Setting up a new business is a great opportunity to chase your dreams. However, you still need to deal with a number of legal templates and other basic requirements. In this blog post, we will guide you through setting up a small business.
Putting Together a Business Plan
Every great small business starts with an idea and a place in the market. Learning that there’s a niche for your service is often the first big step. This might involve a round of market research to check if there’s demand for your services.
You must then start creating a formal business plan. This includes an executive summary of the company and its long-term goals. You should also provide full details of the services you plan to offer.
Finances are naturally a big part of this document. You’ll have to include income projections and an outline of your budget and expenses. Simply setting this out can give you a better idea of the next steps.
Choosing a Business Structure
You also need to decide on the structure your firm will use. The most common options include:
- Sole proprietorship: This is an unincorporated business that you operate entirely by yourself. However, you’ll still be liable for the firm’s debts.
- Partnership: This is similar to the above but with two or more owners. Each partner will be responsible for (as well as liable for) the business.
- Limited Liability Company: An LLC is more flexible and helps you avoid liability for the company’s debts. However, it’s far more complex to run.
- Corporation: The company is an entirely separate legal entity. However, you will need to split control with shareholders and a board of directors.
Important Documents for Small Businesses
Setting up a new small business comes with a lot of paperwork. However, the exact documents you need to fill in will depend on your industry and services. With this in mind, here are common forms that small businesses must be aware of:
- Articles of Incorporation: If you plan to be an LLC or corporation.
- Non-disclosure agreement: To keep your business secrets safe.
- Partnership agreement: If you’re operating the firm with a partner.
- Freelancer agreement: For hiring independent contractors.
- Employment contract: For hiring long-term company employees.
- Lease agreement: If you plan on renting a space for your business.
- IP assignment agreement: For determining ownership rights.
- Sales contract: For selling goods or products to customers.
- Liability waivers: If your events/services carry a degree of risk.
- Loan agreement: If your business requires external financing.
This is just a small selection of what your company might need.
Helpful Software and Services for Small Businesses
Small businesses can stay competitive by integrating technology into their strategy. Many of the available options are scalable to a smaller firm’s financial situation. Here are eight examples of tools your company should look into:
- Accounting software: This will help your firm manage payroll while keeping a close eye on expenses. These tools also make it easier to generate invoices.
- Customer relationship managers: CRMs will let you track leads and build connections with clients or customers. This is essential for ensuring long-term loyalty.
- Task managers: A basic tool for tracking tasks and deadlines can be really useful. You’ll also be able to use these to assign tasks to your employees.
- Graphic design software: Good visuals are critical for any firm’s marketing plan. These tools will help you put together new online posts and ads easily.
- Social media managers: It’s also important that your social media is equipped to boost your business. This can include scheduling posts at the right times.
- E-commerce platforms: Some sites let you create a store on their platform. This can be your main way of taking orders or simply an extra revenue stream.
- Communication tools: You’ll require a central hub to get in touch with your team or contractors. This could include free video conferencing software.
- Web builders: Setting up your own website is essential for establishing your company’s online presence. There are plenty of easy-to-use tools that can help.
Setting Up a Business Bank Account
Too many people use their personal bank accounts for their business. This can leave them more liable for debts, while also making it harder to budget. Make sure you get a business account as soon as possible. Different banks offer a range of business-friendly plans.
This also lets you build a business credit score. You can use this to take out a business-specific loan in the future. It’s even possible to connect this directly to your accounting software. You will then be able to more easily monitor the company’s cash flow.
Conclusion
Even small businesses take a lot of work. However, with the right legal documents and software, you’ll be able to chart a clear course ahead. Above all else, however, make sure your firm has a strong niche in the market.
