You've been busy dreaming up your business, making a business plan, securing a business name and registering your LLC. Now what? A record 5.39 million new business applications were filed in 2021, according to the U.S. Census Bureau. Now some of those business owners might be wondering, “What is the next step after incorporating a company?”
We’ve put together a list of the immediate next five steps anyone should take after incorporating a business. These steps shouldn’t take you much time, but they are very important for ensuring you maintain ongoing compliance with your state, are prepared to pay your business taxes and are set up for success.
What Are the Next Steps After Incorporating a Company?
Step 1: Understand Your Ongoing Filing Requirements
Many business owners who incorporate don’t realize that states will require them to submit certain forms annually in order to maintain their LLC status. These are your ongoing compliance requirements.
Remember, you registered your business as an LLC to protect your personal assets. Failure to satisfy your ongoing requirements could actually result in your business losing that benefit. That’s because if you do not satisfy your ongoing filing requirements, your LLC may be revoked or face administrative dissolution. Each state requires different forms, so it is important to research your state’s requirements to know exactly what you will need to provide.
The most common type of ongoing compliance form required by states is the annual report. This provides a status report to your state government, letting them know what you are doing. Not to be confused with the glossy booklets many corporations provide to investors, this type of annual report is a simple form that can usually be filed online at your state government website. These forms usually are associated with a small filing fee.
The annual report usually includes the following information:
- Business name
- Member name and contact number
- Business address (physical and mailing)
- Type of business, LLC number or NAICS code
- Registered Agent information
At this point, since you just formed your LLC, the most important thing is for you to be aware of what is required by your state and when you need to submit these requirements.
Step 2: Start Planning for Taxes Right Away
Even though you just started your business and the farthest thing from your mind is tax season, you still will want to plan ahead and start saving for taxes.
Paying quarterly estimated taxes is one way that business owners and solopreneurs make sure they stay on top of their business taxes. Estimated taxes are payments you make in advance, based on what you estimate you will be making during the year. You use IRS form 1040-ES to make these payments.
Be aware of the deadlines for estimated tax payments. These deadlines are as follows:
- April 15
- June 15
- September 15
- January 15 (of the following year)
Remember that as an LLC, which is considered a “pass-through entity,” you do not pay corporate income tax. Rather, the LLC’s business income “passes through” to your individual tax return as the business owner. Generally, you should try to save about 25-30 percent of your income for taxes. If you pay too little in your estimated taxes, you may face underpayment penalties.
You might also consider hiring a small business accountant for your LLC at this step. At Incfile, we offer complete business accounting and bookkeeping services at a low monthly cost to help make this step as simple and straightforward as possible.
Step 3: Market Your Business
Now that you have the personal liability protection afforded by registering as an LLC, it’s time to drum up some business. Marketing your business does not necessarily mean going out and hiring a high-powered agency to run ads for you. In the digital age where social media reigns, marketing has never been more accessible to solopreneurs and small business owners.
Here are the first few steps you can take to start marketing your business right away:
- Make a website for your business.
- Create social media accounts for your business and use them to post about what’s going on with your business.
- Make business cards and hand them out to everyone you meet.
- Send out a press release to your local newspaper to get the word out.
Looking for even more ideas? There are plenty of ways to market your small business without investing a lot of money.
Try joining a group of small business owners through your local chamber of commerce to network with others and get your business name out there in the community. Many of these organizations also have groups online and through social media that can be powerful in connecting you with new customers and audiences.
Step 4: Secure Business Banking
Ask any small business owner what the most important step after incorporating is, and they will tell you that it is finding business banking. It is very important to keep your personal finances separate from your business banking.
As soon as you register your business, you will want to take that new LLC out to find a business banking account so you can be sure to keep your bookkeeping separate from your personal finances.
Just like with personal bank accounts, there are many different types of business bank accounts to choose from, too. There are brick-and-mortar banks as well as digital-only banks, with emerging financial institutions that specialize in helping entrepreneurs.
You do not need to just add a business banking account to your personal bank account. You should take some time to shop around and find the best institution for your business’s needs. The business needs will differ markedly from your personal financial needs.
Some things to consider when choosing a bank for your business account:
- Is there a minimum deposit to open a business bank account?
- Is there a minimum balance requirement for business bank accounts?
- What are all the fees associated with opening a business bank account (such as transfer fees, transaction fees, etc.)?
- What type of customer service is available and how often?
- Do they offer business credit cards and what are some of the options?
- Is there a monthly limit to the number of deposits and transfers available with a business bank account?
You want to be looking for a bank that offers low fees and good benefits. So if the bank offers incentives to open a business bank account upfront, but has high fees that will hit you down the road, take that into consideration.
Banks have representatives who specialize in the needs of small business owners. Take the time to meet with them and ask the questions that matter most to your business before opening your business bank account.
Step 5: Get Business Insurance
Once you register your business as an LLC, you receive a substantial amount of personal liability protection. However, your business may require more protection in the form of business insurance to really give you peace of mind and to protect your business in a crisis.
There are many different types of business insurance for each niche business, from business insurance for pet sitters to product liability insurance for your ecommerce business, and a little bit of everything in between.
Business insurance can come in the following formats:
- Business liability insurance
- Business property insurance
- Business interruption insurance
- Cyber liability insurance
- Public liability insurance
- Product liability insurance
- Professional liability insurance
- Crime insurance
You are going to have to pay for business insurance, so you want to be highly specific about the plan you get to ensure that it will cover you in case of a crisis and that it is relevant to what your business does.
Start by calling your personal insurance carrier to inquire about the business insurance options they have available. Look around and talk to other business owners in your field to see what types of insurance policies they hold for their businesses.
Once you narrow down your options and find a provider that offers exactly what you are looking for. You should be picky and do your homework to ensure you get the best business insurance plan possible.
Bonus Step: Make Sure You Have Your Business Licenses Lined Up
Before you're official, make sure you have all the business licenses needed to operate your business. Incfile’s Business License Research Package will take the guesswork out of how to obtain a business license and the necessary permits. So that’s one less step for you, with the added peace of mind knowing you are operating fully legally and in compliance with your local, state and federal requirements.
Now that we’ve covered the next five steps you need to follow after forming your company, it’s time to get to work. You'll encounter many steps along the path toward success that will require expertise, education and inside tips. Incfile is here to help.