Start an Investment Business
Starting an investment business can be a very challenging yet rewarding experience. Make sure all the ground work and paper work is completed prior to opening your investment business. Decide what products you want to sell. For example, do you want to sell stocks, bonds, annuities or mutual funds? Do you want to sell large investments or small investments? Having investment experience is imperative to the success of owning and operating an investment company.
Instructions
1. Research and plan your business. Develop an extensive business plan complete with start-up summary, marketing strategies and financial plans. The Small Business Association (SBA) can further assist in helping with resources for starting a business. To start an investment business, it's necessary to have knowledge and an understanding of the Investment Company Act.
2. An investment business can normally be located anywhere. It may be wise to start off in an investment firm as an independent contractor. However, doing so will require you to split commissions with the firm.
3. Apply for a license. You must first get individually licensed to start and operate an investment firm. You may need a series 6 or 7 security license depending on the type of investments that you plan to sell. Series 6 licenses allows you to sell small investments and series 7 allow you to sell large investments. Stocks and bonds are considered large investments, while annuities and mutual funds are considered small investments.
4. Find start-up funding. Available funding includes loans, grants and community programs. Debt financing, equity financing and local revolving loan funds from the Small Business Association (SBA) are additional resources for funding. There are many licensing fees, permit fees and other fees that may be required. These fees vary by state.
5. Call the Internal Revenue Service (IRS) at 800-829-4933 and apply for an Employer Identification Number (EIN). The IRS will ask for specific business and personal information. Have all relevant information handy. Every business is required to have an Employer Identification Number. This helps the government identify businesses when filing taxes.
6. Register your company with the Securities and Exchange Commission (SEC). You must also register your business name with your state. To register your company with your state, contact the North American Securities Administrators Association. Before registration can be completed, you may have to undergo a background check, credit check and be fingerprinted.
7. Advertise your business everywhere, including newspapers, magazines and local radio stations ,using fliers, business cards and banners. Advertising is another key factor in the success of your business, so make sure the right people see your advertisements.
