Steps for Opening a Business

There are more than 27 million small businesses in America, according to the Small Business Administration, and they provide more than 65 percent of all new jobs. Hundreds of thousands more start up each year, but half of them shut their doors before five years are up. Becoming a success story takes planning, money, research into laws and licensing and a great deal of paperwork. You'll be working hard long before you finally open your doors, but that hard work could turn your dream of business success into a reality.

• 1

  Write a business plan. A good plan spells out your goals for your business, your financial projections for the first year or two, your strategy for beating the competition, your assets -- management experience, a unique product -- and a projection for when you expect to break even. You'll need a business plan to show investors and lenders, the Small Business Administration states, but it will also help you, your partners and your employees to stay focused and give you a standard to measure your business performance.

• 2

  Select the right legal structure for your business. Incorporating requires more paperwork, expenses and fees than working as an independent contractor or sole proprietor, but offers greater legal protection and could reduce your personal losses if the business doesn't succeed.

• 3

  Hunt for funding if your own pockets aren't deep enough to launch the business. You can choose to use debt financing: taking out a loan, equity financing -- where you give investors an ownership stake -- or a combination of both. Be careful not to make promises you can't deliver on, particularly with friends or family. If they invest in your company thinking they'll get their investment back in six months and you're thinking six years, they won't be happy.

• 4

  Choose a business name. If you're going to incorporate, search your state's online database for existing names, find one you like that hasn't been taken and register with the state. If you're a sole proprietorship, you can operate under your own name, or register a fictitious name with your county government.

• 5

  Pick a location for your place of business. Your business needs to be compatible with the local zoning code; even if you're planning to work out of your home at first, local laws or homeowners association rules may forbid that. If you're opening an office or store, you'll want one that's easy for customers to find and drive to.

• 6

  Obtain all the licenses and permits you'll need. You'll need a business license from your local government and, depending on your profession, possibly state licenses or professional certification. If you're building or remodeling your place of business, you'll also have to take out permits for the work.