Are you thinking of turning your side hustle into a full-time alignment? Be sure to focus on the key considerations associated with the start-up phase of business planning:
(1) Evaluate your Business Idea: Is there a market for your start-up? Who is your ideal client? How and where will you reach them? What is the expense of producing the product or service you wish to provide? Based on that, what is the price goal per item/service that not only allows you to meet your expenses, but turn a profit?
(2) Determine your Business Structure: Sole Proprietor? LLC? S-Corp? Partnership? There are a wide array of options with strategic thoughts behind each. Explore and understand them before you settle on a business structure. And always keep in mind your business can change with you, so make sure it is flexible to meet your growing needs.
(3) Select a Name: There are very specific naming rules in Pennsylvania, and not all guarantee you the sole right to utilize your given name. Make sure you work with a professional so that you not only reserve your business’ name, but protect it from use by others.
(4) Register your Business: Depending on which business structure you choose, you may need to obtain a Federal EIN and an Entity Number from the Commonwealth of Pennsylvania, State Department. There are usually filing fees associated with state registration, so be sure to plan for that in your budget.
(5) Prepare Organizational Documents: Depending on the business structure you utilize, you will need to get some type of agreement in place. This can take the form of an operating agreement, partnership agreement, shareholder agreement, by-laws, buy/sell agreement if you have multiple owners, etc. When deciding on your initial business structure with your attorney, ask about the types of organizational documents that will come into play with your business so that you may better delineate the ownership roles and responsibilities.
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