The Simple Steps to Actually Launching your Business
You have deep passion for the business you are starting, but whether you are a business coach, a coffee shop owner or a software startup, there will be many aspects to running your business that are outside of these passions. Some might call it the boring stuff, but I am here to help ensure you have the basics covered. If you are a brand new business, or just wanted to make your current business endeavor more legitimate, use this business checklist to help build a sound business.
1. Form an LLC or incorporate - In my opinion, no matter how small your business is, it’s worth forming an LLC or incorporating for a few reasons.
Helps protect your personal brand and assets.
If you form an LLC, you still file taxes the same way you would as a sole proprietor. By default, an LLC is taxed as an individual unless otherwise elected, so whether you are a sole proprietor or a LLC you will still file the same Sch C to report your business earnings as part of your 1040 (personal tax return).
If you incorporate, you will file a business return instead of the filing being part of your personal tax return. In general, I don’t suggest incorporating right away unless you plan to raise through venture capital funding in the near future.
Either an LLC or a corporation gives the appearance your brand is legitimate and serious about doing business.
This process is fairly straightforward to do yourself, but if you would like to outsource I would recommend LegalZoom.
2. Obtain an EIN - An EIN (employee identification number) is essentially a social security number for your business. Corporations must have an EIN number, but LLC’s have the option to obtain one.
If an LLC does not have an EIN number, you will have to use your SSN for tax purposes. This includes both filing your tax return as well as filling out W9’s for other individuals and companies you subcontract for.
Obtaining an EIN is free and can be done online via the IRS website.
It takes less than 10 minutes to create an EIN, it is so easy I made a TikTok to show you how!
You will likely need an EIN to open a business bank account.
3. Open a business bank account
I cannot stress enough the importance of separating your business and personal finances, and a business bank account is the first step in doing so. If you need to continually transfer money from your personal account to the business account to cover expenses for a bit, that is totally fine.
You can open a bank account anywhere but make sure that it is completely separate from your personal account (not just a sub account under your personal checking).
My favorite bank for small business is RelayFi for small businesses and Brex for venture backed companies.
4. Register for sales tax and other local taxes in your state and any other applicable states
If you are not sure if your business is required to file sales tax or other local taxes such as exposition tax or franchise tax, reach out to a CPA to assist you.
5. Obtain a domain
Even if your business is not ready for website, I highly recommend you claiming a domain now so that you know it’s available.
I would recommend using GoDaddy. GoDaddy allows you to create a domain and also connect it to your Gmail Suite. Prices start at $12 per month to have your domain email address, personally I think it really adds to your business legitimacy have the domain email.
6. Register for a trademark
·Brands now more than ever have a global presence thanks to social media. In order to not have to rebrand down the road, I highly recommend getting your business trademarked ASAP.
I highly recommend Sprout Law, she works on a flat rate fee and is very transparent in both the pricing and the process.
7. Find an attorney for legal templates
For most small businesses, an attorney is not necessary. Instead, I recommend finding someone who provides legal templates for a flat rate fee. Check out The Legal Paige for contracts, NDA’s and non-competes, website clauses and much more at a reasonable prices!
8. Find a bookkeeper & tax accountant
Of course I had to throw this one the list! Understanding your business finances is vital to making business decisions. The earlier you hire a bookkeeper, the easier It will be to integrate them into your business.
A good bookkeeper and tax accountant will work together (if they are not the same person) and help you understand what is classified as a business expense to help optimize your profit and decrease taxes owed.
9. Get business insurance
Business insurance is relatively inexpensive and generally based on your current revenue. It is worth the purchase to help mitigate future risk. I would recommend getting a quote from Hiscox.
While this is just the beginning, these steps will provide your business a great foundation to flourish and grow!
Have questions on starting your own business? Reach out!