How to Start a Small Business

Starting a startup is undoubtedly a wise choice for career or economic growth, but it is also more challenging. Let’s explore how you can start a small business.

Starting a Business

Are you a non-resident who wants to run a small business? Are you passionate about pursuing your business idea or hoping to turn your home-based business into a profitable venture? 

Starting a small business is undoubtedly a wise idea. Starting a small business as a non-resident can present some additional challenges. But with careful planning, startup strategy, and execution, it is undoubtedly achievable.Our guide offers valuable insights on transforming your ideas into a thriving business. Here’s a startup strategy just for you about how to start a small business:

What Is a Small Business Start-up?

Before starting the journey, you should learn about starting small businesses. Imagine you have a fantastic idea for a business; It could be anything, like selling handmade crafts, offering delicious cupcakes, providing pet grooming services, or even creating cool mobile apps. And then, when you decide to turn your idea into a real business, it’s addressed as a “small business start-up.”

A “small business start-up” is that exciting moment when you turn your idea into a real business. Mainly, a small business start-up is when someone like you takes a creative idea and turns it into a brand-new business venture. It’s similar to planting and nurturing a seed with hard work and dedication to grow into a graciously fruitful tree.

Gather Your Small Business Ideas

There are a lot of positive aspects to taking the entrepreneurial route instead of working for someone else to earn a salary. But first, you should pick a business idea compatible with your talents, interests, and the demands of your target market. 

Every great business begins with a spark of inspiration from great ideas. Today’s most successful business leaders, like Elon Musk and Jeff Bezos, have one thing in common: They have an unrelenting passion for their ideas. To launch a successful small business as a start-up, you must have a deep passion for your chosen business idea.

The best small business ideas you can have are online-based or work-from-home businesses. These can be done on your home computer. This will automatically reduce travel and maintenance costs and give you more flexibility in your personal and professional lives.

If you’re not passionate about your small business, you may struggle to launch it and overcome obstacles. So, let your imagination flow like a river and think of what you love doing or what people might need. Write down all your ideas on a notepad, even the wild ones!

Perform Market Research Regarding Idea

When you have business ideas, you can’t just begin a business. Market research can help you manage risks because it gives you an understanding of the demand for your goods or services and the level of industry rivalry. It also provides helpful information about your target audience’s location and demographic characteristics.

You usually have two options when performing research:

• reviewing already published information or 
• creating your own analysis.

While already gathered data can save you time and money, it might not be up to date-or customized to your target audience. In this case, you can conduct research from scratch through one-on-one interviews and surveys. This lets you speak with customers directly through focus groups.

Create And Develop Business Planning

Once you have done your market research regarding your business idea, it’s time to create strategic planning based on your goals and the ways you expect to gain success. Your business plan serves as its foundation. A business plan is like a roadmap demonstrating how to form, grow, and operate your new company. Eventually, if you need a loan or funding, investors or Financial lenders will want to check your business plan for stability and security. 

There are usually two types of plans;

1. Traditional Plans: A business plan is a comprehensive document outlining the business strategy, operations, and financial projections. It is typically more detailed and extensive, making it suitable for established businesses or startups seeking significant funding or investment.Usually, traditional business plans are used for formal reasons, like raising funds from investors or introducing the business to probable partners or stakeholders. Critical components of traditional business plans include an executive summary, company description, market analysis, products/services, marketing and sales strategies, organizational structure, funding requests (if applicable), financial projections, and appendices.
2. Lean Plans: A lean plan is a shorter and simpler version of a typical business plan emphasizing the business’s essential elements while excluding extraneous information. Lean plans are particularly suitable for small businesses and startups that want a simple and flexible document to guide their operations and communicate their strategy. They include essential information such as the business idea, target market, value proposition, revenue streams, key activities, and basic financial projections.However, a lean plan can be more suitable if you need a quick and lively document for internal use or to communicate with team members. Some businesses even use a combination of both, starting with a lean plan and expanding it into a traditional plan as they grow and require more formal documentation.

Resource Your Business Funding

A quality business plan gives you an idea of the funds you need to start a business. Once you’ve created and developed the plan for your venture, you’ll need money. Every firm has initial expenditures, which are often covered by outside capital. The following are the most frequent small business finance strategies:

• Bank Loans for Small Businesses
• Grants for Small Businesses
• Friends and family loans
• Personal funds (start-up)

Ensure you have a financial strategy before asking for outside money. This financial plan should include an estimate of when your company will become profitable and the size of your initial costs. A more official report may be required if you are attempting to obtain a loan from a financial institution.

Pick Your Business Location

Choosing a business location is crucial for starting a small business as a non-resident. After completing your business plan and obtaining the necessary financing, it is essential to select a location that is easily accessible for your intended customers. Additionally, it is advisable to assess the potential for future growth and expansion in the chosen area. Choosing a location with room for growth can save you the trouble of relocating later.

You must consider the ease of access to the location as a non-resident and your potential customers, suppliers, and partners. Good transportation links and connectivity are essential. Whether you’re starting a physical or online store, your decisions might impact your taxes, legal obligations, and earnings. We suggest you talk to any professional business expert to choose the right place for starting your business out of your home.

