What You Need to Know About Owning a Business

Leading a business is a demanding but fulfilling job. You get to see your life dreams come true and help your community along the way. You might have a business idea, but you have to execute the vision correctly. Here’s what you need to know about owning a business.

Starting Your Business

Once you determine your business idea, you must lay the groundwork: the name, structure, and plan. Then you must fill out all the necessary permits, acquire the licenses required by California law, and complete your tax information.

     1. Determine Your Name and Structure

The first details you need to nail down are your business’s name and legal structure. If you’re reading this article, you probably have a few good names in mind, but double-check and make sure they’re not already used. Your business can take several forms:

• Limited liability company (LLC)
• Sole proprietorship
• Corporation
• Partnership

The business structure is important because it will partly determine the taxes and permits you need to account for.

     2. Create a Business Plan

Your business plan is the blueprint to your success. Here are some of the most important features it should include:

• Business overview
• Location(s)
• Marketing and sales strategies
• Financial plan
• Risk analysis

A thorough plan will guide your business to succeed in its early stages and improve your chances of getting sufficient funding through loans and investors.

     3. Register Your Business

Registering your business requires a specific set of forms and fees, so make sure you file all the necessary paperwork. You need to register as an official employer with the IRS and get an employer identification number (EID) in every state. In California, you also must register with the Employment Development Department.

      4. Taxes, Permits, and Funding

California’s taxes are complicated, but thankfully you have reliable resources at your disposal to make sure you don’t miss anything. Aside from the state and federal taxes, a new business must also pay the franchise tax and corporate income tax. Other taxes may apply to your business based on structure.

To find out more about permits and licenses (you might need several), the California Governor’s Office of Business and Development has all the information you need.

Once you have the taxes, permits, and licenses in order, you’re effectively ready to open your doors for business. But to be on the safe side, you should secure some long-term funding. Start by opening a business bank account to separate company bookkeeping from your personal finances.

You should also consider getting a company credit card. If used prudently, it can give your credit score a nice boost, increasing your business’s legitimacy and helping you get future loans.

Fundamentals of Business

Once you have the above details covered, you can now focus on the elements that will make up your business’s day-to-day operations. Start by developing a plan to get people to notice your business.

     1. Marketing

Before you sell anything, you have to develop and execute a marketing plan. Research your market, focus on a target audience, and tailor your marketing plan to appeal directly to their needs and interests.

     2. Finances

You must create a reliable money management system that tracks all the dollars going out and coming in. This financial plan should keep tabs on your business’s expenses, including your location’s utilities, employee payroll, spending on your business credit card, and so on.

     3. Theme

Every successful business has a recognizable theme. Spruce up your business location(s) with signs and other decorations that attract your target audience. Create a functional uniform with a stylish color scheme. Consider adding a mascot or other promotional features.

     4. Production

You have to create your product/service at a consistent pace with unwavering levels of quality. Quality and consistency drive profitability.

     5. Distribution

You might have something that people want, but you have to distribute it to them more quickly than your competitors. Consistent production plus fast distribution equals good customer service.

     6. Research

If and when you establish a loyal customer base and turn steady profits, your job is not finished. You have to adapt to market changes. Do thorough market research on your competitors and trends to develop new ideas or products and stay ahead of the game.

     7. Regulation

You have to make a plan that fits within the government’s regulations. California has a healthy amount of them, so consult the government resources linked above and make sure your business operates legally.

      8. Labor

Your employees are the backbone of your business. Give them a fair wage and treat them with respect and dignity. Be prepared to deal with unions if your business grows big enough. Develop an employee handbook or list of policies, along with a training program for new hires.

COVID-19 Relief

Starting a business in 2022 presents some unique challenges stemming from the COVID-19 pandemic, so California offers generous relief programs for small businesses and self-employed individuals. Here are some of the main features that might apply to your business:

• Emergency access to loans and funding
• Debt forgiveness for operational costs
• Tax credits
• Deferment of existing loans
• Delayed tax payments

This relief will help your business stay afloat if it runs into financial difficulties. It also gives more support and freedom to employees. Your business has to provide the following:

• Two weeks paid leave for quarantined workers.
• Two weeks paid leave for workers who have to care for a sick/quarantined loved one.
• Up to 12 weeks paid leave for employees whose children have to stay home for school due to COVID.

With a solid support system for both businesses and employees, you can focus all your attention on business operations.

Start Your Business With Confidence

If you want to own a business, you have to nail down many details before getting the project off the ground: name, structure, permits, taxes, and funding. Then, you can focus on the fun stuff: developing a marketing plan, controlling finances, producing/selling your product, researching your competition, and hiring/training employees within California’s regulations.

Yes, a business has a lot of moving parts that owners need to keep track of. But nothing ever worth doing is easy. Business ownership will challenge you to become a better leader and a better person every single day. If you have a product and plan you believe in, start with confidence!