Becoming an entrepreneur is a viable option for many people in our modern world. A college degree, business experience, and large sums of money may all be helpful, but aren\u2019t strictly necessary for success. However, you will need enthusiasm, a solid plan, and some other tools to get started.<\/p>\n
The first question you should ask yourself is why you would like to start a business. This will help you discover which type of company you should run. If your main goal is extra money, a side gig could work. But if your motivation is complete financial freedom, you\u2019ll need to dedicate more time to this pursuit. As soon as you have defined your reason, you can look into the following steps for achieving your dream.<\/p>\n
For many entrepreneurs, they simply “know” instinctively that starting a business is right for them. “If your gut tells you that it\u2019s what you\u2019re meant to do, that it\u2019s your destiny, then you should consider it, especially if your instincts have served you well in the past,” writes<\/a> Steve Tobak at Entrepreneur.com.<\/p>\n Many people choose to write a plan because it\u2019s required by banks to obtain a loan. While this is a good reason to write one, it\u2019s far from the only benefit. A strong business plan<\/a> will be your roadmap for the future of your company.<\/p>\n There is no strict formula for a successful roadmap because every plan will be unique. But here are some sections you will want to include, regardless of which type of business you start:<\/p>\n Your business plan summary will give potential investors and lenders an idea of your goals with starting the company. Although this section will come first in your plan, it\u2019s typically written last.<\/p>\n Your business overview will define what your business will sell and the value it will offer customers. This is your chance to cover all the relevant details that a review committee will want to see. Make it simple and show that there\u2019s an existing need in the market your business can provide for.<\/p>\n This is where you will cover employee salaries, staffing needs, and operations for day-to-day transactions and activities. You will also cover your experience as the owner here, which is highly relevant for obtaining a loan.<\/p>\n Any potential business owner must develop a strategy for marketing to make sure enough customers exist to support the business, and to figure out how to advertise. Every successful company needs a plan for finding its customers, or a profitable business may not be possible.<\/p>\n Next, you will have to think about the necessary licensing for your Arizona business. Check out some of the categories below to see which of them apply to your situation:<\/p>\n Most counties, towns, and cities in the state will require registration for a business, even if it\u2019s home-based. These business activity rules will vary according to each local entity. This means that some locations will call for a license, and others will have specific rules for signage, liquor licenses, construction or building changes, zoning, and more.<\/p>\n Arizona may require that you register for a transaction privilege tax (TPT), which taxes a business based on its sales. Also called a vendor, wholesale, or sales tax license, the TPT applies to construction contracting, motels, property rental services, restaurants, retail, and more. The state Department of Revenue<\/a> determines tax rates based on the physical location of the business.<\/p>\n Some professionals in Arizona will be subject to regulation including those who sell tobacco or alcohol, pest control services, daycare services, adult care, message therapy, construction contracting, and more. Find out whether your business will be subject to this regulation on Arizona Business One Stop<\/a>.<\/p>\n Market research is how you will determine why people will want your service or product. It will look at consumer patterns, behavior, and factors that influence behavior (including personal, societal, and cultural conditions). This section is often split into two categories: primary and secondary research. For your business plan, you can focus on both, or just one:<\/p>\n Market research is essential to the long-term success of your business, and is one of the first ways you can ensure – or at least predict – the viability of your business idea. “You may have all the aspirations and ideas in the world,” says Cozzi Recycling<\/a> Director Albert Cozzi, “but until you put together the necessary market research and demographic studies, you won’t actually know your business landscape as intimately and realistically as you need to.”<\/p>\n Whether you decide to focus more on primary research, secondary research, or both, you will want to answer some basic questions when gathering market information.<\/p>\n Who will be buying your product or service? <\/strong>Describe your customers in regards to occupation, age range, income, education level, lifestyle, and any other potentially relevant factors.