Owning a business is the dream of many Americans and starting that business converts their dream into reality. While it requires patience and lots of hard work, most small business owners are exhilarated by the ability to work for themselves and do something they love.
As of 2010, there were more than 600,000 small businesses contributing to the Massachusetts economy in an array of industries including: creative ones such as marketing and the arts, financial services, information technology, life sciences, maritime commerce, and renewable energy.
Starting a business involves making many key decisions, both financially and legally, and this guide provides information to help entrepreneurs plan, prepare, and achieve their goal of building a profitable business.
1. Planning Ahead Before Going into Business
Ask yourself why you want to start your own business. Some reasons may be better than others, however, and be aware that there are tradeoffs. For example, you may be able to escape the daily “9 to 5” routine, but you may end up working from 5 a.m. to 8 p.m. instead.
2. Writing a Business Plan
A business plan helps define what you need to launch a business; it summarizes your business in a single document. This plan also creates a map for investors, bankers, and other interested parties to use when determining how they can best help you, and to help them decide whether or not your business is a viable one.
3. Training & Counseling
Taking advantage of free training and counseling services, from learning how to prepare a business plan and securing financing to expanding or relocating a business, can help your business succeed.
4. Choosing a Business Location
It’s important to consider several factors when deciding on the location of your business. For the most part, the location of your business will be dependent on such things as ease of access, proximity to competitors, and zoning laws.
5. Obtaining Financing
Every business needs capital to start or expand. This can come from savings, home equity, or friends and family. However, financing your business doesn’t just have to come from capital you have provided. The Small Business Administration’s (SBA), Loans and Grants search tool can assist potential business owners in finding federal, state, and local government financing programs to help you start and grow your operation.
6. Choosing a Business Structure
Deciding which form of ownership is best for you, whether a sole proprietorship, partnership, Limited Liability Company (LLC), corporation, S corporation, or cooperative, is important as it will have legal and tax implications for both you and your business.
7. Filing for a “Doing Business As” Certificate
A “Doing Business As” (DBA) certificate is required if the company name is different than your own. A DBA can be obtained through your local city or county Clerk Recorder office where the business is to be located.
8. Obtaining a Federal Employer Identification Number (EIN) Tax ID
New businesses must obtain a Federal Employer Identification Number (EIN) Tax ID; it is used to identify a business for tax purposes.
9. Registering your Business with the State
Corporations, LLCs, partnerships, and other business entities need to register with the Massachusetts Secretary of State before conducting business in Massachusetts.
10. Obtaining Business Licenses and Permits
Staying up to date with federal, state and local rules and regulations surrounding your businesses licenses and permits will keep you operating legally.
11. Understanding Employer Regulations & Responsibilities
Learning the legal steps you need to take to hire new employees is an important step for any new business. There are specific requirements regarding employee health and safety standards, health insurance, taxes, minimum wage, and unemployment insurance to follow as well as certain tax obligations that need to me managed.