Requirements for Starting a New Business - Term Paper Example

Requirements for Starting a New Business Introduction After I retire, I plan to start my own business in my local town. In the world, today, technology has brought by many business opportunities, and we need to take advantage of them. Business is self fulfilling and engaging. It will be a good source of livelihood to my family and me in the future. Further, I will have the opportunity to apply my knowledge and skills, which I have learnt over years. I have seen family and friends operating a number of businesses. It has been a real source of inspiration and motivation. I have always aspired o own a business. Therefore, I will be living my dream. However, a number of requirements are need for one to start a business. A good plan enables an individual to achieve long-term success. The paper describes an approach and the direction that an individual also chooses determine his or her level of success. Preparation of an adequate business plan is the initial stage of starting a new business. In most cases, an individual may have different business ideas. However, at this stage, he is required to choose the ideal idea that he will implement. When a decision is finally made, the appropriate business plan is designed. It helps in laying the foundation of the business (Ligthhelm 131-153). The main aim of a business plan is to determine the marketing roles that are required. This means that all the needs of the sales department must be cleared defined. This will involve both the sales and marketing departments. Further, the business plan must define the kind and role of management that is required in that particular business. Management plays an important role in ensuring the success of the business. It deals with all the required personnel and how resources will be utilized in a different department. Generally, the management is supposed to run the whole business. The business plan must clearly outline the role of the management in the entire business. In addition, the business plan must outline the financial plans of the business. Mainly, this is the capital that is requires to start and run a business. It is expected to cater any purchases, bills and salaries of the employees. An individual is supposed clearly outline the capital needs of the business. To be precise, he is supposed to determine the amounts required to establish the business itself. It may also include other costs and expenses that will be incurred in the first cycle of the business. A concrete business plan makes it easier to define the financial needs of the company. At this stage, an individual is expected o identify the viable sources of capital required to start a business (Gibson and DeSimone, 16). This could be through borrowing from financial institutions, savings but in my case, it will use pension that the federal government will grant me after my retirement. However, one is supposed to have a backup source, as we do not know of what will happen tomorrow. In my case, I would borrow money from friends and relatives if things do not work my way. Further, one is supposed to evaluate his or her borrowing power and the amount of funds he can access if the need arises. Moreover, defining an appropriate business structure is the next step. This can be achieved by evaluating a number of expenses that are incurred by any business. Firstly, one should evaluate tax advantages and disadvantages that might come in the course of business operation in every financial year. The business owner is also required to evaluate any legal requirements that are needed. He or she should register the business with the required authority and be issued with a license of operation (Kuriloff and Hemphill, 12-36). It will make it easier for him to operate at all time. However, this will depend on the powers outlined in the license issued by the governing authorities. In addition, one should consider the portability of the business. That is if one decides to expand and relocate the business to other states and countries, is it possible. The business owner is supposed to select an accounting software that will use in evaluation of the entire budget for the business. Further, it should define the needs and hardware of the business. At this stage, the owner is supposed to prepare a partial budget of the business to determine the amount of capital that is required to keep business alive. It will help reduce instances where unplanned cash is required. The management of the business should ensure that it has the right personnel to take care of all business need s and activities. Having the right software helps to eliminate all these problems (Ellyson 1-6). A procedure for billing should be established at the initial stages of the business. This comes along with the collection procedures as they are intertwined. It enables a business to maximize its cash flows. Further, a procedure to monitor all the costs and expenses also incurred should be established. Control procedures should also be outlined in the business act. Most business owners are advised to set up their main offices as their homes. The reason behind this is that it enables them to reduce tax deductions. However, the business should have viable addresses and telephone lines to facilitate communication with its clients. The business owner should prepare and comply with all permits and licenses. In most cases, state and local authorities issue them to business owners and partners. These are very crucial requirements of the business in the country. Hence, it is important to comply with the requirements to ensure smooth running of the business. The business owner is required to prepare and file for this to the required authorities. The identification number will enable him or her to identify himself as the legal owner of the business. The owner should also provide a payroll system as well as tax filing system when it employs its first workers to run a business. These are legal requirements that a business should comply with in every state. The business owner should comply with all the employment rules and regulations as outlined by the State’s department of labor. Failure to this, he could be liable to hefty fines imposed by the labor department. It could also lead to the high rate of employee turnover. It could be an expensive exercise for the business because it has to train new employees after a short period. Employees should receive suitable compensation for their labor and a healthy working environment. They should also be compensated for any overtime work done. Further, they should also be entitled to other benefits such as health benefits and annual leaves to give them time with their families. In this 21st century, it is difficult to determine how the business world will be. Hence, it is important for every business owner to determine the insurance needs of the business. Natural calamities could occur and affect the business. This includes floods and earthquakes. However, the greatest fear in the business world today for investors and owners is the threat of terrorism. It has hit world largest economies, and the impact has been felt in the whole world. It is important for any business to insure itself so that it can receive compensation if any of these occurs. The business owner should develop robust partnerships with different partners to expand the business. However, all the documentation should be done in the right way. This is important, as it will help eliminate all issues and disputes that may erupt in the future. Reliable and viable partnerships will help expand the business in different locations globally. In conclusion, it is clearly evident that a different of requirements is needed for one to establish any form of business legally. Therefore, it is important to seek the best advice to people who have already established their business in different locations in the world. It will give you first hand information and experience from them. Further, they will be able to tell you all the challenges that the industry poses to newcomers like you. However, an individual should follow and comply with all steps and requirements required by authorities. It is the first step and test for any business to prosper. In addition, before establishing any business, it is important to study the market and identify a gap that is existing at the moment. It will ensure uniqueness and you will face less competition from other competitors. Technology has brought by many opportunities. Hence, we should wake up and utilize them for our own benefit. Works Cited Ellyson, William G. "2011 Guide to Doing Business in Virginia." Virginia Business (2011): 1-18. Print Gibson, F.C and Rebecca DeSimone. “How to Start a Business in New Jersey.” Naperville: Sphinx Piblishers, 2010. Print Kuriloff, Arthur and John M. Hemphill. “How to Start Your Own Business ans Succeed.” New York: Sage Publications, 2000. Print Ligthhelm, Angeline A. "Entreprenuership and Small Business Sustainability." Southern African Business Review (2010): 131-153. Print Read More