Question: I am thinking about starting a business but don’t know what steps I should take. Can you give me some direction in this regard?
Answer: Whether your business is located in Collier County or elsewhere, the first thing you should do is construct a written business plan. I see too many entrepreneurs that invest a lot of money with start-up expenses, before doing the necessary due diligence.
A well-constructed business plan will address all of the necessary steps you must take in the formation of a new business including:
- Select a Legal Structure – Form a S-Corporation or a Limited Liability Company if yours is a sole proprietorship or one with just a few partners. Visit https://dos.myflorida.com/sunbiz/start-business/
- Register a Fictitious Name - A Fictitious Business Name (FBN) is the legal term for an assumed name which a business uses instead of the name of the owner, also known as a DBA (short for "doing business as). The use of a registered Fictitious Business Name allows individuals or businesses to use trade names without having to go to the expense of creating a separate legal entity.
- State and local Licensing – Depending on the type of business you are operating, it may require either of both. See www.myflorida.com/dbpr and https://www.businesslicenses.com/Licenses/FL/Collier/
- Apply for a Federal Employer Identification Number (EIN) – Required unless you are operating as a sole proprietor (individual). Visit www.irs.gov
- Register to pay Federal, State, and Local Taxes – These may include a Federal Employment Tax at www.irs.gov, Florida Sales & Use Tax at https://floridarevenue.com/Pages/info_business.aspx, and local (Collier County) Business Tax Receipts and Tangible Personal Property Taxes at https://colliertaxcollector.com/
In addition to the above, you may have to buy or lease building and equipment. Also decide what kind of insurance you will need to cover your property, liability and employees, if any. Then there is the big hurtle of securing adequate financing. Most small businesses fail in the first two years because they have underestimated start-up costs and ongoing monthly expenses incurred before they reach the break-even point. This is the point where income and outgo merge.
All of these issues can be more easily understood if one takes the time to construct a viable business plan. The SCORE website offers a free outline for a start-up business which includes financial templates for determining start-up expenses and a 12-month cash flow projection. These forms can be found at https://tinyurl.com/zfzvje8
You will undoubtedly need to engage the services of an attorney, CPA, and commercial insurance agent to help you understand the complexities of owning and operating a small business. Also, the volunteer counselors at the Naples Chapter of SCORE stand ready to assist you in developing your business plan.
Gray Poehler is a volunteer with the Naples Chapter of SCORE. To learn more about management issues facing your small business, contact SCORE Naples. Counseling is provided FREE of charge to all U.S. citizens and legal aliens. To register call 239-430-0081 or visit our web site http://naples.score.org/mentors A counselor will contact you within 48 hours. Please include your name, email address and a contact phone number.