Business Finances

Starting A Business

Starting a business is a dream for many Central Texans, and it can often be financially rewarding. However, many first-time business owners quickly find themselves overwhelmed. A+FCU experts created this guide to make sure you know what to focus on before you start your business and how to plan for it.

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Step One: Solidify Your Idea

Starting your own business is a big decision. Before you take the leap, make sure you’re committed to your idea and the work ahead. Answer the questions below to think things through before moving forward.

  • What’s my idea?
  • Am I providing a product or service?
  • Who’s my target customer?
  • Is there a need for my idea?
  • What’s the market like for similar products/services?
  • How’s my idea different from the competition?
  • Do I have the resources to start my business?
  • Can I make a profit?
  • Will I need to hire anyone?
  • What business structure is best?
  • Do I need to register my business?
  • Do I need certain licenses or permits?
  • Why do I want to do this?

Once you have a good idea as to the answer to these questions, you can go into more detail in the next steps.

Computer with arrow graphic over an image of someone reviewing a business plan

Step Two: Conduct Research

  • Target customer: who will purchase your product or service? What’s their income like? Where do they live? Is there a particular gender or age group you’re targeting? Finding your target audience will help you connect with them and help you tailor your business to fit their needs.
  • Product: it’s good to get feedback from your target customers. You can do this by enlisting them to complete a questionnaire, survey, or interview to get more in-depth details on what their preferences are and whether or not they’d buy your product.
  • Market: look at industry trends and demographics, along with information about the current economic landscape. Is now a good time to start your business? Are there barriers limiting market entry? Is the market saturated or is there room to gain market share?

Step Three: Writing A Business Plan

A strong business plan develops the framework for your business. In addition to laying out specifics about what your business entails, how it’ll be structured, and your goals, a business plan plays a critical role when applying for financing or enlisting investors.

If you’re a well-established business, your business plan may look a little different as you have more history to include. The guidance provided below is best suited for those who are in the early stages of building a business.

Often written last, the executive summary is the most important piece of your written business plan. Once you’ve completed the other sections, you’ll pull important highlights from each to add to the executive summary. The goal is to give the reader a brief overview of your business, where you are now, and where you want to go.

This section usually includes:

  • Basic business information
  • Mission statement
  • Management information
  • Growth plans

In this section, you’ll go into greater detail about your business. You’ll want to include information about the structure of your company, what the company offers, details about the current industry/market, how your product/service will meet the needs of the marketplace, and information about your ideal customer base. Think of this section as your elevator pitch.

Build on your initial research and provide a detailed look at the market in which you plan to sell your product or service. The goal is to show your understanding of the market, including opportunities and limitations, and explain how your business intends to compete.

  • Describe the current industry. What has growth looked like over the past couple of years? What predictions are there for the future?
  • Narrow down to your target market. The industry might be large, but your target market should be specific. Think about what you offer and who would benefit most from your business.
  • Research your target market. Gather as much information and data about your target market as possible. How big is the target market? What’s the potential? Can you find consumer data on your target market?
  • Research your competitors. Who else is out there? What are their strengths and weaknesses? Where does your product/service fit into this industry/market? Why would a consumer choose you over the others?
  • Determine your pricing. Use the information you gather here to determine your pricing model.
  • Research regulations. Make sure you know what city, state, and federal regulations you need to follow.

Think of this section as a combined resume for all your owners. In addition to detailed information about each owner (if multiple), this is also the section where you’ll detail your organizational structure. As you map it out, make sure to include a chart with detailed responsibilities and tasks for each owner/employee/area.

After the organizational chart, you’ll want to list out all the business owners, their role in the business, and information about their history and experience. The goal is to show who’s doing what and that those running the business have experience and know what they’re doing.

At this point, you’ll also want to consider your business structure. Some of the most common business structures are listed below. Keep in mind, this is only a guideline. Rules, liabilities, taxes, and requirements can vary by state. Consult a tax professional for guidance for your specific business needs.

