So you have a big dream and lots of energy to get started running your own business. That’s exciting! In the U.K. alone, the registration organization Companies House has seen a 35% increase in company directors aged 16-24 since 2014. It’s a great time for young people to become entrepreneurs!
If you’re ready to make your mark on the world of business, keep in mind the Who, What, Where, When, and How of getting started by reading below.
1. What are you?
There are three types of business structures. You’ll need to learn about each one and select the best option before you can start to think about getting your enterprise off the ground. Here’s a quick rundown of each type, but make sure you do your research before choosing one.If you’re ready to make your mark on the world of business, keep in mind the Who, What, Where, When, and How of getting started by reading below.
- Sole trader
This is 100% you. You are the business; the business is you. It’s easier to start up, shut down, you get 100% of the profits, and you make your own decisions. On the other hand…you make your own decisions and you are solely responsible for any money lost.
Instead of going it alone, you have partners who all invest a certain amount, and in return are given their fair share of the profits. Partnerships are less work and responsibility for you, but they also mean fewer profits for you to keep.
- Limited Liability Company
This option separates you from your company; it is its own being. Whoever owns the shares controls the company, whether that’s you or any number of shareholders. This is the most tax-efficient and reliable structure with the least amount of risk for you personally, but it requires more outside help like lawyers and accountants.
2. Who are You?
While it might be tempting to pick the first name that comes to mind, consider this: who are your potential customers? What do you want your business name to say about you? If you want to be taken seriously, then you’ll need to put some thought into your business name.
Do an internet search for the names you are considering to make sure your first choice isn’t already taken. Don’t be purposely offensive just for shock value. Avoid using punctuation and symbols—those make it harder for customers to find you.
Once you have your name, brainstorm some images and logos. There are any number of free websites out there that will help you create the perfect logo for your company. Remember to consider colors, readability, and recognizability when creating your company logo.
3. Where Are You Going? How Are You Getting There?
You need a business plan before you start building your enterprise. There are free business plan templates online you can use to get started. The main points you’ll need to consider are:
- A summary of your enterprise (what’s your company all about?)
- The products and/or services you plan to provide
- Your marketing plan
- Milestones you plan to meet
- Company finances
That last is important. How are you going to fund your start-up? In addition to the known expenses, you will need to make sure you have an emergency fund for the inevitable unforeseen expenses. Where will that money come from? Know the answer to this before you get started so you won’t be caught in the rain without an umbrella.
4. The Fine Print
For most of you, the least fun part of starting your business will be all the legal paperwork you’ll have to take care of. It’s not nearly as exciting as creating a logo or writing about your products and services, but if you want to be a professional then you must dot your i’s and cross your t’s. It’s a fact of life for everyone in business, and until you can afford to delegate, this is all on you.
Do you need a license? Depending on what products or services you are selling, you might. When you search for this answer make sure you include the specific laws of the country (and, if in the U.S., the state or county) in which you plan to do business. In addition to legal reasons, being licensed lets customers know you are 100% professional and serious about your work.
Do you need to be insured? And if so, what type of insurance? How much will it cost you, and what does it cover? Again, be specific when searching this online; the law in one state or county may not be the same as the law in another.
Invest in a trademark or copyright. Like insurance, this is for your own protection. Intellectual property law will cover this, including names, designs, products, etc.
Yeah, all of this can be a pain, but once you become successful and have to deal with all the usual ups and downs of owning your own business you’ll be glad to have all of this coverage in your corner.
Try not to let the details get you down. If you are pursuing your passion, then that will guide you along the way. Once you have a plan and the legalities in place, that fiery passion will help you work your way to the top!
The Kantner Foundation is proud to offer college scholarships to Florida’s high school entrepreneurs. To learn more about our program, and to start your application, click here.