Thinking of starting a company? Here are 5 things to consider
More and more people are choosing to become entrepreneurs and forge their own path in the pandemic. In fact, one million more new business applications were filed in 2021 than in 2020 – the highest total ever – according to the US Census Bureau.
If you’re ready to take the plunge into small business ownership, having a plan, understanding your credit health, and building a solid foundation can set you up for success — and help you maintain and grow what you’re working towards. build today.
“The first days of building a business are exciting and also come with a lot of questions. I love helping people understand the roadmap and take some of the guesswork out of the early stages,” said Kristina Sicard, senior business consultant for Chase.
To help you get started, here are some tips for those first steps:
Put it on paper. Every new business should start with a business plan. Even though you’re starting with the basics, this document is a blueprint for how to build and maintain your business, which is useful to have on hand once you start getting down to business. get your business off the ground. This 5-step checklist can help you take important steps before you open.
Build and protect your credit. Knowing your credit score and how it works is an essential part of your overall financial goals.
“When you’re starting your business, it’s important to realize that your personal credit score will be the key to helping you get some initial capital, like a small business credit card. Keeping it strong can help you maintain your personal financial health AND that of your business,” said Darla Harris, Senior Business Consultant at Chase. “As your business grows, the financial health of your business will allow you to access other capital and financing, but your personal and business credit information could be considered part of the mix when creditors assess your needs.”
A word of advice: to create credit in your business name, set up a small business credit card account, pay vendors and suppliers on time, and pay attention to cash flow and liquidity, among other things.
Separate personal and business accounts. Many business owners start their businesses with their own money, but it’s very important to practice the habit of separating personal and business finances. Opening a small business checking account or opening a business credit card can help you track your expenses and will also help you build your business credit profile, simplify your bookkeeping and save you money. help when filing your tax return.
Think about expenses. Startup costs can vary and it’s easy to get lost in the numbers. Having a clear idea of how much money you will need to get started is essential to avoid cash flow problems until your business starts turning a profit. You may need to hire staff, purchase equipment, or obtain an office or warehouse to run your business. There are many ways to finance your start-up or small business, including a business loan, credit card, line of credit, equipment financing, and small business grants. Determining the best financing option depends on your credit, how quickly you need the money, and the long-term effects it may have on your business. First speak with a banker. They are there to guide you.
Ask for help. When you’re ready to start or grow your business, consider having conversations with your local SBA Small Business Development Center (SBDC) who provide free tools, guidance and training to entrepreneurs. Look for licensed experts in banking, legal, and tax who can help you build your business infrastructure as it launches. Chase offers free workshops – virtual and in-person.
Bonus Tip: The United States Small Business Administration (SBA) offers information on the process of registering your business name with state and local governments. There are liability protections, contract opportunities, as well as legal and tax benefits you can miss by not registering your business. For example, as your business grows, you can apply to become a supplier to larger companies.
If you’re ready to start a discussion about money, schedule a meeting with a Chase investment banker or senior business consultant.
Here are some tips for the conversation: Discuss your business plan, seek advice on how to manage expenses and access capital, and learn about available resources and support.
For more tips and information on how to make the most of every business and financial opportunity, visit a Chase branch near you.
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