10 Steps to Starting a Business with End-Game in Mind

By Keith Blazek0 Comments
 
Are you thinking about starting a small business or are you currently a business owner? As we’ve previously discussed during Small Business Appreciation Month, business ownership is deeply rooted in the American dream. In fact, a 2012 U.S. Census Bureau study reported 28.4 million small businesses were operating in the U.S. during the time of the survey and accounted for 48.4 percent of all U.S. employment. Additionally, 382,000 new small businesses were started in the first quarter of last year and new start-ups continue to join the business landscape on a daily basis.
 
The Small Business Administration provides resources and education to help small business owners. Below we’ll detail their 10 Steps to Starting a Business. It provides an important checklist for current business owners to review, but it also could be a powerful first step for your retirement savings.
 
Turning Your Investing into a Business to Save More for Retirement
Small business owners are rewarded by the federal government with the most powerful retirement savings plans, partly because of the significant retirement hurdles they must face, as described in our most recent blog post.
 
But many investors may unknowingly be leaving money on the table by not considering themselves for these plans. Our Company Founder and Chairman of the Board, Richard (Dick) Desich, has been speaking about this strategy for years, saying if you are already investing, turn your investing into a business and let it work for your retirement.
 
If you routinely invest in rental properties or rehab and sell investment property, for example, you could make the argument you are in the “business” of investing in real estate. Rather than maxing out your IRA contributions (standard limit for 2015 is $5,500 per year), small business plans allow the investor to contribute anywhere from $12,500 to $53,000 per year, depending on the type of plan. This typically allows for greater tax deductions and larger pools of tax-exempt funds to use in your investing practices.
 
While each situation is unique and requires special attention, individual investors may qualify for these plans and can increase their investing potential when used effectively. Please speak to a Senior Account Executive at Equity Trust to learn more about these account types and download the free training at the bottom of this post to learn more.
 
10 Steps to Starting a Business, according to the Small Business Administration
Starting a business should not be taken lightly. It involves planning, key financial decisions, and a series of legal activities. The following list was provided by the Small Business Administration to help you plan, prepare and manage your business. The SBA website provides a variety of resources and additional information that covers the 10 steps in more detail. As always, it is important to consult with your CPA, attorney, or financial professional before starting your business.
  1. Write a business plan - A business plan is critical to your business’s success. It provides a roadmap for your business’s success and generally projects three to five years ahead and outlines the route you intend to take in order to grow.
  2. Get business assistance and training – It is important to make sure you are making a sound business decision, backed by research and supported by a team you trust. The SBA is a great resource to help you get started.
  3. Choose a business location – This is a decision that is critical to a business’s success, but is often overlooked. You should asses the demographics in the area, applicable state and local laws and taxes, nearby competition, and supply chain management to name a few. Take your time with the planning and research in this step.
  4. Finance your business – How do you intend to raise money for your start-up? What type of loans should you consider and what do you need to qualify? Make sure you consider the cost the initial start-up as well as the any financing that may be needed within the first few years of growth.
  5. Determine the legal structure of your business – The legal structure of your business will determine which income tax returns you have to file and how it will be regulated. Common legal structures include sole proprietorships, partnerships, Limited Liability Companies (LLCs), corporations, S corporations, non-profits, etc.
  6. Register a business name (“Doing Business As”) – The name of your business is important for the brand you intend to build. If you choose to name your business anything other than your personal name, you will need to register a “Doing Business As (DBA)” name and must be registered with the appropriate authorities.
  7. Get a tax identification number – A Federal Tax Identification Number is known as the Employer Identification Number (EIN) and is used to identify a business entity. You will most likely need to apply for and obtain an EIN for your business.
  8. Register for state and local taxes – Each state and locality has its own tax laws and you need to ensure you understand and are compliant with them, in addition to any federal requirements.
  9. Obtain business licenses and permits – Depending on your business, you may need to obtain certain federal and state licenses and permits in order to run your business.
  10. Understand employer responsibilities – Owning a business is a major responsibility, especially when you are responsible for the livelihood of your employees. Make sure you understand and are prepared for all of the responsibilities that come with business ownership.
Free Education – Inside the SIMPLE, SEP, and Solo 401(k)
Equity Trust is committed to empowering business owners across America to build the retirement they deserve, and that can start with maximizing your retirement plan contributions and minimizing your tax liability. The National Education Specialist of Equity Trust's education affiliate Equity University recently presented a webinar on the powerful small business plans afforded by the federal government and how many investors may be surprised that they qualify for these plans. Whether you already own a small business or you invest personally, this free audio download will share how you could contribute more to your retirement (and potentially have larger tax deductions) to increase your wealth building.

 
To your success during this Small Business Appreciation Month.