Frequently Asked Questions About Starting A Business
Building a startup is no joke, so if you’re on your way to becoming an owner – Congratulations! If you’re still considering it, well here are some frequently asked questions about starting a business, and their answers.
How do I come up with a good name for my company?
First, come up with a variety of names to consider. Then do a Google search to see what's already been taken, and you'll be able to eliminate 95% of your options. It should be simple to spell. Make it fun. Choose a name that makes sense and that people will understand. Make sure you can get the domain name by conducting a trademark/tradename search on the name.
What kind of business should I start?
Choosing a business in a field in which you are already knowledgeable will provide the least amount of resistance to starting a business, even if it is not always a smooth path. List your talents, skills, and strengths and narrow them down to the ones that can be monetized. Also consider any company you start as an investment in your own capital. You could make money by working for someone else, but you've decided that starting your own business will give you the best return.
What are the most difficult aspects of starting a business?
• Shortage of capital and cash flow
• Having a good business plan
• Coming up with a great product or service
• Sticking to it
• Working more than you expected
• Getting through the frustrations of being constantly rejected by customers
• Hiring good employees
• Knowing when to fire bad employees
• Having to wear so many hats
• Managing your time
• Maintaining some kind of work/life balance
What permits, licenses, and registrations does my company require?
You may require the following permits, licenses, or regulations, depending on the nature of your business:
• Permits need for regulated businesses (aviation, agriculture, alcohol, etc.)
• Sales tax license or permit
• Certification for registered business
• Home-based business permits
• City and county business permits or licenses
• Zoning permit
• Sellers permit
• Health department permits (e.g., for restaurants)
• Federal and State tax/employer IDs
Want more insight about building a business? Check out our blog posts
Is it useful to have a business plan?
A business plan can help you think through what you want to do with the product or service's development, marketing, financial projections, and other aspects. After that, seek advice from reputable business and financial advisers. Many startups, in reality, must deviate from their original plans in order to make the business work.
How much capital do I need?
It's a good idea to estimate your first-year expenses and the time it will take to break even. Many failed entrepreneurs have taken out loans or home equity lines of credit only to discover that it wasn't enough and that they needed to start bootstrapping their businesses. Although some businesses manage to recover from such disasters, it's not something you want to do in the first place. By conducting a cost analysis, you will be able to avoid this easily.
Where do I get capital from?
There are several ways of acquiring the capital you need to start a business. Here are some examples;
• Personal funds
• Credit cards
• Friends and family
• Angel investors (check out this TEF grant opportunity)
• Bank loans/SBA financings
• Venture capitalists
• Equipment loan financing
What are the setbacks I should expect?
The most common first-year setbacks vary by business, but one of the most common is failing to meet revenue expectations. This is frequently due to a lack of proper foresight when estimating the amount of business your company will bring in. The loss of talent is another common stumbling block. This is less of an issue if you're starting a business by yourself and intend to run it as a sole proprietorship. If you're starting a business with a few partners, however, it's a speed bump that nearly every business faces. The best way to deal with a situation like this is to have an exit strategy in place in case any of the primary partners decide to leave the company.
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