Starting your own business can be an exciting but daunting endeavor. Before getting started, it is important to make sure that you are personally and financially prepared, and that you understand the logistics of the project. Successful entrepreneurs are leaders who work well with others. They are decisive yet are willing to consult others for advice and assistance. They thrive with competition, work well under pressure, and are driven and self-disciplined. If these are some of your personal qualities, you are off to a good start. Prospective business owners, additionally, should be prepared to work long hours, dip into personal savings and perhaps accept a lower standard of living until the business successfully takes off. To be prepared for business-ownership, it is a good idea to take an entrepreneurship course, and to have experience in managerial positions. Starting a business is a long process, and having adequate social and financial support around you is key for successful preparation. Here are some of the first, crucial steps to take when staring a business in Massachusetts.
Counseling and Assistance for Business Start-Ups in Massachusetts
Throughout the state of Massachusetts, there are several resources for free or low-cost counseling sessions, workshops and training courses for your small business planning. The Massachusetts Small Business Development Center (MSBDC), for example, offers services at locations all over the state and appointments for advising can be made online. The Massachusetts Office of Business Development also offers counseling services through Regional Economic Development Organizations. Additionally, SCORE, a national non-profit organization supported by the U.S. Small Business Administration, has several offices in Massachusetts. They provide confidential one-on-one business counseling in person and via email and video call and offer workshops and webinars for small business start-ups.
Developing a Business Plan in Massachusetts
The first step in starting a business is to do your research and develop a business plan. This document is a three to five-year projection model for your company. The most important section of the business plan is the Executive Summary, which will describe your commercial mission and how you fit into the existing market. For new businesses, the Executive Summary will be a snapshot of your plans for potential investors. Your business plan should also include a more detailed description of your company, a thorough market analysis within the region your business plans to operate, definitions for the organizational structure of your business, details about your products or services, strategies for marketing and sales, funding requests, financial projections and an appendix of relevant documents.
Choosing a Location for Your New Business in Massachusetts
The location you choose for your business will depend a lot upon your needs for the space. Aside from physical necessities (if you require a commercial kitchen, for example), it is also important to consider whether the location fits your company’s brand, whether there are nearby competitors, and if the neighborhood is safe and hosts prospective customers and employees. You then must consider local zoning laws and tax requirements.
Financing Your New Business in Massachusetts
Acquiring start-up costs can be one of the most difficult steps in starting a business. Other than your own savings, these will usually come from loans or, in some cases, grants. For small business loans, it is important to prove to the lender, whether it be a bank or private financier, that there is a viable market for your product or service, that you have sufficient managerial experience to run the business, and that there will be high enough profit margins to repay the loan. Lenders may also ask about equity and collateral. In addition to loans, your business may qualify for grants. Most government-issued grants in Massachusetts are reserved for registered non-profit organizations, except for the Small Business Innovative Research Grant and the Workforce Training Grant. The former is provided to companies working with innovative technology of interest to government investment, and the latter provides funds for employee training. Other grants may be available through private agencies.
Choosing a Structure for Your Massachusetts Business
The way you choose to structure your business will affect your commercial taxes and legal identity. A sole proprietorship is the most common structure for small businesses and means that you are the only owner and are responsible for all liabilities and assets. A corporation, on the other hand is more complex and is owned by shareholders who are only individually liable for their share in the business’s stock. Partnerships allow more than one person to own the business and divide the profits, losses and responsibilities. Limited liability companies combine the low individual liability of a corporation with the tax efficiency of a partnership.
Registering Your Business in Massachusetts
Once you have gone through these initial considerations and processes for starting your business, you must register your business on local, state and federal levels. Local registration for a doing business as (DBA) certificate can be completed at your local county clerk’s office. Most businesses will need to register for a federal tax Employer Identification Number, which can be applied for online. Finally, Massachusetts state registration of your business can be done online with the Secretary of the Commonwealth. Annual updates of relevant documents are usually required.
Legalities of Starting Your Business in Massachusetts
As you begin your business operations, it is imperative to pay attention to local, state, and federal regulations. Make sure you have acquired any licenses or permits you may need, which vary by business type. The Massachusetts Office of Housing and Economic Development offers online resources to aid you in this process. Finally, never forget to consider the tax implications for your new business. It is often advisable to hire an accountant and an attorney to help manage the legal side of your operations.