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Steps to take when starting a business

| Nov 27, 2019 | Buying & Selling Businesses |

Small businesses in North Carolina and around the country provide jobs for about 120 million people, and many of these companies grew from very humble beginnings. Turning a business idea into a thriving commercial venture takes vision, determination and effort, and the first step for most entrepreneurs is assessing the resources they have available and developing a plan. Purchasing a franchise allows entrepreneurs with cash in the bank to avoid the teething pains that nascent businesses usually endure, but the most common path to self-employment in the United States is purchasing an existing commercial venture or starting from scratch.

Entrepreneurs who achieve success usually perform thorough due diligence before taking action, and this is especially important when purchasing an existing business. Thriving companies are sometimes offered for sale when their owners pass away or wish to retire, but many businesses are put on the market because sales have been disappointing. This is why it is crucial for entrepreneurs to have the financial records of business for sale scrutinized by an experienced accountant before putting in an offer.

Financial experts can also help entrepreneurs to decide how to finance the cost of purchasing or starting a business. Startup capital is commonly raised by tapping into home equity, taking out an installment loan or approaching venture capitalists, but banks and investors may be reluctant to extend credit or put money into a new company unless entrepreneurs are providing funds of their own.

Investors will also expect to see business plans that include detailed financial projections and an assessment of any legal issues the new business could face. Attorneys with experience in business transactions may help entrepreneurs create business plans, and they might also provide advice about the advantages and disadvantages of forming sole proprietorships, partnerships, LLCs and Chapter C or subchapter S corporations.

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