In this blog post, we will be talking about the various steps involved in starting a business. We will also take a look at the pros and cons of a sole proprietorship, S-corp., LLC, and C-corps to help you make an informed decision.
If you are looking for more information on how to start a business I recommend reading our other posts such as “How do I Start A Business” or “What’s The Difference Between Sole Proprietorship And LLC?”
There are a variety of factors that play into the decision of how to start a business. When you decide how to start a business, remember that you will have to file for your business licenses and permits, open up a bank account for your company registration in Dubai, choose a type of business entity, select an accounting system, and much more.
The following is a list of some things you need to know about how to start a business:
How to Start A Business – Overview
As mentioned above, there are various steps involved in starting a business. This includes opening up a business bank account, creating contracts with vendors and suppliers, applying for necessary licenses and permits, select the type of entity your want to form and select an accounting software program.
Here is a quick look:
How to Start A Business – Selecting a Type of Business Entity
When you decide how to start a business, one of the first things you need to do is choose what type of business entity will fit your needs. There are 5 types of business entities including sole proprietorship, S-corp., LLC, partnership, and C-corps.
The type of business entity you choose will affect what taxes will be due. Corporations are subject to double taxation (meaning the corporation must pay income taxes on its profits and then also tax must be paid by the shareholders) while sole proprietorships are pass-through tax entities (meaning the income is reported on the owner’s individual tax return and it is taxed as personal income).
As a general rule of thumb, if you plan to hire employees, invest your money back into your company, and start making profits over $35,000; then you should form an LLC or S-corp. If you are looking to attract investors, then you should form a C-corp.
How to Start A Business – Open a Business Bank Account
Once you have decided how to start a business, one of the first things that you will need to do is open up a bank account for your company with an initial deposit. Generally, most banks require you to make an initial deposit of at least $1,000.
How to Start A Business – Obtaining Necessary Licenses & Permits
When starting a business, one of the first things that you will need to do is obtain all of the necessary licenses and permits needed in your area. You can visit your local Small Business Administration office to apply for all of the necessary licenses and permits.
How to Start A Business – Setting Up Books & Records
As you start your business, it will most likely experience periods of growth or decline. Since this may be the case, you need to know how to start a business that includes an information system that can help you keep track of your finances.
How to Start A Business – Select a Business Accounting System
When you start a business, one of the first things that you will need to do is select a type of accounting system. There are three types of accounting systems including cash-basis, accrual basis and modified cash basis. You can click here for more information on the three types of accounting systems.
How to Start A Business – Consider an Employee Stock Option Plan (ESOP)
When you start a business, it may be helpful for you to consider offering an employee stock option plan (ESOP). This is because this type of plan allows business owners to pass their company on to their employees via stock options.
As you can see, there are various steps involved in how to start a business. However, by following all of the necessary steps and using the advice found throughout this article, you should be able to successfully get your business up and running.