How to Become an Entrepreneur: Overview
So, you want to become an entrepreneur. It's not for everyone, but with some start-up capital, a great idea, a solid business plan, and a little luck, it can be a richly rewarding career path. Writing a business plan should be the first step every small business entrepreneur makes.
This process forces the small business entrepreneur to think about the details of the business, especially the financial details. After the plan is written, the small business entrepreneur can think about negotiating a lease, the business' legal structure, required documents, and insurance.
This is a brief overview of how to start a business and become an entrepreneur, with links to more in-depth articles. For more resources, see FindLaw's Starting a Business section.
How to Become an Entrepreneur: First Steps
What kind of business do you want to start? It helps to think very specifically about what products or services you want your small business to be about. Decide on details like:
- What specific products or services you want to sell,
- Your products' (or services') pricing,
- How much inventory you will need to get started,
- Who your target customers will be,
- Possible locations of your business,
- The market conditions,
- How you will stay ahead of your competition,
- How much money you will need to launch your business,
- How much money you will need for overhead costs and inventory, and
- How much money you could bring in initially
After you have worked out these details and calculated the financial stability of your business, you can begin focusing on the steps to actually launch your small business.
Decide What Legal Structure You Want
There are several types of legal structures you must choose from:
Once you have chosen a legal structure, you can begin forming it and choosing a name for the business.
Collect the Required Documents
There are certain documents you must have as a small business entrepreneur.
- File a business license with the local tax collector's office.
- If you are going to sell products, apply for a seller's permit.
- Unless you're a sole proprietorship with no employees, file both federal and state employer identification numbers for each of your employees.
- Certain types of businesses need a specialized permit, like a vocational license or environmental permit. Check your state law to see if your business needs a specialized permit.
Choose an Insurance Plan
Every small business entrepreneur needs to assess his or her risk of liability and choose an insurance plan accordingly. For example, a doctor needs to buy malpractice insurance and choose a malpractice insurance plan that fits his or her liability risk. Be sure that all of your insurance needs are taken care of before you even open your doors.
Create a Bookkeeping Plan
Small business entrepreneurs who create efficient and reliable bookkeeping in the beginning have a much easier time running their businesses and are less likely to fall behind in record keeping, bill collecting, and paying expenses.
Consult the Experts
There is a plethora of self-help books and free online resources to help you through starting your small business. Even with all of this help, it is best to consult accountants and tax experts annually to maintain your financial organization, ensure your taxes are in order, and avoid the losses incurred from disorganization and oversights.
Talk to an Attorney for Legal Guidance
While you will undoubtedly take on a great deal of responsibility and wear several hats if you decide to become an entrepreneur, it's usually best to leave legal matters to the attorneys. Consider meeting with a business and commercial law attorney before opening your new business.