Your Most Common Business Startup Questions Answered - VISTA.Today

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Published: Aug 26th, 2022
Your Most Common Business Startup Questions Answered - VISTA.Today

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Consider Benchmark FCU for your business borrowing needs Benchmark Federal Credit Union is here to help you grow your business dream into a reality, providing commercial lending services, commercial real estate, small business loans and more.
___________________ Rebecca Worthington is the Vice President of Community Relations at Benchmark Federal Credit Union.
The only federal credit union to exclusively serve Chester County, Benchmark FCU has been serving the community for more than 80 years and is known for providing extraordinary service.
Anyone who lives, works, worships or attends school in Chester County, is eligible to join Benchmark Federal Credit Union.
Choosing the right business legal structure, or business entity, is an important part of starting your business.

Your Most Common Business Startup Questions Answered - VISTA.Today

How should you legally structure your company? How much money will it take to start? These are the most common questions we receive when assisting new businesses with business accounts, commercial lending services and small business loans. Let’s dive in. How should I legally structure my company? Choosing the right business legal structure, or business entity, is an important part of starting your business. On a federal level, your business legal structure determines your tax burden. On a state level, it can impact your liability. For example, an LLC (Limited Liability Company) structure can protect your personal assets in the event of a lawsuit. A sole proprietorship is the simplest business structure. It is one person responsible for all business profits and debts. It is the easiest entity to set up and also dissolve. A partnership is owned by two or more people. There are general partnerships, where the business is shared equally, and limited partnerships, where one person has control of the operations. A limited liability company (LLC) shields owners, partners or shareholders from personal liability for business debts unless they acted in a negligent manner that resulted in injury to others. Finally, a corporation is separate from its owners. It can sue, be sued, own and sell property or shares of stock in the company. There are different types. This includes C, S and B corporations, as well as closed and nonprofit corporations. Sole proprietors, partnership owners and S corporation owners all categorize their business as personal income. C corporation income is classified as business income. Be sure to speak to your tax and legal advisors for specifics regarding your personal situation and to learn which legal structure might be best for you. How much money will it take to start my business? The first step is to calculate your startup costs so you can have an idea of how much funding you need. This will also help you to estimate profits. Begin by identifying all of your startup expenses, including: Licenses and permits Professional services (lawyer, accountant, etc.) Market research Office space or a building Insurance Equipment and supplies Technology Software & other subscriptions Communications Utilities Employee salaries Taxes Inventory Website/advertising/marketing/promotional materials Signage Startup costs for different businesses can vary greatly. For example, the cost of starting a single-person, at-home business will be dramatically lower than starting a brick-and-mortar business with 20 employees and a large inventory. Add up all of the potential expenses to get the full picture. Categorize the costs into one-time expenses and ongoing expenses, such as rent, salaries and utilities. You will want at least one year of monthly expenses to get you started, but more is recommended, as it may take time to turn a profit. You may also face some expenses that were not anticipated. What are the biggest challenges I will face when starting a business? Knowing the challenges that you may face in advance can help you better prepare. Here are four common challenges in starting a business. Shortage of capital and cash flow. Failure to adequately plan for expenses and the lack of income can be disastrous for new business owners. If you don’t have enough capital set aside, you can quickly run out of cash. Be sure to adequately plan and set aside enough funds to cover all of your needs while you develop your business. Keep in mind that most businesses don’t make any profit in their first year of business. Lack of demand. Advance market research will help you better understand the market for your product or service. It will also give you a look at the competition and how you will compare. You need to be sure there is a demand for whatever product or service you provide before you start. Financial management. Poor financial planning is one of the main reasons new businesses fail. If your costs outpace your revenue, you are setting yourself up for failure. Be sure to have enough startup capital to keep you afloat as you get your business off the ground. Hiring good employees. The people you hire can often mean the success or failure of your business. Take time to hire the right people for your team. You want people who are highly experienced in your line of business and share similar values. Most importantly, take the time to understand their strengths and weaknesses. Consider Benchmark FCU for your business borrowing needs Benchmark Federal Credit Union is here to help you grow your business dream into a reality, providing commercial lending services, commercial real estate, small business loans and more. Visit https://www.benchmarkfcu.org/commercial-banking/ to learn more. ___________________ Rebecca Worthington is the Vice President of Community Relations at Benchmark Federal Credit Union. The only federal credit union to exclusively serve Chester County, Benchmark FCU has been serving the community for more than 80 years and is known for providing extraordinary service. To learn more about the products and services available at Benchmark FCU, visit our website at BenchmarkFCU.org. Anyone who lives, works, worships or attends school in Chester County, is eligible to join Benchmark Federal Credit Union.
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