Starting a business can be completely overwhelming. It can seem like there are a million things that you have to do. While coming up with your business model and making money seem to be important, there are steps that need to be completed before you can get to that point. Follow this list to ensure that you haven’t forgotten to do anything when starting a company.
Have an idea
Plain and simple: you can’t start a business if you don’t have an idea for a company. Make sure that your business is unique. It should fill a gap in an industry. How are you going to be different and stand out from your competitors?
Come up with a unique business name
If you use the name of a company that is already being used you could just say goodbye to your company before it’s even created. Make sure that the name you want to use is available so that you don’t end up getting sued by another company for stealing their name. A simple web search can preliminary tell you if the name is available. Another good web resource is The Thomas Register, which shows you unregistered business names. But to know for sure you need to check your state’s filing office to see if the name is in use and, finally, look at the United States Patent and Trademark Office (USPTO). At this point it might be wise to file for a trademark. While this isn’t necessary it’s a good idea to ensure that no one can steal your company name. Filing for a trademark is a long and expensive process that involves hiring a lawyer, but it’s worth it in the end.
Determine what type of business you’re going to be
You can choose from any of these five different types of businesses:
- Sole Proprietorship: a business that is owned by one person
- Partnership: a business that is owned by two or more people. Each person contributes their own resources and shares in the profits.
- Corporation: a company owned by shareholders. They reach this status through their ownership of the company’s stock. This choice is eligible for certain tax deductions.
- S Corporation: this leverages the company’s cash flow through their shareholders for federal tax obligations
- Limited Liability Company (LLC): a private limited company. If the company incurs any debt, the company members and employees are not liable for those debts.
Obtain a Federal Tax ID or Employer Identification Number (EIN)
This is a number that every business has, which helps the authorities identify them. In order to get one submit an application online through the IRS website.
Open a bank account
Start building credit for you business as soon as you can. You need to keep it separate from your own personal bank account, especially if you have bad credit, to make it easier to manage and so that it doesn’t get mixed up with your personal finances.
Other things to be sure to do: register your company name, comprehensively understand the state and local tax laws, file for the proper business permits and licenses, learn how to hire the right employees and the process behind it