Starting an LLC: 3 Things Every Businessman Should Do
The time has finally come. It’s time to loosen the tie, pack that cubicle, and walk out of that office with the exhilaration and boldness of a new businessman. Why? Why not. With the right marketing plan and elevator pitch, the product will sell itself, right? Or at least it should. There are quite a few things to consider when starting your own business. It may seem like a lot. But that doesn’t mean you can’t wade through the waters of paperwork and technicalities with a little help. Everybody has had some help. Even self-proclaimed “entrepreneurs” who claim they didn’t have any. There are resources and consultants out there that can get you on your way to financial independence and self-sustained, self-generated income. Their sole purpose it to help you succeed in the business world. But where should one start?
Have a Good Product
Before anything, you need to have a product or service. It needs to be good, too. It needs to be something that, based off of figures and tests, you can confidently sell to the public. Yes, your friends and family might tell you that your cupcakes are amazing and you should totally sell them. But that’s only part of the puzzle. Market research is absolutely necessary. How? Give out free samples. Join local events and organizations and see how people react via expression, reaction, and even a questionnaire. Collect as much info as you can regarding your potential target market instead of using assumptions.
Create A Business Entity
Your next step is to be recognized as a business entity. This entails a good, original name, and the choice to be legally recognized. You need to do this so that the government sees you as a business and applies tax codes pertaining to you. Your best bet is to go with a Limited Liability Company. So when you start an LLC, your income and your cost funnel through that entity. On one hand, it does seem more enticing to go with a sole proprietorship at first. But know that this is just a name. There’s no separation of identity with the owner like in an LLC. On the flip side, with the LLC, you gain all the benefits, from a pass-through tax standpoint, as both a corporation and a partnership. That’s what “limited liability” means. As the owner, you are shielded from the potential lawsuits, debt, and other shortcomings a business might endure during its growth.
Gather All Your Documents And Info
Your next few steps should focus on how your company is going to be run, who takes responsibility in the event of a lawsuit, and obtaining a certificate from your state. The document pertaining to how the business will be run is called an Operating Agreement. It states who is in charge, what you are doing, where, how finances are distributed, and what happens if a member dies. Although not all states require this, it is still imperative to have this document laid out. This is the organizational framework of your entire operation. Organizational Paperwork pertains to the address, duration, and registered agent. A registered agent is, on paper, the individual who will take the legal and financial responsibility of the business. That person is usually anyone who is over 18, but it is highly advisable to choose someone with the financial and intellectual capacity to handle the liability.
That’s it! Those are the three things that every businessman should do. The basic framework for starting any business is to: have a product and name, make the choice to start an LLC, and register all paperwork with your local government. From that point on, it’s profit all the way.