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May 06, 2024 / Natasha Koons
What to know when starting a small business

What to know when starting a small business

You’ve been thinking about it for a while and have decided that now is the time to open your own business. It’s exciting, but at the same time a little nerve-wracking. Whether you’re starting a retail shop, a consultancy, or an online venture, there are several essential aspects to understand about operating a small business.

  • Business plan: A well-thought-out business plan serves as a road map for your venture. It outlines your business goals, target market, products or services, marketing strategies, financial projections, and more. A solid business plan not only helps you clarify your ideas but also attracts investors and lenders.
  • Legal structure: Choosing the right legal structure for your business, such as sole proprietorship, partnership, or LLC, has significant implications for taxes, liability, and operations. Consult with a legal advisor to determine the most suitable structure for your needs.Graphic of a businessman with a larger than life game plan on a clipboard behind him.
  • Licenses and permits: Depending on your location and the nature of your business, you may need to obtain various licenses and permits to operate legally. Research local, state, and federal requirements to ensure compliance with regulations.
  • Financial management: Effective financial management is crucial for the success of any business. Set up a separate business bank account, track expenses and revenues diligently, and consider hiring an accountant to assist with bookkeeping, taxes, and financial planning.
  • Funding: Determine how you will finance your business. Options include personal savings, loans, crowdfunding, or government grants. Carefully evaluate each option and choose the most appropriate funding sources for your situation.
  • Legal and insurance considerations: Protect your business by obtaining appropriate insurance coverage, such as general liability insurance, property insurance, and workers' compensation insurance. Be sure to draft contracts, agreements, and other legal documents to safeguard your interests.
  • Create a team: Starting your own business is too big a task to take on alone. Consult with a banker, an attorney, and an accountant to make sure you are taking the right approach and protecting your interests.

Remember that the keys to any business are flexibility and adaptability. Be prepared to react to changing market conditions, consumer preferences, and unforeseen challenges. Stay agile and responsive to feedback and be willing to adjust your strategies and plans to stay competitive.

 

Natasha Koons is a business banker for F&M Trust.

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