Usually, the best business idea for you is the one that focuses on your interests and experiences. For example, if you were going to start a successful restaurant, you would more than likely enjoy cooking and serving people good food, and you’d have some experience in actually running a restaurant. A thorough study of the market in which you plan to operate and an understanding of the growth potential and trends for businesses in your area are necessary steps in selecting your business idea.
A business plan provides a detailed description of your business, helps you define your business, identify your goals, and serves as a roadmap for your business. It can help you avoid unforseen problems, properly allocate resources, and help you make good business decisions. A well-written business plan will include information on how you will market the business, who the owners/managers are and their relevant experience, current and projected income statements, balance sheets, and cash flow statements. The business plan is a critical component of any loan package in the event you want to borrow money to start your business. It communicates to lenders, suppliers, sales personnel, and others about your operations and goals. The Small Business Center will not write your business plan for you, but will help you understand how to write the plan and give you feedback about the plan.
Most new small businesses are capitalized by their owner’s savings and salaries, loans from family and friends and loans using automobiles, homes, or other assets as collateral. Some entrepreneurs use credit cards to finance the early months of start-up but this alternative can be costly and risky. Banks are the traditional source of borrowed funds. Commercial finance companies, venture capital firms, trade credit, cash value of life insurance policies, equipment leasing, and selling stock are additional sources of financing for your venture. The Small Business Administration (SBA) offers a number of financing alternatives, but is most well known for its 7A Guarantee Loan. Another great SBA loan product is the Community Express Loan. Lenders will want to know how you will use the loan; how much you want to borrow; and how you will repay the loan. A well-written business plan with projected financial statements can communicate your ideas and needs to potential lenders and investors.
Careful consideration should be given to accurately calculating your start-up costs because one of the leading causes of business failure is insufficient start-up capital. In calculating your start-up costs, you should consider the cost of purchasing the land and building. If you are intending to lease property to open your business, you need to consider the monthly rent. You should include enough money to cover your salary, operating expenses, and money to repay your loans. Contact the Small Business Center for help in getting started.
The licensing and permits needed by your business will vary depending on the nature of your business idea and where it will be located. You must contact federal, state, and local municipalities to determine what is required specifically for your business. For businesses in Jacksonville and Onslow County, contact the State’s Business License Information Office at 1-800-228-8443. You should also contact the city, the county, and the N.C. Department of Revenue. Contact the Small Business Center for a complete listing. Check with the city and county for questions related to zoning issues. Also, if you will hire employees, incorporate, or form a partnership you will need an Employer Identification Number. A North Carolina State Tax Payer Identification Number is also required if your business involves retail sales. Register your business name with the Onslow County Register of Deeds.
The Small Business Center can provide you with helpful information, computer templates, and worksheets to help you get started. Trade associations can be a good source of information for industry-specific information. You can also check several sources in your library for information on industry standards and averages. Your accountant can also be an excellent source of professional assistance when preparing projected financial statements.
A good way to learn about suppliers is by searching the Internet and researching the information in the Thomas Register, found in the reference section of most libraries. Most manufacturers will be happy to provide you with the name of local distributors of their product. Trade shows are another good way to learn about suppliers.
Your business tax obligations will vary depending on whether you hire employees, how your business is legally organized (sole proprietor, partnership, corporation, S corporation, LLC, etc.), and the nature of the business you conduct. To learn about your specific business tax obligations, contact the Internal Revenue Service to get Publication 334, Tax Guide for Small Business. Contacting an accountant in the start-up phase of your business can help you save time and money and avoid complications of tax pitfalls later.
There is a tremendous amount of misinformation about grants for small businesses. Generally speaking, it is rare for a small business to get a grant for start-up. Some exceptions exist if your business fulfills a need by agencies or departments of the federal government or the Department of Defense. Nonprofit organizations that are organized for charitable purposes often seek grants from charitable foundations. You should seek the advice of an attorney and/or a CPA if you are interested in forming a nonprofit corporation.
The form of business organization you choose will depend on a variety of factors including your financial condition, the type of business you plan to start, the number of employees you will hire, the amount of risk involved, and your tax situation. You can learn more about each form of business ownership—sole proprietorship, partnership, corporation (C, S, and nonprofit), and limited liability company at the North Carolina Secretary of State’s Corporations Division website listed below.