Business Start-ups: Starting a Company 101

Small Retail Business. Photo: Ping Ping/Flickr (CC)

Starting a business start-up can be a daunting and task filled with a multitude of risks. Develop a plan based on industry research to maximize your chances of success. Determine business registration and licensing/certification requirements, and develop a basic knowledge of employment compliance issues and other reporting requirements.

Business Registration

Register your business. This Registration is required in most jurisdictions even if you are operating the business as a sole proprietorship. There is generally an associated fee along with an application that requires basic contact information of the business owner, as well as a general description of services. In addition to the assurance a customer gains in knowing who they are doing business with, registration assists in protecting a trade name and may be required to obtain a sellers permit. For instance, California's sellers permit allows a business to sell merchandise, vehicles or other tangible personal property at the wholesale and retail level.

Business Entity

There are initial choices to be made regarding how to operate a new business. The oldest form of business entity is the sole proprietorship. It is an unincorporated business that operated by an individual who assumes full responsibility and liability for the business. Other options include partnerships, corporations and limited liability entities.

Licenses and Certification

Secure the license, permit or certification required to operate your business. Failure to comply with the regulatory requirements can subject the business owner to a speedy shut-down by the industry's regulatory agency. The new business is also exposed to financial sanctions, as well as civil liability from unsuspecting customers and other third parties who claim damages from the unauthorized services. Contact a professional association within the industry or an attorney to learn about all licensing and certification requirements for new entrants.

Business Finances

Calculate your start-up expenses before staring a company. Include the costs of leases, equipments, supplies, inventory and labor. This calculation will serve as a basis for understanding whether adequate financial resources are available, or whether a loan is necessary. The U.S. Small Business Administration's website provides a wealth of information on loan programs that may be helpful for new entrepreneurs.

Human Resources

Understand the issues related to managing human resources. Research labor laws related to administrative and record-keeping issues for the employer, such as workers compensation, Social Security reporting and taxes. Familiarize yourself with employment laws related to hiring, wages and hours worked, termination and employee benefits. The U.S. Department of Labor's website features a significant amount of compliance assistance material and resources.

References:

• U.S. Small Business Administration: SBA Loan Programs
• U.S. Department of Labor: Compliance