Q: I am thinking about starting a business but don’t know what steps I should take. Can you give me some direction in this regard?
A: Whether your business is located in Florida or elsewhere, the first thing you should do is construct a written business plan. I see too many entrepreneurs that invest a lot of money with start-up expenses before doing the necessary due diligence.
A well-constructed business plan will address all of the necessary steps you must take in the formation of a new business, including:
- Select a Legal Structure – Form a Limited Liability if yours is a sole proprietorship or one with just a few partners. www.sunbiz.org
- Register a Fictitious Name – A Fictitious Business Name (FBN) is the legal term for an assumed name which a business uses instead of the name of the owner, also known as a DBA (short for “Doing Business As”) name. The use of a registered Fictitious Business Name allows individuals or businesses to use trade names without having to go to the expense of creating a separate legal entity. www.sunbiz.org
- State and local Licensing – Depending on the type of business you are operating, it may require either of both. See www.myflorida.com/dbpr and www.sunbiz.org
- Apply for a Federal Employer Identification Number (EIN) – Required unless you are operating as a sole proprietor (individual). www.irs.gov
- Register to pay Federal, State and Local Taxes – These may include Federal Employment Tax www.irs.gov, Florida Sales & Use Tax www.dor.myflorida.com, and local Business Tax Receipts and Tangible Personal Property Taxes.
In addition to the above, there is the big hurdle of securing adequate financing. Most small businesses fail in the first two years because they have underestimated start-up costs and ongoing monthly expenses incurred before they reach the break-even point. This is the point where income and outgo merge.
All of these issues can be more easily understood if one takes the time to construct a viable business plan. The www.score.org website offers a free outline for a start-up business which includes financial templates for determining start-up expenses and a 12-month cash flow projection. These forms can be found at https://tinyurl.com/zfzvje8
You will undoubtedly need to engage the services of an attorney, CPA and commercial insurance agent to help you understand the complexities of owning and operating a small business. Also, the volunteer counselors at a nearby SCORE Chapter stand ready to assist you in developing your business plan.