“I will open my own business!” – this is how adventure with the world of enterprise starts. The Internet is full of advice on how to start a business. Is that enough, or maybe we should remember about something else? Entangled in the red tape of bureaucracy, we can easily get lost and forget about some very important, though underappreciated, elements of the business adventure…
Opening your own business should start from determining measurable goals. What does it mean: measurable? We need to specify “what” we want to achieve and “when” we want to achieve each specific target. It is also important “how” we want to do it, so we need to think about the set of tools which will help us achieve each goal.
With an idea in your head, you need to transform it into something real and check the opportunities of such a company on the market. Thus, you need to develop a business plan. It is a very important step in the process of starting up an enterprise. Typically, a business plan includes: a list of contents, short presentation of the company, analysis of the company organisation and its environment, strategic solution, action plan and conclusions. Depending on the kind of business, developing a business plan may take a lot of time, but an effective business plan will open way to a grant, credit or EU funding which will support functioning of the company.
After that, you need to decide about the legal and organisational form of your business entity. You can for instance choose to open a one-man business. It focuses on a natural person, which means that registration is fairly easy (entry into the register of business activity). You will be taxed with a personal income tax and your business will be fully independent as an economic entity. A civil-law partnership is another option. It has no legal personality and it does not own any property, but it is regulated by the law of contract. There are also commercial partnerships: a general partnership (run under your own brand name, it has a “handicapped” legal personality, it has its own property, including share capital and assets bought by the partnership, a professional partnership (opened by partners in order to provide professional services to the public), a limited partnership (where one general partner is liable for debts, and the liability of the other partner is limited), or a limited joint-stock partnership (a general partner is liable for debts, and at least one of the partners is a shareholder who is not liable for debts of the partnership). The choice of a legal and organisational form depends on what the main activity of your business is going to be.
Having selected the form of your business, you need to take the next step, namely learn about the rights and duties of an entrepreneur. Those who want to run their own business should be familiar with such notions as business activity (paid production, commerce, services, construction activity performed in an organised and continuous manner), know who an entrepreneur is, what licenses, permits and regulated activity are, and what licenses, approvals and qualifications you need in a given industry. A future entrepreneur should perform his or her basic duties: registration (entry into the register of entrepreneurs), compliance with the legal regulations on business activity, marking the seat of the entrepreneur.
The formalities related to setting up a business are the main step, and they include registration in all the required registers and institutions. If the business is going to take the form of a partnership, then the partnership agreement has to be concluded. If a business activity of a natural person or a civil-law partnership is registered, it should take place in the commune or the town district of residence. Commercial companies, on the other hand, should be entered into the National Court Register. All the entities which start business activity have to apply for a REGON number, obtain a stamp and open a bank account. The business should also be registered in the tax office (application for a tax id). Registration in the social insurance company (ZUS) is the next step, and it should be done not later than 7 days since the day the business starts functioning. Moreover, you need to register with the National Labour Inspectorate (PIP) if you employ workers (within 30 days). If, for whatever reason, the entrepreneur wants to close his business, he should apply for cancelling his register entry as well as inform the social insurance company (ZUS) about it.
Last, but not least, comes the choice of tax regulations, including the form of taxation. It will be helpful here to analyse the income and tax deductible expenses, as well as the size and scope of the business. Entrepreneurs are also entitled to consult experts, who will help him deal with tax regulations.
One of the most frequent questions which future entrepreneurs ask themselves is: how to finance my business? The answer is: from your own savings, or family or friends’ financial support. Alternatively, you can apply for financing from local or regional loan funds, credit guarantee funds or bank credits (you need to develop a business plan and secure a collateral) as well as from the Operational Programme “Human Resources Development”.
This article presents basic issues related to business activity, as well as some notions to get familiar with and other useful information related to starting your own business.
Photo © Anna Karahan