Starting Your Own Business: First Steps to Living the Dream

If there's one dream that most people share, it's that dream of becoming one's own boss. Most of us would gladly put in 12-16 hour days to make our own businesses work, while we'd be mostly unlikely, short of some whopping overtime pay, to do so for anyone else.

For folks interested in outdoors work, like landscaping or building, little more than a home office, a truck, and a few other pieces of equipment are required. But for those of us who want to turn our passions (or our hobbies) into our occupations, the best bet is to house one's business in a shop or store. That way, you can bask constantly in the warm glow of your treasures and show visitors each and every item they want to see, making that special connection that can mean the difference between a looker and a buyer.

But before you get to that point, you've got to take care of all the little things that stand between you as a private citizen and you as a shop owner. Before you buy your first set of personalized address labels, there are a few things you'll need to accomplish on your very first steps along this path.

Obtaining your funding

If you're setting up shop for the first time, it's unlikely you're going to start out with a ten thousand square foot mega-store and a staff of hundreds. When you get ready to order your new commercial display cases and thousands of cheap checks for your business — it's important to remember the whole point is to start small.

This being the case, you'll probably make do with what financiers call "zero-stage funding" — that is, money that you funnel into the business from your own savings and from loans you've obtained. The loans may be from Aunt Gertrude or from Vito's Friendly Loneshark Service; they're all the same at this point, though you may live to regret your funding sources later (Aunt Gertrude can get mean).

Unless you've figured how to obtain vast amounts of energy from lima beans or have invented the latest Pet Rock, you probably won't have the option of "first- and second-stage" funding: that is, big money from venture capitalists and large financial institutions.

However, don't neglect the Small Business Administration (SBA) during your financial planning. The SBA delights in arranging low-interest loans to help small businesses get off the ground. Keep in mind that to the SBA, a "small" business is defined as one with a relatively low sales volume and fewer than 500 (!) employees.

For the time being, you'll have to save the number 500 for you first order of return address labels. The SBA will want you to have some of your grubstake already assembled, but they may be willing to help you acquire the rest.

Getting right with the government

Once you've acquired your start-up money, there are dozens of other little things you'll need to take care of, from finding a good cash register to figuring out how make your Quicken Business Checks print out of your new accounting software.

But before you run out to buy your display cases, you should get right with the government first. This means you'll need to research what, exactly, your local city or municipality requires of merchants.

One thing you'll certainly need is a tax number, so you can start collecting city and state taxes on every item you sell. Once you have a tax number, you'll be assigned a date when you have to start declaring your dreaded quarterly taxes.

You may also need to get a business license, and at the very least your city will probably require what's called a "certificate of occupancy," which certifies that your proposed location is suitable for the type of business you plan to operate.

In this event, you'll need to have a location already chosen, and you'll need to give city access to it. The city will charge you a small fee for the inspection, usually less than $100; but that's just to take care of silly things like paperwork, filing costs, and paying the city inspector. So when you finally have your certificate of occupancy in hand by all means lay out a few thousand bucks on those beautiful Plexiglas sports display cases and make your dream a reality.

Published with permission (FCDMInc)

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