Starting a business will look different for everyone. Depending on your industry, location, and type of business, there may be specific requirements, licenses, and permits you need to obtain. While every business is unique, there are several important steps that apply to most new businesses. Here are some key areas to consider when getting started.
CHOOSE A BUSINESS NAME
One of the first steps in starting a business is choosing a name for your brand. Your business name should be memorable, easy to pronounce and spell, and representative of your brand. You also want to choose a name you will be comfortable using for years to come.
Think about how the name will work with your logo, website, social media, and other marketing materials. Taking the time to choose the right name now can help you build a stronger brand later.
Choose a Legal Structure
There are several legal structures to choose from, including a sole proprietorship, partnership, LLC, and corporation. The structure you choose can have a significant impact on your business.
Your legal structure can affect how your business is taxed, how much personal liability protection you have, and what administrative requirements you must follow. Because the right choice depends on your specific circumstances, it is important to research your options and consider speaking with a tax or legal professional before making a decision.
Obtain Required Business Licenses and Permits
Not every business needs the same licenses or permits. Requirements can vary depending on your industry, state, county, and city.
Research the requirements for your specific location and make sure you obtain any licenses or permits that apply to your business. Staying compliant from the beginning can help you avoid unnecessary penalties and problems later.
Obtain an Employer Identification Number (EIN)
An Employer Identification Number (EIN) is a unique number used by the IRS to identify a business for federal tax purposes. Depending on your business structure and circumstances, you may need an EIN to hire employees, file certain tax returns, or conduct other business activities.
Businesses that generally need an EIN include partnerships, corporations, and businesses with employees. An EIN can be obtained from the IRS by completing Form SS-4 or applying online through IRS.gov.
Secure Your Funding
One of the biggest challenges for a new business is having enough money to cover its expenses. Before launching, it is important to understand your startup costs and have enough funds available to handle both expected and unexpected expenses.
Funding may come from personal savings, credit cards, business loans, or other sources. Keep in mind that small expenses can add up quickly, and businesses often encounter costs they did not anticipate. Building an adequate financial cushion can give your business more room to handle unexpected expenses during the early stages.
If you want to explore business survival statistics, check out the linked video starting at 3:24: https://www.youtube.com/watch?v=oL-HPBlpAKM. Seeing how many businesses struggle to make it through their first several years highlights just how much planning, consistency, and dedication can be required to build a successful business.
Open a Business Bank Account
Keeping your business finances organized from the beginning is extremely important. Whenever possible, open a separate bank account for your business and use it exclusively for business-related transactions.
Separating your business and personal finances makes it easier to track income and expenses, determine profitability, prepare your tax return, and provide documentation if questions arise. It can also help you maintain clearer financial records throughout the year.
If you operate as a sole proprietor and a dedicated business account is not practical, maintaining a separate account for business activity can still help keep your records organized.
Secure Your Domain Name
You may not need a website on day one, but securing your domain name early can help ensure that the web address you want is available when you’re ready to build your online presence.
Ideally, your domain should be simple, professional, and easy for customers to remember. Your domain can also be used for a professional business email address. For example, at Wilson Rogers, our domain is wilsonrogers.net, allowing customers to easily find our website and providing professional email addresses such as jared@wilsonrogers.net.
Domain registrars such as GoDaddy and DreamHost can help you search for and register an available domain name.
Final Thoughts
Starting a business requires more planning than many people initially realize. From choosing your business name and legal structure to securing funding and keeping your finances organized, taking care of these foundational steps can help you start on the right foot.
Most importantly, do your research and determine what requirements apply to your specific business and location. Taking the time to plan ahead can help you avoid costly mistakes and give your business a stronger foundation for the future.