Ownership, liability, and taxes for various business structures,
Business Structure Ownership Liability Taxes
Sole Proprietorship One person Unlimited personal liability Self-employment tax, personal tax
Partnerships Two or more people Unlimited personal liability (unless structured as a limited partnership) Self-employment tax (except for limited partners), personal tax
Limited Liability Company (LLC) One or more people Owners aren’t personally liable Self-employment tax, personal or corporate tax
Corporation – S Corp One or more people, but no more than 100, and all must be U.S. citizens Owners aren’t personally liable Personal tax
Corporation – Nonprofit One or more people Owners aren’t personally liable Tax-exempt, but corporate profits can’t be distributed
Corporation – C Corp One or more people Owners aren’t personally liable Corporate tax
Corporation – B Corp One or more people Owners aren’t personally liable Corporate tax

In this section, you’ll provide as much detail about your product or service as possible. Include information about how you plan to make/develop your product/service, how consumers will use it, and where you are in the development process. Be sure to research any existing patents, trademarks, and the like to ensure you haven’t crossed any legal boundaries.

You’ll need to include a promotion strategy in your business plan. This’ll detail how you plan to market your product to your target market and how you’ll handle sales.

Use the market research you already have to determine different methods for reaching your target market.


  • How much money can you afford to spend on advertising?
  • What types of advertising do you plan to use?
  • How will you track results of your promotions?
  • How will you encourage customer loyalty?
  • What’s your sales message?
  • How do you plan to handle sales?

The final section is used to show financial projections for your business. If you’re presenting to investors and are looking for financing, you need to show your current or projected income, expenses, cash flow, and more.

Even if you’re not looking for additional funding, this section helps determine your sales goals to help you cover expenses and, hopefully, make a profit.

As you put together the documents and visuals, include projections for 3-5 years:

  • Income statement
  • Balance sheet
  • Cash flow statement

If there’s more you’d like to include in your business plan, it can be included in separate sections or in the appendix. If you’re applying for funding, for example, you can detail out what the funds will be used for in a separate section.

Other things you may want to include:

  • Additional charts or data
  • Letters of recommendation
  • Credit histories
  • Licenses or legal documents

The important thing to remember is to write it down so you have your plan to guide you as you start your business. If you find yourself in need of assistance, go over a few sample business plans or check out a business mentorship/counseling program, such as Texas State Small Business Development Center or BiGAustin.

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Reasons To Keep Finances Separate

Blurring the lines between your business and personal funds can put you at a disadvantage when it comes to certain tax benefits and can leave your personal assets and credit unprotected.

Business Banking

While you may or may not be required to open a business account, there are quite a few benefits to doing so. An account can help with personal liability protection, keeping business finances separate for tax time, establishing a banking relationship for future credit needs, and improving client or vendor perceptions.

Checking Accounts

With a Business Checking Account, you’ll have access to a business debit card and the ability to accept or make payments, deposit checks, pay bills online, and keep up with your business’s cash flow. Some checking accounts even pay dividends.

Savings Accounts

Complement your account with a Business Savings Account. You can sometimes earn dividends with a nominal balance, and as is the case with a personal account, a Business Savings Account can help you separate funds for unexpected or upcoming expenses.

Business Services

Your financial partner may also be able to provide additional services. At A+FCU, we can help with services that include bill pay, cash management, merchant services, and Health Savings Accounts for self-employed individuals and businesses.

Supporting Business Documentation

To expedite the opening of your Business Membership Account, gather the necessary information ahead of time. Here’s a list of supporting documents you may need to provide when opening an A+FCU Business Checking Account. Additional documents may be requested later in the process.

Owners & Authorized Signers

  • Each individual with ownership interest of 25% or more and each authorized signer will need to provide their name, address, Social Security number (SSN), birth date, and valid form of identification.

