Are you thinking of starting your own business? If so, you're in for a lot of hard work - but it's definitely worth it! The first step is to gather all the information you need to set up your business.
In this article, we'll give you a basic overview of what steps you need to take to start a successful business. Keep in mind that there are many types of business entities, so you may need to do additional research depending on your specific situation. There are also important legal structures to understand along with business licenses that you may need, so it is always good to consult for legal advice and local business registration office. But with these guidelines, you should be able to get started on the right foot.
Choose a name for your business
The first step is to choose a name for your business. This can be tricky, since you want to make sure the name is available and also meets all state and federal requirements.
There is a chance that someone else may have already registered the name you want, so it's a good idea to do a trademark search. You can do a search of business names on the internet, or check with your state's Secretary of State office.
Decide on a corporate entity structure
There are a few different types of corporate entities you can choose from when starting your business. The most common type is a corporation, but there are also limited liability companies (LLCs) and partnerships.
Which corporate entity you choose will depend on a few factors, such as the state you live in and the size of your business. You should talk to an attorney and CPA to help you decide which is the best option for your business.
Pick a location
If you are planning on having premises for your business, you will need to pick a location. You may want to consider factors such as taxes, the cost of doing business, and the availability of employees.
Register your business with the state and federal government
Once you've chosen a name, you may need to register your business with the state and federal governments. This will give you legitimacy and help protect your company from others using the same name.
Your location and business structure will determine whether you need to register with the state or federal government. Generally, if you're doing business in more than one state, you'll need to register with the federal government; if you're not doing business in other states, then you'll need to register with the state.
Registering your business is relatively easy. You can usually do it online, and the government will provide clear instructions on what you need to do.
Register your business with local authorities
In many cases, your city or county may require you to register and pay a small tax to operate your business within their limits. This is also true is you are a home-based business.
Get an Employer Identification Number (EIN)
If you plan to hire staff members, you'll also need to get an Employer Identification Number (EIN) from the IRS. This is basically like your business's Social Security number and is used to track company income and taxes. To apply for an EIN, go to irc.gov and click on "Apply for an EIN."
The EIN application process is simple and can be completed online in minutes. You'll just need to provide some basic information about your business, such as its name and address.
Having an EIN allows you to open a business bank account and hire employees. It's also required if you want to file taxes as a business.
Set up a bank account for your business
Next, set up a bank account for your business. Make sure the account is in the company's name and that you have checks and a debit card issued in that name. This will help you keep your business and personal finances separate.
There are a couple of different kinds of business bank accounts:
A sole proprietorship account is just for your business; any money deposited into this account is considered the company's income.
A partnership account is shared by two or more business owners; any money deposited into this account is considered a joint venture.
A corporation account is for businesses that are registered as corporations with the state government.
Purchase liability insurance
Liability insurance protects your business in the event of an accident or injury. It's important to have this coverage in place, especially if you're running a physical location.
Getting liability insurance is easy. Just contact an insurance agent and they will help you find the right policy for your business.
Set up your accounting system
One of the most important aspects of running a business is keeping track of your finances. You'll need to set up a basic accounting system to do this. This can be as simple as creating Excel spreadsheets or using online tools like QuickBooks or FreshBooks.
There are a number of different accounting platforms on the market, such as Xero, Wave Accounting, and Sage 50. You'll want to choose one that's suited to the size of your business and that you're comfortable using
File for foreign qualification
If you plan to trade across multiple states or even internationally, you may need to file for a foreign qualification in order to do so. This process can be complicated and time-consuming, so it's best to consult with an attorney or accountant who specializes in this area.
Create a company culture
A company culture is important for any business, but it's especially important for startups. A strong company culture can help employees feel like they're part of something larger than themselves, and it can also make them more productive.
Creating a company culture can be difficult, but it's worth the effort. Here are a few tips:
Encourage employees to socialize with each other outside of work
Create team goals and reward employees when they're met
Hold team building exercises
Be transparent with employees about the company's goals and strategies
Create a mission statement
A mission statement defines your company's purpose and how it plans to achieve its goals. It should be short, concise, and easy to remember. Your mission statement doesn't need to be perfect, but it should be something you can always refer back to. Having your mission statement written down will also help you stay on track.
When creating your mission statement, ask yourself the following questions:
What is our company's purpose?
What are our goals?
How do we plan to achieve these goals?
Start your marketing efforts
Once you have all your paperwork in order, it's time to start your marketing efforts. You can create a website, set up social media profiles, and start advertising your business.
Make sure you have a good logo and branding that represents your company well. Having a professional-looking website and marketing materials will help convince potential customers to do business with you.
Get expert help
These are just some of the steps you need to take to set up your business. For more information, consult an attorney or accountant who specializes in small businesses.
MyAccountingCrew.com offers excellent consultation services, to help you get your businesses started, as well as continuing support along the way through CFO advisory, outsourced accounting, and tax solutions.
With the right planning and preparation, you can make sure your business is off to a strong start!