<\/p>\n What is their motivation for buying? <\/strong>Answers to this question will vary widely depending on your specific service or product and what it\u2019s used for. Try to place yourself in your customers\u2019 shoes to figure out why they buy what they buy, whether it\u2019s saving money, finding a product that will last, or making their lives easier.<\/p>\n What are they currently buying? <\/strong>In answering this question, you\u2019ll be describing the buying habits of your customers in terms of your service or product. You will also cover popular features of the product, general price points, how much they purchase, and from which suppliers.<\/p>\n Every successful future business owner should conduct due diligence<\/a> for their industry. Check out comparable business by finding those that serve the same area or location as you. Look for businesses that are somewhat new, are of relative size and that have an ownership structure as close to yours as possible. For example, if you have two people running your company, try to find businesses that mirror that instead of single-ownership entities.<\/p>\n This information will help you get a realistic idea of how much demand there is for your product and also how you can adapt to the existing marketplace.<\/p>\n Also called the business structure, selecting your business entity is legally required in the state of Arizona. There are four categories that your company can potentially fit into. They are partnership, sole proprietorship, LLC, and corporation. Let\u2019s look a bit closer at each.<\/p>\n A general partnership applies to businesses which have at least two people running the company together. There isn\u2019t any formal filing required for this category, and partnerships have unlimited liability. This means that in the event of the partnership being sued, there are consequences for both (or all) partners.<\/p>\n The entity itself won\u2019t be subject to business income tax. Instead, losses and profits will be passed onto the business owner\u2019s tax return, where the income will be subjected to self-employment taxes.<\/p>\n This category applies to individual entrepreneurs who wish to start a business on their own. The least expensive and simplest to set up, with a sole proprietorship, the business owner is the overseer of all actions and debts in their business.<\/p>\n Although it is the easiest entity to start, it comes with the downside of unlimited liability. If someone sues the business, the personal assets of the owner are put at risk. Business profits will be subject to self-employment tax, which may be higher than other categories.<\/p>\n This is a popular choice for business entities as it offers liability protection. It doesn\u2019t have burdens such as taking minutes, conducting shareholders\u2019 meetings, or holding board of directors\u2019 meetings. It also comes with greater tax flexibility than the other three entities available.<\/p>\n This legal entity is considered separate from the business owner. Although it\u2019s a more complicated and expensive path than a partnership or sole proprietorship, it also shields the owner\u2019s assets in the event of a lawsuit. Corporations also have the benefit of choosing how to be taxed. Since income will come to the business owner or owners through dividends or salary, corporations are not subject to self-employment taxes.<\/p>\n Of every decision you\u2019ll need to make in starting your business, the legal structure you choose is one of the most crucial. This will affect the amount you\u2019re taxed, how much paperwork will be required of you, and your business funding. When in doubt, don\u2019t be afraid to consult a professional. There is much more to starting a business, but the information in this article is a good place to start.<\/p>\n If you’re considering starting a business, know that there are risks involved, but there are also great rewards. “I used to find it hard to picture myself getting old and becoming like my boss and wondering at the age of 60 if I should have given it a shot when I was 30,” says<\/a> entrepreneur\u00a0Prashant Singh. If you’re in the same boat, the regret of missing your opportunity may far outweigh the regret of a business chance that didn’t work out the way you imagined.<\/p>\nWrite a Business Plan<\/h2>\n
Executive Summary<\/h3>\n
Overview<\/h3>\n
Employees and Management<\/h3>\n
Marketing Strategy<\/h3>\n
Look into Licensing in Arizona<\/h2>\n
Local Licenses for Business<\/h3>\n
The State Transaction Privilege Tax<\/h3>\n
Occupational and Professional Licensing<\/h3>\n
Conduct Market Research<\/h2>\n
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Market Research Questions<\/h2>\n
Look at Similar Businesses<\/h2>\n
Choose a Business Entity<\/h2>\n
Partnerships<\/h3>\n
Sole Proprietorships<\/h3>\n
LLC or Limited Liability Companies<\/h3>\n
Corporations<\/h3>\n