Sole Proprietorship

  • DBA/ANC (if applicable) – recorded in county records
  • EIN certificate from IRS or SSN


  • EIN certificate from IRS
  • Signed minutes from association meeting (identifying officers authorized to sign on account)
  • Girl Scout accounts: must complete Troop Bank Account Request form and provide the Board Resolution from the Council of the Girl Scouts of Central Texas

General Partnership (GP)

  • DBA/ANC (if applicable) – recorded in county records
  • EIN certificate from IRS
  • Signed copy of Partnership Agreement (identifies partners and their authority)
  • Registration with Secretary of State (if applicable)

Limited Partnership (LP)

  • DBA/ANC (if applicable) – recorded in county records
  • EIN certificate from IRS
  • Signed copy of Limited Partnership Agreement and all amendments (identifies partners and their authority)
  • Certificate of Limited Partnership or Certificate of Formation filed with Secretary of State

Limited Liability Partnership (LLP)

  • DBA/ANC (if applicable) – recorded in county records
  • EIN certificate from IRS
  • Signed copy of Partnership Agreement (identifies partners and their authority)
  • Registration filing of LLP from Secretary of State as a LP or GP
  • Requires annual registration with Secretary of State

Limited Liability Company (LLC)

  • DBA/ANC (if applicable) – recorded in county records
  • EIN certificate from IRS or SSN if sole member
  • Certificate of Formation filed with Secretary of State
  • Company Agreement or Regulations (identifies how the business is managed, who the managers or members are, and how they conduct business)


  • DBA/ANC (if applicable)
  • EIN certificate from IRS
  • Certificate of Incorporation or Certificate of Formation and all amendments filed with Secretary of State (should list shareholders)
  • Bylaws and amendments (identifies how business is governed and how business is conducted)
  • Corporate Resolution or Corporate Minutes (identifies officers and who has authority to sign)
  • Certificate of Good Standing (issued by State Comptroller to verify franchise taxes are paid annually)
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Building Business Credit

Establishing business credit can show lenders, insurance companies, and other entities that your business is able to repay obligations.

While you may have access to personal credit, maintaining a separate business account and credit profile can contribute to building a healthier business and protecting personal assets from business liabilities.

Where Do You Start?

Experian™, one of the three largest credit reporting agencies, recommends you take the following steps to begin building credit:

  • Incorporate or form an LLC (Limited Liability Company) to ensure your company is seen as a separate business entity
  • Obtain a federal Employer Identification Number (EIN)
  • Open business accounts in your legal business name
  • Set up a dedicated business phone line in your business name and make sure it’s listed

Registering with Dun & Bradstreet® is also often encouraged. Obtaining a D-U-N-S Number is free and establishes your credit profile with D&B. Vendors and creditors are then able to pull a report with your company’s information and credit rating.

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How Do You Begin Building Credit?

A business can apply for various types of credit accounts. One of the most common is a business credit card. This option can provide flexibility and help separate personal and business transactions for accounting and tax purposes. As an added benefit, some business credit cards offer rewards or discounts.

Other forms of business credit include vendor, retail, and service credit, whereby business-to-business merchants report trade lines to the business credit bureaus. In this case, you’d receive goods and services in exchange for a promise to repay before a specified due date.

How Do You Raise A Business Credit Score?

Once your business has established credit accounts that report to business credit bureaus, your business can focus on building positive credit history. Improving a business credit score is much like improving your personal credit score.

Here are some recommendations:

  • Pay your bills on time, if not earlier
  • Keep balances low
  • Add trade references
  • View your credit report periodically
  • Dispute reporting or inquiry errors

How Can You Obtain A Business Credit Report?

The three largest business credit bureaus are Dun & Bradstreet®, Experian™, and Equifax®. Unlike personal credit reports, you must pay to view your full business credit file. Here’s how you can obtain a credit report from each of these credit bureaus.

Dun & Bradstreet

Access D&B Business Credit Reports with the purchase of one of their monthly plans. You may also monitor changes to your D&B® scores and rating for free with their D&B Credit Insights Free product.

Price Range

$49 per month


Obtain your Small Business Credit Report sample to see reported information for yourself and other businesses. This includes the company profile, credit summary, public records, risk scores, and payment trend and payment index.

Price Range

Must Request Quote


Obtain instant business credit reports online. You can monitor the health of your own business credit report and receive change alerts, or make insightful credit risk decisions about prospective business partners, suppliers, and customers.

Price Range

As low as $39.95 or $189 per year

Programs, rates, terms, and conditions are subject to change without notice. Normal lending criteria apply. All loans subject to credit approval.

Providers and products are mentioned for educational purposes only. This in no way constitutes an endorsement or approval by A+FCU. Refer to the external organization’s site for the most up-to-date information as their products and terms are subject to change.


Business Resources

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