One of the biggest questions prospective business owners have is this: "How long will it take to start my business?" The answer isn't always cut-and-dried. The amount of time it takes to launch a business varies widely, depending on the type of business you choose, the industry, state requirements and much more. Generally speaking, it takes around two weeks to complete legal business formation, but the other steps you'll want to take to plan and prepare yourself for business ownership can take a few hours, a few weeks...or a few months.
Check out the infographic below to plan your countdown to launch, but first, read up on the six steps you can take right now to get the business ball rolling, and how long you can expect each to take.
Step One: Legally Form Your Business
The paperwork involved in setting up a legal formation can often seem daunting. The incorporation of your business is the step that gives your business legal status to operate. At Incfile, we can handle all the specifics of state filing, whether you are filing a business in one state or many.
State filing is often the longest component of forming a company, simply because the government must approve the formation. However, Incfile makes it simple to cross this step off your list — the paperwork can be completed on our website in a single afternoon. Once the paperwork is filled out and submitted, it will most likely take less than two weeks to complete and will vary based on state filing timelines. Our website contains more information on state filing for LLCs and filing a corporation.
Just a reminder: though it only takes a couple weeks to legally form your business, this step is necessary before you complete other business formation tasks, like getting a business bank account or an EIN. Plan to make this one of the first to-dos on your countdown.
Step Two: Create Your Operating Agreement
An Operating Agreement is something that is required by many states. It is the binding agreement between members and owners of an LLC regarding managerial and financial responsibilities. It defines the duties that each member or owner will take upon themselves to see the business succeed. An Operating Agreement can be written using many online templates by simply filling in your company's specific information.
For those who prefer a "hands-on" approach, Incfile supports small business owners to manage your company using our Corporate LLC Kit, which includes an operating agreement template, along with other forms you'll need once your company is up and running, such as minutes, by-laws and a stock transfer ledger.
Whether you use an online template or Incfile's Corporate LLC Kit, the process of writing your operating agreement should not take more than a day to complete if you make it a priority.
Step Three: Obtain an Employer Identification Number (EIN)
An Employer Identification Number, or EIN for short, is a number the IRS will assign to your business for tax tracking purposes. It's sometimes also referred to as a Tax ID number — think of it like a Social Security Number for your business. Obtaining an EIN is an essential cornerstone of launching your operations. You will need an EIN before you can open a bank account, run payroll, or provide a W-9 form to your clients (if you run a services-based business).
For those of you who prefer a "one and done" approach, Incfile can help obtain your EIN during the formation process, with no extra time commitment from you. If you prefer to manage this process on your own, it's also possible to file for an EIN yourself at your state government website. This should take less than one business day to complete.
Step Four: Trademark Your Business Name
Although it's possible to launch your business without taking this step, giving your business name the protection it deserves means trademarking it on a national basis. Doing business in one state only protects your name in that state, or any state you are registered in. To provide comprehensive protection to your name and your brand, a legally binding federal trademark is required.
Incfile's legal team can register your trademark for you to ensure your business name is safe while saving you time in the process. You can expect trademark services to take anywhere from 3-7 business days.
Step Five: Filing a Doing Business As (DBA)
If you have incorporated your business under one name, but you are doing business under another name, you may need to file your fictitious name with the state. This is commonly called a DBA or Doing Business As. Check out the Incfile blog for a deeper understanding of all the ins and outs of using a DBA for your business, including a more in-depth look at when and why you need to file, as well as the benefits and drawbacks of doing so.
Step Six: Obtain Business Insurance
Never before has having the right coverage for your business been more important. Before you launch, it's critical that you understand the types of insurance that your business may need, and the risks associated if you operate while under- or uninsured. In short, insurance is helpful in protecting yourself and your business from natural disasters, accidents, damages, and potential lawsuits from employees, clients or customers. We recommend that you spend at least a day researching and applying for insurance with an insurance broker you trust.
All in all, these six steps are pretty universal, no matter what kind of business you wish to start, and together, they take around two weeks to complete. However, the planning and prep work you do before you get to this point is just as important to your business's launch and future success. How long that takes is up to you. No matter how much time you put into launching your business, when done correctly, the rewards are worth the investment. Let Incfile help you start your countdown to business ownership today.
Wendi is a freelance writer based in Indianapolis, IN, with over a decade of experience writing for a variety of industries from healthcare to manufacturing to nonprofit. When she isn't working on solutions for her clients, she can be found spending time with her kids and husband, working in the garden or doing more writing (of the fiction variety).