Forming a business

4 Tips to Keep in Mind When Forming a Business

As new business opportunities continue to grow, the decision to start a small business is becoming more popular. Forming a business can often seem to be a confusing process and includes items such as selecting a name, having the finances to invest in your business and the possibility of obtaining an office space that is welcoming to employees and clients.

No matter your age or profession, when starting a business there are surely questions that remain unanswered during the formation process. Here are a few guidelines to follow to provide assistance along the way.

Related: Incorporate Your Business Through StartupNation

Carefully select a name for your business

The name of your business is one of the most important aspects of getting started and will be tied to all of your branding and marketing. A good business name is needed before moving forward with any official legal documentation that requires name, address and phone number related to your business. When selecting a name, think about what words accurately describe your brand and services. Are they terms that you want to be associated with? Your business name is closely tied to the reputation of your organization, so it is important to be mindful of the name you select.

Related: Incorporating a Business: Where, When and How

Work with an industry professional to guide you

Where do you get started when forming a business? During the formation process, it is important to research and look for industry professionals who will be able to provide you with assistance.

One important industry professional to work with is a registered agent. Your registered agent provides assistance with obtaining legal documents for your corporation. In fact, most states require a registered agent. Delaware, a popular state for business formation, requires corporations to have a registered agent. According to the State of Delaware website:

“Delaware law requires every corporation to have and maintain a registered agent in the state who may be either an individual resident, a domestic corporation or a foreign corporation authorized to transact business in Delaware whose business office is identical with the corporation’s registered office.”

Have adequate finances to start a business 

The financial aspect of forming a business is important to get the company started. You may need money for a variety of things, including, but not limited to:

  • Administrative startup expenses
  • Office/retail space (if applicable)
  • Technology and office equipment
  • Resources
  • Staff (if applicable)
  • Utilities

Do you have enough money to rent a space for prospects and customers to visit you and purchase your goods or services? Are you hiring employees, and is there a structure for how they will be paid? These are all items that should be considered when forming a business. It is a large financial investment and takes financial planning for success. If you already have money set aside for your entity, it is important to budget your finances and have a plan for how they will be allocated. If you do not have the finances in place to form a business, it is important to decide if you will borrow money from a friend or family member, or if you will secure funding through loans, grants or other programs. Having a strong financial system in place will help to build a solid foundation for your company today and in the future.

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Office space location

Today’s business environment is much more flexible than in previous years and there are a variety of options for working out of your home or apartment, or working in a co-working space. However, depending on the size of your business and the goals for company growth, it is important to consider the possibility of acquiring an office space. This area will provide an environment for employees to work and will also be the space where client meetings or transactions can take place depending upon the nature of your business.

If you choose to acquire an office, retail or work space, have you decided where this will be? Will it be in the city, the suburbs, etc., and will you rent a small space, occupy the whole building or invest in purchasing a space? These are all items that should be considered when forming a business so you are able to secure a space to operate your company.

By following these guidelines you will be on the path to success in no time.

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