Congratulations! You’re ready to start your own business. Before you sell your products and services, you need to make sure your affairs are in order.
Sounds boring, but if you don’t make sure you’re square with the IRS, you’ll be sorry down the line. To protect yourself, you need to set up a legal business entity (such as an LLC), get your accounting in order, and make sure you have a business phone number.
It can be difficult to keep track of everything. That’s why we’ve created a checklist that includes everything you need to do to make your business official.
In order to do business in the United States, you’ll want to incorporate as a legal entity. Depending on the size of your business, and how much you expect to grow, you’ll create an LLC or a Corporation. Most small businesses start as LLCs. You can easily incorporate, and learn more about each business entity, through the team here at Incfile.
Note: If you’re a one-person business, you can act as a sole proprietor, which means you don’t have to incorporate. However, many one-person businesses decide to become LLCs to protect themselves.
The bylaws of a corporation are an internal document that details the operating rules for the corporation. The bylaws of a corporation are typically adopted at the organizational meeting of the board of directors after the corporation has been filed with the state. The bylaws we will provide for your use cover all of the most commonly used provisions and will be customized based on your specific company information. After the corporation has been filed with the state, the directors of the corporation are required to have a "first," or organizational meeting to take care of things such as issuing shares of stock, adopting bylaws, appointing officers, etc., and keeping minutes of directors meetings and corporate resolutions is a required part of your internal corporate compliance.
Note: If you have special contingencies, survivorship, or any sort of complex situation, then we suggest you consult with an attorney.
Whether you operate as a sole proprietor, an LLC, or as corporation, you’ll want to get a Federal Employment Number (EIN) from the IRS. This number basically works as a social security number for your business. When you work with clients, you can give your EIN, rather than your personal social security number. You can go directly to the IRS to obtain an Employer Identification Number or can avoid it (because who wants to spend time with the IRS) by having Incfile get it for you.
If you want to trademark your business name, visit the U.S. Patent and Trademark Office’s website. At this site, you can register a name, but you can also check to make sure someone hasn’t already trademarked it. Trademarking your name protects you from copycats.
Satisfy All Business Licenses & Permits Requirements. If you operate a restaurant, you’ll need a liquor license. If you’re using a residential building as commercial space, you may also need a permit. You may know you need a particular permit, but may not know you need other permits, too. Incfile will make sure all your bases are covered for your specific business and within the jurisdiction your business is operating (city, county, state) when you order a Business License Research Package.
If you’re going to operate under a name besides the one you’ve used for your legal entity, you need to register it. You might use a DBA because you want to operate under a brand name instead of the company name, or are launching several products and want to set up different brands for each product. The benefit of using a DBA rather than creating a new company is consolidation of bookkeeping, bank accounts, and tax returns. For more information on registering a DBA, contact your local county office for more information on establishing a DBA.
Business insurance can help protect you, and is necessary for many types of businesses. The U.S. Small Business Administration’s insurance resource can help you understand the different types of business insurance, and whether or not insurance is necessary for you.
Setting up a business bank account is easy. Every bank has its own requirements to open an account, but most will require your articles of formation paperwork (from your state) and an EIN. Incfile can obtain and deliver everything you need to open up a business bank account. Note: When it comes to banks, choose one that works for you, whether it’s a large chain bank (i.e. Bank of America, Wells Fargo, and Chase), or a local one. Large chain banks require your business articles when creating an account, while regional banks may have other requirements. Call your bank before walking in.
These days, most small business owners and freelancers accept credit cards. If you use accounting software such as Quickbooks or Freshbooks, you’ll be able to accept credit cards automatically. If you operate a brick-and-mortar store, it’s worth looking into Payment Cloud, which allows you to accept credit cards on a variety of devices.
Many businesses require funding to get started, and you have to decide what type of funding will work for you. Many opt to raise capital from investors, qualify for a line of credit, take out business loans, get money from family, or use business credit cards. The SBA Access Financing tool help you identify what government financing programs may be available to help you start or expand your business. Remember, you can also bootstrap your business, which means you don’t take any outside money.
Accounting is one of the most important aspects of running a small business, so you need to find an accountant that can help you handle your taxes. A bookkeeper can help manage day-to-day accounting. Xero provides online bookkeeping services for small businesses.
You need a phone number so that customers, employees, and other business contacts can reach you. Rather than getting a new phone system, try a virtual phone system like grasshopper that gives you a business phone number, then forwards calls to your cell phone.
If you are going to hire employees, you’ll need to pay them. There are many payroll solutions out there, so you shouldn’t do your payroll manually. Take a look at Xero, Quickbooks Payroll, or Paychex.
If you hire employees, you’ll need to provide them with health insurance, as well as retirement plan options. The U.S. government now provides small business health insurance options through the SHOP Marketplace. You can look into retirement plan options through Fidelity Investments, Voya, or another service.
It may be tempting to design a logo yourself or use an inexpensive logo service, but it’s best to work directly with a graphic designer. Visit Squadhelp and check out the wide variety of designs. You can use Squadhelp to run a contest that will bring in dozens of logo options from different designers. Simply choose your favorite and start using it!
The company website can be tricky, and how you handle it will depend a lot on what you do. If you sell products and services via the site, you’ll need a different solution than a freelance writer or someone who runs a brick-and-mortar shop. You can use Shopify if you’re selling goods, or use a build-your-own website solution such as SniperMonkey, which offers hosting, maintenance, and even content updates in a hassle-free approach. If you need something more advanced, hire a web developer.