Starting a business in the US
You may have always wondered what you needed to do to start a business. It may seem a daunting task but rest assured you don’t need an MBA to do it. You can do 90% of the work on your own and the other 10% I would leave to a good accountant and attorney. The order of the steps is not a “Hard” order you can do most of the steps at the same time as long as you have your official business name from the state before you put an official name on anything like business cards or bank account name. DISCLAIMER: This is for educational purposes only. I am not an CPA (yet) or attorney so I can’t give legal advice so I recommend you see an attorney for any legal advice.
Pick a name and Register your entity with your state you plan on predominantly doing business within. (Use Google Domains or GoDaddy.com to lookup website name availability)
Pick whether you want to be a Sole Proprietor (DBA), General Partnership, Limited Liability Company (LLC), Limited Liability Partnership (LLP), Limited Partnership (LP), etc. I will expand on these in the following blog post.
I recommend you get a lawyer to draft you an operating agreement or partnership agreement. You are not “required” to submit it to the state but it may come in handy if you were to get sued some day.
Get your EIN (Employer Identification Number) with the IRS. This is the equivalent of a Social Security Number for your business because it is a Tax Identification Number (TIN) to uniquely identify your entity for the IRS for when you do your taxes.
You can now open up your bank business bank account at your favorite bank. So its easier to track your expenses. BOOTSTRAPPING TIP: Look for a bank that doesn’t charge monthly fees and has online banking. I use BBVA’s Business Connect account because of its many features. But don’t be afraid to research your local Credit Union because they have more personal service and AMAZING rates on their credit cards for both business and personal. (Don’t forget to build up your business credit)
Pick an accounting system to help you keep track of all your expenses. I recommend Xero or Quickbooks online or even Wave. I would advise you to get help with this because accounting can be very complex even though the software is easy. (We can get you some really good deals on paying for the software. Contact us. I HIGHLY don’t recommend you wait until tax time to add up your expenses or tracking things on excel. You NEED a system to not only track your expenses for taxes but to also know how well your sales are or if you’re spending too much money and to track your cash and assets and vendor/debt/partner payments.
Decide if you are eligible to be an S-Corporation for the IRS. This is a very beneficial way of saving over 15% taxes on your Self-Employment taxes. This is pretty much a very legal loophole. It does have many limits like can’t be owned by foreigners or corporations and can’t have more than 100 shareholders or more than one type of stock. I recommend you contact us for help with this. Blog on this coming soon!
If you are to have employees and contractors, (know the difference! Blog on this coming soon too!) I recommend you get a payroll service to manage payroll. The LAST thing you need is to be in trouble with your state’s workforce commission or the IRS for not paying your employment taxes. This can be a HUGE headache and VERY expensive if overlooked. (We can help you with this too)
Sit down and make a document/excel/calendar (I recommend Google Docs or Google Keep/Sheets to keep track of this on the cloud) of all your compliance requirements and due dates. For example you make have to file annual franchise taxes, quarterly/monthly sales taxes, quarterly estimated payments to IRS and employment taxes, your entity’s tax return may have a different due date than your personal return, state employment taxes.
Now the fun stuff. Sit down and prepare a marketing plan. It can be a simple to do list of things you need to get done. Logo design, primary color theme, stationary, business cards, website, Facebook Page, Google Business page, Yelp Page, business email Google’s G-Suite identify your target markets and demographics and how you plan to create and maintain customers in contact. We have done this (see our awesome website) and we can help you with all of this too!
Get a lawyer to draft you any important legal documents you need such as engagement letters, terms and conditions, etc.
I recommend you get a digital file such as Google Drive, Box, or Dropbox to keep digital copies of ALL your important documents.