It's summer (unofficially, anyway), and maybe you have been thinking about starting a business. Summer is a great time to start a business!
You don't have as many distractions, your energy level and creativity are high, and you have time to get it up and running before fall. My focus for this summer will be on providing you with information on business startup subjects and keep you motivated along the way. To help you, I will:
- Lead you through the legal, tax, and regulatory issues involved in starting a business-
- Take you through the steps in order
- Give you information on business financing
- Look at specific categories of businesses (retail, manufacturing, service, professional, and others) and how these types of business are started
In addition, I will be reporting on the progress of a young couple named Mario and Eleanora (not their real names) who have decided to start a professional practice. Each week, we'll catch up with them and see what questions they have and how they are doing. You will have an opportunity to comment and ask your own questions through the Forum.
Finally, I will have some special features and guest experts talking about business startup subjects - attorneys, accountants, bankers, business owners, and others - to provide even more expertise to help you get started.
First question: How long does it take to start a business?
It depends on the type of business, the complexity of the business, and the type of location. To start a home business with no employees, no bank loan, and no manufacturing, you could probably get started in a month or two. At the other end of the spectrum, a business that manufactures products in a large facility, with lots of employees might take nine months or a year to get started. In general, though, if you can find a location that doesn't need too much renovation, you can start a retail or service business in less than six months. Buying an existing business may take a little less time, but not much.
What takes the most time in starting a business?
Two tasks take the most time:
- Finding a location for your business and getting it ready. First you must decide on a general area (city or town), then look around to see what is available, then negotiating for the lease or purchase of the building, and then renovating the building to suit your needs. Of course, this assumes that you don't have to build from scratch, which can take many months.
- Obtaining a bank loan. To get a bank loan, you must prepare a business plan which includes detailed financial statements, your marketing plan, and information about your management and operations. Putting together a business plan takes time. For example, you will have to figure out what to buy, how much it will cost, and where to get it. You must prepare income statements and other financial information. Then, you must take the plan from bank to bank to find one that will give you a loan, with or without an SBA guarantee.
If you get lucky and find a great location that doesn't need much work, and if the first bank gives you a loan, you can be up and running quickly. But it usually doesn't happen that way. One Rule of Thumb to remember about the business startup process:
Everything takes twice as long and costs twice as much as you think it will.
And that's a guarantee.
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