Have you decided to start taking the steps to start a small business in California? It can be an adventure to chase after your dream of having your own business and it can be achieved if you follow the proper steps.

Plan Your Business

You might want to be a small business owner, but do you have an idea of what your business will be? You'll want to create a business plan that you're confident with as the first step toward operating a small business.

Before planning out your business, come up with a service or product that can help others with their needs or wants.

You'll need a business plan before you can obtain any funds. A solid business plan will help act as a roadmap to launching and operating your business.

Types of Business Structures

There are four types of businesses that determine how you'll handle your venture and your taxes. Sole proprietorship, partnership, LLC, and corporation are the four types of business.

A sole proprietorship means that the business is owned by one person, while a partnership is owned by two or more people. A limited liability company is one where the business owner's personal assets are protected.

Corporations are owned by shareholders and have a board of directors specifically picked by the shareholders. The corporation can continue on even if the board of directors and shareholders change.

There are S and C corporations that affect how taxes are done. An S corporation doesn't pay taxes but the owners report revenue as personal income. A C corporation pays taxes on their income while the owners and employees also pay taxes on their income.

Obtain the Funds Needed

You'll need to obtain the money you need to get your business started in California. There are a few different ways that you can find the funding you need to get going; information from the SBA or the California Small Business Development Center can be useful with business resources.

You could use your own personal funds or ask friends and family if they want to loan you the money. If you'd rather go through a bank, then you can find small business loans there.

Applying for grants can provide some of the money you need. A grant is money that is awarded by a government entity or a private business and doesn't require being paid back.

Register Your Business With California

When you've obtained your funding and you have a business plan, you'll need to register your new business with the state of California. Regardless of what business type is selected, the minimal actions you'll need to take to register your business include creating a business name, picking a registered agent for service of process, getting an Employer Identification Number from the Internal Revenue Service, and filing your formation documents.

Doing business as a sole proprietor doesn't require filing any fees with the state. The purpose of registering is so that you can pay business tax, the California state income tax, and federal taxes. There are different filing fees associated with registering according to the type of business structure you choose.

With a California LLC, you'll have to file Articles of Organization with the California secretary of state. When starting a California corporation, Articles of Incorporation must be filed with the California SOS. At this point, they must be an appointed Agent of Services.

Cover Insurance, Licenses, and Permits

You'll want to obtain the right business insurance, a business license, and any applicable permits before you start operating. This will save you from being fined or put out of business. Insurance can provide liability protection in case of a physical injury.

Having the proper insurance can save your business entity from any disastrous events that would cost heavily otherwise. Be sure to get coverage for every portion of your business that requires it. An insurance agent should be able to help you get all the best deals for your insurance needs.

Be sure to apply for any of the licenses or permits, such as a seller's permit or any serving permits, that you'll need to have to legally operate. You can use CalGold for any permit assistance.

Picking a Business Location

For a brick-and-mortar business, you'll need a location for your business. Whether you're looking for a prime location in Los Angeles or San Diego, you have the option of renting outbuilding space, purchasing a building, or building a new one. This can all depend on your budget and type of business.

Look for an area that your business will fit into well and receive the traffic and attention it needs to thrive. If you're planning to build, then follow the zoning regulations of your town.

Set Up Your Accounts

For most business purposes, you'll want to have a separate business bank account for liability purposes. If you plan to accept people's credit and debit card payments, then you'll want to have a merchant's account. Search around for the best banks that offer the best rates for your business bank account and business credit card.

Hiring the Right Help

If your business requires having employees to operate, then you'll want to hire employees that are the right fit for the job.

Pay for the appropriate level of experience that you need to operate while maintaining your budget. Know when it's time to let an employee go and when you need to hire more staff to handle expanding work.

Obtain the Right Products or Inventory

Ensure that you have all the necessary products or inventory before you launch your business. You don't want to be caught in the opening of your business without the essential things you need for success.

Know Your Logistics

If your business includes sending products as a package, then you'll want to have your logistics system figured out. You can either mail out products through companies such as FedEx or UPS or you can outsource it through a third-party logistics company (known as a 3PL).

Launch Your Business

Set a date for the opening of your business and try to get the word out by any means necessary so that you can start building some momentum for your business.

You can promote a launch event that will draw people's attention to the opening of your business. When you make a strong first impression, you can generate returning customers.

Promote, Market, and Grow

After you've opened your business, it's time to get to work. Learn how to run your business in an effective manner while properly promoting and marketing yourself for further growth. You or your marketing team will want to stay up to date on marketing trends because they constantly change to meet consumer demands.

Growing your business means keeping precise track of your finances so that you can stay on the good side of the IRS and watch profits and losses.

Use Skynova to Help Track Your Business Finances

Skynova offers accounting software that can simplify your business finance needs. Our software can help you keep track of all of your invoicing and transactions, as well as save all receipts. Skynova software solutions can help you accurately manage your accounting and economic development with ease.

With a 21-day free trial, you can see how Skynova will make money management a smoother process and help you on your path to owning a successful California business.

Notice to the Reader

The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always consult with a professional accountant to ensure that you're meeting accounting standards.