By Nykole Prevost, Senior Business Consultant, JPMorgan Chase | Special to the OBSERVER
Black business ownership is surging, fueled by Black women as the nation’s fastest-growing demographic of entrepreneurs. In fact, over one million new businesses started over the last decade are owned by entrepreneurs of color. It’s a promising trend, as local Black-owned businesses play a significant role in building wealth, creating job opportunities and celebrating diverse cultures.
Starting a business requires planning. You may already have a great business concept, but, before you start selling products or opening stores, consider these six steps to lay a strong foundation for growth:
- Make it official…legally – The first step is establishing your business by choosing between a limited liability corporation (LLC), a limited liability partnership (LLP) or a corporation. Registering your business as an LLC, LLP or corporation is crucial because it makes your business a separate legal entity and forms a financial protection barrier between you as the owner and your business.
- Make your business account work for you – Once the business is established, it is essential to determine your business’ spending needs and financial resources. The Internal Revenue Service (IRS) recommends all incorporated businesses have a business banking account, and there are several benefits to opening one up. For example, separating your personal finances from those of your business allows you to take full advantage of tax deductions, automate your bookkeeping, protect yourself from business debt liability and establish business credit. Consider speaking with a business banker for more information and available resources.
- Fund your business idea – Business credit is one of most common ways for entrepreneurs to fund a new business. It’s also a great way to access the capital that you need to start, run and grow your company. Much like personal credit, business credit signals to lenders how your company handles its debt. Stronger credit scores can increase your purchasing power by potentially making it easier – and, in some cases, cheaper – to secure loans and other forms of financing to cover day-to-day expenses, invest in inventory, hire additional staff and conserve liquid cash. It’s important to remember, though, that using credit responsibly is a crucial component of building any business.
- Take inventory of your financial resource – What are your income streams and how much could you invest in your business to create more customers, increase sales and produce opportunities for growth? Make a list of all your assets, including savings, retirement, business accounts, or home equity. Next, list out your liabilities, including credit cards, rent, mortgage, or car payments. Then, find out your net worth by subtracting what you owe from what you own. Work with your financial, legal and tax advisors to run through best and worst-case scenarios and find out what your options are. Financial resources like cash management solutions can be helpful when setting up your business.
- Create your online presence – Whether you have a brick-and-mortar business or you’re digital only, your customers need a way to find out more about your business and what you offer. Think about your target customer and what you want them to know about your brand. If you don’t already have a website, creating an online hub for your business is critical to getting your message out there and building a customer base.
- Build your dream team – As your business grows, you’ll need to hire people you can trust to get the job done and reach the next level. Assemble a team who brings a strong work ethic and diverse expertise. It’s also essential to hire against your weaknesses and find team members who can make you smarter, more strategic and more effective as you start down the path of growing a successful business. We also recommend seeking out mentorship. The Minority Entrepreneurs Initiative is a great way to gain an additional perspective on ways to stabilize, grow and scale your business from experts.
Visit a local Chase branch and speak with a business banker or check out educational materials at chase.com/business/next-level-biz to learn more about starting and managing your business.
Sponsored content from JPMorgan Chase & Co.