There’s a lot to do before that first dollar changes hands: Starting a business begins long before you fill out an application for business financing—and addressing these issues can help you secure that financing.
Write a detailed business plan
- You wouldn’t start building a house without a blueprint; you shouldn’t start your company without a business plan
- Business plans typically map out the course of the business for 3-5 years, and are reviewed and revised regularly as the business moves forward
- There are many books and online resources that can help with writing a formal business plan; the Small Business Administration website is a good place to start
Guide that breaks down all the important points and smart tips when writing a business plan.
Set up your professional support system
- Find an accountant who specializes in your type and size of business
- Depending on your business, you may also need to engage the services of an attorney
- Having the right professionals in place from the start accomplishes 2 major goals: They’ll have a complete understanding of your business from day one, and your time will be freed up to run your business
Handle those administrative details
- Your business will need an employer identification number (EIN); the IRS website can help you with that
- You’ll need to register your business name, which is typically done at the administrative town or city where you live; your local chamber of commerce can help with specifics
- You’ll need to determine the legal structure of your business (sole proprietorship, partnership, Limited Liability Company (LLC), corporation, S corporation, nonprofit or cooperative); this is where your accountant and lawyer can help
Now you can start thinking about financing
- Bank of America doesn’t have programs specifically for startups; our business financing requires you to be in business for at least 2 years
- Your business plan is important to your financing: Many financial institutions who provide startup financing will want to see your plan as part of your application
- You’ll need that EIN for your financing application—and having an accountant and/or attorney alongside you throughout the application process is a smart idea