By Aimee Claire, TSB Contributor
Many people have big dreams of running their own company, but don’t know where to begin. Deciding to open a business is a big decision and doing so comes with a lot of risk; however, that leap can be made to seem a little less daunting by preparing in advance for the many first steps one must take along the way.
Starting one’s own business takes plenty of planning, making essential financial decisions, and fulfilling legal obligations. Simply keep these things in mind when getting started.
Choosing a location
The location of a new business is integral to its success. It is therefore very important to choose a location in which the business will thrive. Small businesses play a key role in the well being of Texas’ economy. Accounting for a majority of the state’s economic production and hiring, small businesses bring dynamic ideas, innovative services, and new products to the marketplace each and every day.
McKinney is a great place to start a new company
Offering an incomparable lifestyle and an exceptional business environment that can only be described as the perfect marriage of big city resources and small town charm, McKinney, Texas offers a diverse and unique mix of industries for any entrepreneur hoping to break ground. Home to a number of large companies as well as independent, small businesses, McKinney offers one of the most successful business districts in the state.
Select a business structure and get registered
In addition to choosing a location, one must elect the type of business entity to be established. There are a number of business structures available: partnership, sole proprietorship, S corporation, corporation, Limited Liability Company (LLC), cooperative, or non-profit, however, where you register will also play a role in the type of structure that is best to choose. The business structure will also determine the type of income tax return one will have to file. In the United States, the government imposes four basic types of business taxes including the income tax, taxes for employers, self-employment tax, and excise taxes.
Remember to obtain a list of federal, state, and local licenses that will be required to run the business. Not all businesses will require the same licenses and permits, so it is necessary to do quite a bit of research in advance before the doors are opened for clients and customers.
Preparing for the IRS
In addition to registering with the state, new business owners must also prepare for their dealings with the Internal Revenue Service (IRS). One of the earliest things to take care of is requesting an Employer Identification Number (EIN) from the IRS. The EIN helps the IRS to keep track of all business dealings, similar to a Social Security Number. With more and more businesses relying on online banking, the EIN comes in handy when opening an online banking account, establishing business credit, and filing employee tax withholdings.
Other considerations to remember
Starting a new business in McKinney, or in any other location, goes well beyond choosing a location, business structure, registering with the state, and getting an EIN. A business plan should be prepared before anything else, as it is the blueprint to the company itself. The business plan will map out how one plans to start and run the company successfully and will be required by banks and investors during the financing process. Additionally, potential employers must understand their responsibilities to their employees and the legal steps required to hire them. Therefore, it may be required for one to obtain additional training or business counseling to ensure the most success.