In the digital age, even small businesses can operate online. Consider whether a physical location is necessary or if you can start with an online business model.

Choose the Business Structure

After deciding your business location, it’s time to choose a business structure that fits your mission. Choosing a business structure is like choosing a car. You need to consider the size of your business, the cargo you need to carry, and the terrain you’ll be driving on. It impacts your business’s liability, taxes, and administrative requirements. This will determine the type of documents that you need to file.

Standard options for non-resident entrepreneurs include:

Sole Proprietorship:

This structure is the most basic and frequently used, but it comes with the risk of personal liability for the business’s debts and responsibilities. Forming a sole proprietorship is easy because the business doesn’t require filing federal or state forms like other business types, such as LLCs and corporations.

Establishing and operating this business structure is also easy and inexpensive for non-residents. Another reason to do business in Texas is that the innovation ecosystem moves entrepreneurs from the concept stage to the seed stage and then to the growth stage. Doesn’t that sound good?

C-Corporation:

A C corp might be more appealing if your small business has ambitions for significant growth and needs to attract outside investment.

From the tax standpoint of the IRS, a C-corporation is an independent entity. Because it provides you protection from personal liability. You or your shareholders are not personally responsible for the debts and obligations of the company. However, it provides limited liability but involves more complex tax requirements.

By forming a C-corporation, you can issue unlimited shares to an unlimited number of people. Due to the ability to issue unlimited shares, you can raise outside capital from investors and venture capitalists. This is not possible for other business entities. 

Limited Liability Company (LLC): 

Though a C-corporation is a popular choice for starting a small business for non-residents, a limited liability company is another business structure with fewer restrictions. Because you don’t have to keep strict records like Corporations, this offers personal liability protection and is a popular choice for small businesses. 

If you incorporate your small business as a limited liability company, the business’s income and spending will be reported on the owner’s tax returns. Also, there are opportunities to have many LLC owners if you wish to. Your company can be taxed as a partnership or a corporation. You will get the best combination of maintaining the status of corporations and the taxation flexibility of sole proprietorships or partnerships in one business entity.

Partnership: 

You may consider a “General or Limited Partnership” if you have a business partner to start a small business. This can be formed relatively quickly and inexpensively. Non-resident partners may be subject to double taxation, meaning they must pay taxes on their share of the business profits in their home country and the United States.

Lastly, each business structure has its own superpowers. Before making a decision, it’s crucial to consult with a legal and tax professional who can assess your unique circumstances and provide personalized advice based on current regulations and tax laws.

Select a Name for Your Business

Whenever you decide on which business structure you will start, it’s time to select a name for your business. The name of your business isn’t just a title; it’s your legacy! You can use your personal name for this. Unless you don’t want to use your personal name or legal name but instead use a different name, you need to apply for a DBA name. (Please make an interlink of the previous content on how to apply for DBA Online.)

Registration of a DBA name is required so that the public knows the actual owner of the business they’re buying from or dealing with.

Appoint a Registered Agent

This step is crucial to making your journey more accessible and short. You must appoint a registered agent to start a small business as a corporation or LLC. 

Finding the right registered agent is like picking the right team for a sports game. You want players (features) that work well together to win the match (your financial goals), both now and for the championships (big goals) ahead. They will maintain some key responsibilities for you.

Filing Business Registration With The Government And IRS

After choosing the business structure, the next step is registering your business with the state where you’ll operate. This usually involves submitting formation documents, paying a filing fee, and providing information about the business’s structure and purpose.

Though filing registration with the government and the IRS may vary depending on the business structures and location where you formed. There are a few primary steps you must follow:

File A Business Formation Document With The State

The type of document you need to file will vary depending on the business entity you choose. For example, sole proprietorships do not need to file a business formation document. But if you form corporations and limited liability companies (LLCs), you must do so. Therefore, you need to provide some necessary information, like:

• Business name 
• Details about the ownership and management structure 
• Name of Registered Agent
• Total number and value of shares or stocks, if required

Get Federal And State Tax IDs.

To start a small business in the USA or abroad, you must obtain federal and state tax IDs.

In the case of Federal taxation, you need to get an EIN as a unique federal tax identifier to protect you against identity theft and for tax purposes. Using an EIN saves you from giving your social security number to vendors or lenders. As a non-resident, you will need an EIN to file federal taxes and open a bank account for small businesses in some states. To obtain an EIN, you have three options:

• applying online,
• sending a fax, 
• or mailing your application.

Also, you can get your EIN from home through Business Globalizer within 10-12 working days.

Besides a tax ID number, you usually don’t need to register your business with the federal government unless you apply for tax-exempt status or trademark protection. But if your business sells goods or services in a state other than the one in which it is located or plans to hire employees, you may need to register with that state’s tax agency.

Apply for the Necessary Licenses or Permits

Before starting operations, businesses are typically required by most cities and counties to obtain the necessary business licenses or permits. These could include business licenses, industry-specific permits, or other regulatory approvals. For example, if you are starting a business selling alcohol, you may need to obtain a liquor license from your state. 

