In 2019, there are a lot of options for investments and businesses available worldwide, thus the need for foreign currency never diminishes. Since countries have their own fiat currency, they will always need to trade their local currency when dealing with those based in other countries.
Due to this, the foreign exchange or Forex Trading market provides various opportunities when it comes to creating your own profit. But aside from becoming an Engine Forex trader, one of the most profitable ways to take advantage of foreign exchange trade is to start your very own foreign currency trading business.
The latter of which is to provide Forex trading platforms to retail Forex traders. With the influx of tourists and the growing global demand, there’s good money to be made in the Forex trade industry.
To start your very own Forex trading business, here are some expert tips you need to follow:
- Set business goals and plans
Having a business plan is the first step to creating a Forex trading business. This step involves defining your business and coming up with ways on how to stand out from the crowd. Without proper planning, your Forex trading business is going to inevitably fail because the lack of direction will lead to unclear paths.
Here are some of the inclusions of your business plan:
- Securing your start-up capital
- Defining your market
- Finding your business identity
- Feasibility of the business in your area
After setting your business goals and plans, you can decide on the kind of Forex trading business you want to put up.
- Determine the kind of business
During this phase, business owners should determine what their business should focus on. Considering that the Forex market is the largest financial market of the world, it helps to fill in a certain niche that will be able to make a profit.
To stand out from the rest, consider some of these options:
- Trading Forex on behalf of the clients
- Buying and selling Forex from leading countries
- Offering brokerage services such as currency exchange and international payments to both companies and individuals
- Offering specialized consulting services
Once you know what kind of business you want to put up, you need to make sure that your company is legitimate since you’ll be dealing with money.
- Establish a legal business entity
Your business entity will determine how big your business will potentially grow. In this step, budding entrepreneurs should consider whether or not they should provide service to a regional market, a national market, or even an international market.
To do this, you may have the option of choosing any of the following:
- General partnership - a business structure ideal for small scale Forex trading businesses.
- Limited Liability Company or LLC - a structure that protects you from personal liability, is flexible to operate, and does not require a board of directors or a team of shareholders to operate.
- A sole proprietorship - considered the simplest form of business entity. There is no formal list of steps to form a sole proprietorship as well as no separate tax forms.
Each legal business entity offers different advantages and disadvantages for specific situations, so make sure you take the time to find out what they are before you register your trade.
- Register for taxes
Several businesses are required to be registered for taxes, as mandated by their country’s government. If you are operating in the US, you may be required to register for various state and federal taxes prior to launching your business.
For business owners operating in different countries, visit your government’s website and contact your nearest internal revenue office.
- Open a business bank account
A business bank account enables business owners to keep track of their transactions by allowing one to manage their expenses and calculate tax liabilities. These accounts are different from personal bank accounts since they include special conditions for budding entrepreneurs.
When selecting the right bank for your business, consider their reputation and compare their charges, as well as interest rates.
- Acquire all the necessary permits
Depending on the country, region, state, or province you are residing in, certain business owners may be required to file a myriad of licenses and other permits from their national and local government.
Considering that requirements vary among different jurisdictions, it is important that you contact your local government to know what obligations you should need to fulfill first in starting your business.
Some of these necessary government permits may include the following:
- Business operation license either from your city or county
- Tax Identification Number
- Business Name permit
- Sales tax license
- Special licenses for online businesses
Regulation and permits are very important in making sure that you will not get into legal trouble upon operation. Make sure that you secure everything that’s required in your area.
- Get business insurance
A business insurance operates as a safety net for businesses if they ever face a financial slump or problem that could potentially harm their profits and workforce.
There are various business insurances available which include:
- Professional liability insurance
- Property insurance
- Home-based business insurance
- Product liability insurance
To know which insurance best suits you, consider the risk factors that come with operating your business which may include legal liabilities and employee-related risks.
- Create a marketing strategy
No business can succeed without a proper marketing strategy. Your market strategy includes operating on both digital and traditional means. Considering that most Forex businesses operate online, you may find it better to focus your marketing budget in establishing an online presence.
This includes doing any of the following:
- Creating a website
- Formulating an online campaign
- Taking advantage of social media advertising
- Putting the best search engine optimization practices in place
- Utilizing different tricks to grab your audience’s attention
If you are unsure where to start, you may want to consider hiring a digital marketing expert to get things done quickly.
A Forex trading business comes with its own number of risks and opportunities. In order to succeed in the market, one must be ready to meet certain requirements and challenges that could potentially harm their investment. To do this, remember to adapt a strong and disciplined mindset before you work.
Chris Browns considers himself as an expert in Forex Trading. He has been in this industry for decades, making him the most reputable brokers locally. He has been contributing articles to Engine Forex for years, with topics focusing on the different areas of forex trading - from a beginner’s guide to an expert’s point of view. During his free time, Chris loves to play tennis with his friends and family.