Starting a new business is exciting! But it’s important to plan and take appropriate steps at the outset to improve your chances of success and avoid creating problems down the road. Below is a non-exhaustive list of 10 key steps to consider. These steps should put you in a better position to focus your energy, resources and efforts on growing and managing your business.
1. Write a business plan.
Preparing an initial business plan will help focus your goals and chart a course of action. The plan should include details such as market research, the products or services you plan to offer, target customers, how you plan to make money, and anticipated costs for operating your business.
2. Choose a business name.
Put thought into selecting a name. Ideally, the name should reflect your brand and capture the spirt of your business. You should also do research to make sure your name isn’t already being used by someone else, particularly in your region of commerce. It’s also good to confirm the availability of a domain in case you may need to tweak your selected name.
3. Obtain a domain and purchase a website.
Once you select a name, you should purchase the domain rights to avoid someone else taking it. It’s also good to go ahead and purchase and create a website to launch with your new business. You can hire someone to assist with the website, or these days several online platforms make it easy to create and maintain a website yourself.
4. Choose a business structure.
You will need to choose a legal structure for your business. Your choice will impact registration requirements, taxation, your personal liability, and other legal issues. See our article on choosing a legal structure for your business for information on common options. It may be helpful to consult with legal counsel in making this decision for your business.
5. Business location.
You will need to decide whether to own or lease a commercial office space, work from a home based office, or have a hybrid situation. Regardless what you choose, you will need a physical address (that is not a PO box) for necessary licensing and permits.
6. Register your business (as applicable).
If you choose a business structure that requires registration with the Secretary of State, you will need to register your business and pay the required fees as part of starting your new business. It may be helpful to consult with legal counsel in completing the registration process, particularly with certain types of business structures.
NOTE: If you try to register on your own, be careful of third party sites masquerading as government sites which may charge more than the government sites.
For business structures that do not require registration with the Secretary of State, you will need to register your trade name or DBA in the county where you are based or do most of your business.
7. Get a federal tax id.
Most businesses need a federal employer identification number (EIN) to file taxes, open bank accounts and perform other essential tasks. You can apply through the IRS website at no cost and will need to answer a few questions about the structure of your business. It may be helpful to consult with legal counsel in obtaining an EIN, particularly with certain types of business structures.
NOTE: If you try to register on your own, be careful of third party sites masquerading as government sites which may try to charge a fee to obtain an EIN unlike the IRS site.
8. Apply for licenses and permits.
Most businesses need a business permit and possibly other specialized licenses from the city, county or state where the business is located or does most of its business. If you start or operate a business without obtaining necessary licenses and permits, it opens you up to fines and penalties and other legal consequences.
9. Open a business bank account.
Before you begin spending or accepting money on behalf of your business, you should open a business bank account. The benefits include separating your personal and business finances and ensuring accurate bookkeeping. You may also want to use merchant services to accept credit card payments from your customers and link your bank account to electronic payment platforms such as Paypal, Zelle, Venmo, CashApp, etc. to assist with bookkeeping.
You may need insurance to protect against certain potential liabilities or to obtain certain contracts or opportunities. For example, artists may need to show proof of insurance to have a booth at an event, or a company may need to show proof of insurance to work on a project.
If you have questions or need assistance in setting up a new business, please contact our firm for more information.