The requirements may vary depending on your business type and location, so it’s essential to do research at the federal, state, and local levels.

Depending on your business’s industry, you may be required to obtain a federal license. For instance, industries like agriculture and broadcasting often require one. On the other hand, industries such as health care usually require professional licenses. 

It’s important to note that even if your business does not fall into any of these categories, you may still need some form of permission to conduct business. Freelancers and consultants, for instance, may need to obtain a home occupation permit. This ensures your business operates within the law.

Open a Small Business Bank Account

In this step, give your business a home—a U.S. bank account! Opening a small business checking account can be a valuable resource for managing legal, tax, and daily operational matters. This keeps your finances tidy and separates the business from the personal. The process is straightforward as long as you have completed the necessary registrations and paperwork.

But how do you find a bank that best fits your current requirements and future needs in the face of cross-border financial complexities? Don’t panic. You can open a business account in the US as a non-US citizen if you know how it’s done. Say goodbye to chaos and hello to financial organization.

Choose Your Accounting And Payroll 

Before you operate your business or hire employees, make sure that you keep accounting records and use suitable methods for paying the people or yourself. 

For instance, you have a corporation in Texas where 40 people work. You need to pay them a salary every month. If you don’t keep a proper and efficient payroll system and accounting, you may make mistakes in calculating gross and net pay, taxes, deductions, and compliance with local labor laws. In this case, you may be fined for your mistakes. 

To protect your small business from this situation, you must choose a payroll provider or accounting system for your business needs before starting your business. This will save you time by ensuring compliance with labor laws.

Work With an Accountant

After deciding on the accounting and payroll systems, you must hire or work with a professional accountant. Most non-residents get confused about the tax filing at the beginning of their small businesses. To solve this confusion, you need to work with an account. Also, as mentioned above, working with an expert accountant can help you understand tax compliance and track your expenses.

Create An Online Presence for Business Growth

Once you have devised the plan and have a legal business structure, creating an online presence for your small business takes time. Especially when you are a non-resident and doing small business from home, it’s undoubtedly advantageous to kick off your new business.

• You must first determine the most effective marketing activities by targeting your customers. 
• Once you have identified your marketing strategy, you can establish a digital web presence for your brand identity by setting up a professional website.
• And then create social media profiles and show the world what you’re made of!

Build a Team 

Developing your business takes time after you have completed the setup. So you need to plan how you can save time. You will have difficulty managing your time if you do all your business work yourself. In this case, you can build a strong design, financing, accounting, human resources, and marketing team. A solid, trustworthy team can help your business reach its goal by saving you time.

Start Selling Your Products Or Services

Once you have laid a solid foundation for your business, you can start selling your products or services with your team or alone. You can’t start a business until you test your business ideas and make the first sale of your business.

What Makes Good Small Business Management?

Now, you know how to start a small business. You can’t just stop here. You should maintain effective business management to operate your business. Managing a small business can be satisfying but not easy. It’s the result of your hard work. To make good small business management, you must consider a few critical things, whether you manage your own or have a manager for your corporation:

• Good Communication
• Strategic Planning
• Listening to customers and employees
• Understand your market 
• Expert resource funding
• Efficient team-leading skills 
• Quick decision maker

Some Small Business Tips

Lastly, be sure you are familiar with the tax laws in the state where you register your business.

• Be prepared to provide documentation that proves your non-resident status, such as a passport or visa.
• Be sure to pay any required filing fees.
• Allow plenty of time to complete the filing process.

By following these tips, you can ensure that your business registration process goes smoothly. You should consult with an attorney to get specific advice about the requirements for filing business registrations with the government. Launch your business with a splash! Shout your mission from the rooftops, from social media stunts to local events. The world is waiting to embrace your unique offering.

FAQs

Q: Can I work full-time and run a business at the same time?

A: Yes, many business owners start their businesses as part-time jobs until they make enough money to be sure they can live without their full-time job. 

 

Q: What does it cost to start a business?

A: Starting costs vary substantially based on the type of business you want to start. Some firms require office space, while others demand specialized equipment, and the majority today require a website.  So costs will be different in different scenarios.

 

Q: What is the most profitable business?

A: Online reselling, Dropshipping, Home organizing, Online classes, Auto detailing and repair services, and Real estate are the most profitable small businesses. 

 

Which businesses are addressed as small businesses?

A retail store, an online store, a restaurant, a bakery, a cleaning service, a landscaping service, or a consulting business are all examples of small businesses.

Bottom Line

In summary, starting a non-resident small business in the U.S. is like embarking on an exciting adventure. As a beginner, you may face many difficulties. Therefore, we suggest you consult with a business legal expert. You can work with a business formation agent to start a small business.

Business Globalizer is here to help you. We take the proper and legal steps required to register a company in the USA with the utmost care and dedication. Integrity in your company formation and top-notch customer service are among the qualities that make us the best choice for company formation.

You’ve got this! Stay focused, follow these steps, and remember that every successful business starts somewhere.