Page 6 - Hanford Chamber Business Toolkit

10 Steps to Starting a Business

Step 1 Prepare a Business Plan.
Even if you are only starting a small business and not trying to nd others to invest in your new idea, writing
a business plan will help you focus on what you need to do to succeed. An e ective business plan will sum-
marize the new business, the industry in general, who are its competitors, its sales and marketing strategy, its
nancial needs, and its growth prospects. Many websites provide free business plan templates to begin.
There are also organizations that will help you write your business plan and there is even software so you can
do it yourself. Here are a few examples:

SAMPLE BUSINESS PLAN 1 SAMPLE BUSINESS PLAN 2

Step 2 Choose A Business Name.
Choosing the right name from the beginning is very important. When you form your business you may nd
out that your name has already been taken or that someone has trademarked that name already. Do some
research on-line to see if possible business names are already taken in the area. There are also trademark
attorneys and other business that can help you search names and prepare trademark registration paper-
work.

Step 3 Choose a Business Structure.
A business can be a sole proprietorship, a partnership, a limited partnership, a limited liability company, or a
corporation. What are the di erences? Do you need to incorporate? Where should you incorporate? You
must consider the legal and tax aspects of starting a business. If your business is a partnership, LLC or Corpo-
ration you will need to legally form the business entity. Most entities require you to le a form with your
state’s Secretary of State O ce to establish its legal existence. Although this sounds di cult there are many
resources available to help you. To better assist you with your structure feel free to reach out and schedule a
counseling appointment with Valley Community SBDC.

Step 4 Obtain a Tax ID Number For Your Business.
If you are a sole proprietor or single-member LLC, your social security number will normally be your tax
identi cation number for both your federal and state taxes (although there are exceptions). However, if you
are a partnership, multi-member LLC, or corporation you will need to obtain an Employer Identi cation
number (EIN) from the IRS, and possibly le other paperwork, such as a form 2553 to become an “S-Corp”.
Visit the IRS website for more information.

Step 5 Obtain a DBA for your business.
If you are a sole proprietor or a general partnership it is a good idea to obtain an o cial “doing business as”
name authorization (a “DBA”). Unless you have formed a corporation or LLC and registered it with the State,
in most states you need to le what is often called a ctitious business name statement. This is obtained
from the county by ling a form, paying a small fee and then publishing the name in a local paper for a few