Requirements for Starting Up a New Small Business

There are many requirements for starting a new business.business image by Magalice from Fotolia.com

People or groups of individuals start businesses every day. A person can start a business as a sole proprietor, partnership or corporation, including a limited liability corporation, or LLC. There are advantages to all of these types of businesses. Sole proprietors have more flexibility in decision making, but partnerships and corporations typically have more start-up capital. No matter what type of business you want to run, there are a number of requirements to fulfill first.

Business knowledge

Whether you are starting a small retail store or hope to build a major corporation, you still need some basic business knowledge before launching your business. Some people may have business degrees or know a great deal about the operation of a certain business. However, anyone who wants to start a business needs to study their competition, learn about their industry and possibly take some courses in marketing, finance and accounting.

Anyone who starts a business needs a vendor's license. (See resource 2.) You can get a vendor's license through your local county administration office. At the same time, you will register your name or business name, which is called a DBA (doing business as). A vendor's license allows you to collect and report sales taxes for customers in your state. You also may need other licenses, depending on the type of business that you run.

All businesses need start-up capital, or cash. Some people tap their savings or 401K accounts to start a business. Others apply for loans through their bank. Whatever the case, it takes money to buy computers and equipment, advertise your business or hire employees or contractors. People who start corporations can offer preferred or common stock to investors to raise capital for their business.

Most people who start businesses need computers, printers, fax machines, paper, desks, file cabinets, office supplies and shelving units. You also will need various software packages for your computer as well as e-mail capabilities. If you plan to hiring employees, you will need to set up a network for your computers and phone system. People who operate retail stores will need cash registers, safes, fire extinguishers and wholesale suppliers from which to order their merchandise. (See reference 3.)

An important requirement for starting a business is a business plan. A business plan should include details about your business, such as the market share of key competitors, your projected market share, marketing and advertising strategies you plan to implement and even sales and profit forecasts, according to the article "Business Plans" at entrepreneur.com. If you are trying to borrow money from your bank, a business plan will increase your chances of getting a loan. (See reference 1.)

Some businesses start out as lone-wolf ventures but quickly grow beyond what one person can handle. Consequently, these business owners must hire employees to absorb some of the workload or deal with customers. Your employees will need to be properly trained before they can become self-sufficient contributors to your organization.

Most successful businesses have websites, which provide another way to communicate company and product information to potential customers. If you advertise online or plan to run an e-mail campaign, you also will need to develop a contact page for your website. The contact page will redirect inquirers to your main website and protect you from possible spamming, which is the illegal use of sending solicited information to people online.