retain customers. Also, how much sale and how will you take out the sale. As far as funding is concerned. So you should explain this too. How much funding do you need, over the next few years. You should also describe in detail how you will use the funds.
3. Capital
If you sow the seed and you don’t water the plant. So that plant will never be able to grow. Similarly, making a business plan or opening a company is not enough. You need capital to run any business. Capital acts as water in the plant. Without capital you cannot grow your business.
First of all you should focus on your savings. Or you should save something by doing a job. Then you should invest the same money in the business. Along with this, you can also take some capital from family or friends. Because if you arrange money by yourself, then you will have very less risk in it.
Or you can also use SBA’s investment programs like small business investment company, small business innovation research, small business technology transfer program etc. Or a guaranteed loan is given by the SBA. For which you can apply.
You can also take a small business loan to start a business. This is also a great option. Provided that you should also have a business plan and financial projection for the next years. Along with this, you can also use crowdfunding. Through crowd funding, you raise funds from common people.
Along with this, venture capital is also a very good option. In this, the investor gives you the funding. He doesn’t give you loan or debt. Rather, he takes some ownership of your company in return for his investment. Or takes some shares. There are many benefits of Venture Capital. This gives high growth to your company. Also you do not have to pay any return. You don’t even have that high risk.
4. Business Location
Location plays a very important role in business. Your business location should always be based on your target market or target audience. Along with this, you should also take care of its cost, benefit etc.
Whenever you are looking for an office or a location for your business. So the value of the property there should be very less. If you are renting, the rent should also be very low. Also, there should be a minimum wage because you should avoid unnecessary expenses in the beginning.
Property tax, corporate tax, income tax and sales tax vary from state to state. So you should find the location in that state, where the environment there is friendly for your business. Also, you should visit the website of the state and local government to know the taxes.
State and local governments run incentive programs for small businesses. You can visit the SBA’s offices, the Small Business Development Center and the Women’s Business Center at the state and local levels. You can also visit their website. Along with this, you can also take incentives of the federal government.
5. Choosing Company
When you start a company, you have to get your company registered. That is, how do you want your company to be. You want to form partnership firm or sole proprietorship. You should choose it very carefully. Because this will have a huge impact on taxes.
The first is the sole proprietorship firm. Which is very easy to make. If your company is a sole proprietorship, then you will have complete control over your company. But at the same time you will not be able to increase your business with Sole Proprietorship. If you want to take less risk and keep your business under your control. Then this is a better option for you.
If you are finding a man with whom you have a good bonding. He should have good knowledge of your business. So you can form a partnership firm with him. However, many people can also participate in this. There are two types of partnership firm. One partner has unlimited liability in the first limited partnership, limited partnership, while all other partners have limited liability. In the second Limited Liability Partnership, all the partners have limited liability.
The third is a Limited Liability Company. In this we get the advantages of both corporation and partnership firm. Our personal liability is protected under an Limited Liability Company. In this, both personal assets and business assets are different. If you have the ability to take medium to high risk. So you should get your company registered under this firm.
Cooperative business is the business which is operated or owned by all its members. It consists of the elected board of directors. Whose profit gets divided among all its members. In this, no personal one person owns this type of company. Everyone cooperates in this. Everyone has voting power.
6. Company Name
If your company name is unique and it matches with your business. So you should first register your name. So that no one else can copy.
First of all you should register your entity at state level. So that the state can record the data related to your company. No one can copy your entity name.
After that you should take the trademark of your company. A trademark protects you at the national level. So that no other company in America can use your trademark name. This is very important.
If you create your company’s website, you will need to have a domain name. If you take that domain name once, then no one can use it again. It shows your online presence. You will have to renew your domain name on a regular basis.
7. Register Your Business
If you want government incentive then you must register your business. Even if your company is legal. You start your business with federal agencies. So you get a Federal Tax ID. The federal government also gives you trademark protection and some tax exemptions.
You must file for a trademark with the United States Patent and Trademark Office. If you have an NGO or a non-profit organization, then you have to get your business registered with the tax exempt entity with the IRS.
If your company is a limited liability company, corporation, partnership, or non-profit company than you can register with any state. You can visit to the secretary of state’s office, a business bureau or a business agency to be registered your business.
Some cities demand to register your DBA. Whereas local governments issue licence and permit requirements. So visit on local government’s websites to know more things.
8. Tax ID
Federal tax ID number is also employer identification number. Once your business is registered after that you should apply for an EIN. If you pay your employees and apply for business licenses and permits. You are eligible to get federal tax ID number.
You must pay state taxes to get state tax ID numbers. This number does protect you from identity theft. Tax matters differ from state to state. That’s why you should first check the state website. The laws regarding income tax and employment tax should be understood.
9. Applying For Licenses
If you are doing international business, as if you are exporting goods to the US. So those business activities of yours will be regulated by the federal agency. If something is prohibited, you need to get a license or permit. There are separate departments, boards and administration for each sector.
If your business activities are local, such as farming, restaurants, retail and construction, then you need a state license or permission. Some licenses also have to be renewed from time to time. You can do research according to your state. You can visit the state website to know about the license.
10. Open Bank Account
Once you have registered your firm. All other licenses are completed. So you need to open a business account. Which will bring this benefit to both you and your customers. You will need a federal EIN to open your business account. Without it your business account cannot be opened.
There are a few things you should keep in mind before opening a merchant service account. Like how much is the discount rate, transaction fee and address verification service fee. Also, if your business is not able to fulfill the minimum required transaction of the bank. So what will be the monthly minimum fees, which will be charged.