What to Know Before Starting a Business

Before starting a business, there’s a lot of research to be done. This blog will help you get started on honing your business idea, choosing a location, and thinking about your financial future.

What’s the most important thing about starting a business?

The first step to starting a successful business is choosing something you’re passionate about. This will be the key to staying dedicated to the success of your business. You’ll need to perform extensive research to make sure your idea is feasible, there’s adequate demand and there would be a good return on investment.

Should I buy an existing business or start my own?

It depends on the cost and if you could be passionate adopting this previously established business. It may have assets such as validated procedures, operations, reputation, and a customer base, but it may end up costing too much. On the other hand, the business may have issues but offer an affordable price. Evaluate each business by its own merits to decide if it’s right. It may very well be a good idea to buy an existing business if you have the available funds so you can get ahead. Starting from scratch requires a lot of time and working capital. You could possibly become financially stable more quickly because an existing business has a track record to guide decision making.

What’s the best location for my new business?

Choosing a location may be very important depending on the type of business you’re running. Ultimately, you’ll want to do your research and balance the costs. Make sure you choose wisely when working with a real estate agent and a landlord. Read our blog about choosing a business location for more details.

What if I want to start a business from home?

This may be a good idea to cut costs and simplify your business if you can provide services to your customers remotely. In addition to a standard business license, you will need proper zoning approval from the city, both of which you can get from a city or county clerk. You’ll need to learn more about the zoning laws and licensing requirements in your neighborhood. Make sure your homeowner’s policy adequately covers your business activities and assets – you’ll probably have to purchase additional coverage. You might want to work with an accountant to understand the tax implications.

Will it be easy to get a business loan if I was able to get a personal loan with no issue?

Business loans are much more difficult to obtain than loans for a home mortgage, car, or credit card. They require more time, documentation, and are more heavily scrutinized.

What do lenders consider when making a small business loan?

Lenders consider many factors including cash (also called equity), amount of the loan requested, collateral (what you’ve pledged to forfeit if you default, as security for repayment), credit, business plan, repayment ability, and project feasibility.

My personal credit is bad. Will I still be able to get a business loan?

Lenders do consider personal credit history and may decline you for a business loan if you have poor personal credit. Look up your personal credit report to assess your credit. If you have a bad score, contact Consumer Credit Counseling Service or a similar nonprofit agency for guidance. You may need to work on your personal credit before reapplying for a business loan.

How do I make sure my business is legal?

The most important thing is to get help from a licensed attorney and make sure you have the proper legal structure in place – even if you’re business is small and still growing. An attorney will help you draw up all the appropriate contracts. Learn more about small business legal issues.

What types of insurance do I need?

Get a full list of the small business insurance you’ll need.

If you’re starting a business, talk with an H&K insurance agent about your individual business insurance needs. We hope to provide you with all the information you need about insurance protection for cyber crime, employment practices liability, and more. Contact the experts at H&K Insurance to determine the best way to protect your business.