Many business owners have an idea but are in the dark when it comes to starting their business correctly. Once you’ve come up with your business idea and know where you’ll obtain the money to fund your new startup company, the next step is following our instructions below.
*NOTE: This is a general startup checklist – click here for a State-specific Startup Guide.
Select a Name and Legal Structure
You basically have 4 choices when selecting a legal structure.
Sole Proprietorship
Partnership
Limited Liability Company (LLC)
Corporation or S-Corporation
TIP: A company such as Swyft Filings can help explain the difference and file all of your forms for you for a small fee.
Write a Business Plan
If you haven’t already, prepare at least a preliminary business plan.
TIP: This can be completed on a cost effective gig website such as Fiverr.
Apply for a Federal Employer Id Number (FEIN)
If you are setup as a Corporation, LLC or Partnership (or a sole proprietorship with employees), apply for a Federal Employer Identification Number (FEIN) from the IRS. This is free on their website. This can be setup for you, if you choose a service such as Swyft Filing.
TIP: A FEIN with the IRS. It will be necessary to open a bank account or process payroll.
Open the Company Bank Account
Select a bank and open the company bank account.
TIP: Contact the bank prior to opening the account to see what their specific requirements are to open a business checking account
Lease Office, Warehouse or Retail Space
Depending on your type of business (retail, office or warehouse), arrange for office space to be leased.
TIP: Contacting a commercial realtor in your area can be helpful.
Obtain Licenses and Permits
Federal Permits
Depending on the type of business you are in, you may need a Federal license or permit.
However, you should contact the responsible Federal agency to determine the requirements for doing business:
TIP: Most businesses do NOT require a Federal license or permit.
State Licenses
Some occupations and professions require a State license or permit. If you are engaged in one of the following professions, you should contact the responsible state agency to determine the requirements for your business:
building contractors
banks
insurance carriers
physicians
appraisers
accountants
barbers
real estate agents
auctioneers
private investigators
private security
guards
funeral directors
bill collectors
cosmetologists
State Licenses and Permits based on products sold
Some state licensing requirements are based on the product sold. Contact your state licensing authorities to determine the licensing requirements of your business.
TIP: Most people engaged in the types of business that require a special State License or Permit are already aware of the requirements (i.e. an accountant is familiar with the licensing requirements for accountants)
Apply for a Sales Tax Permit
If your company sells physical products within the state where it does business, you may have to collect and pay sales tax. This is usually accomplished by obtaining a State Seller’s Permit or Resale Permit.
TIP: many service businesses that do not sell a physical, tangible product are NOT required to collect sales tax, ask the State taxation agency for details/clarification.
Apply for a Business License
Most Cities or Counties require you to obtain a business license, even if you operate a home-based business. This is a license granting the company the authority to do business in that city/county.
TIP: Many cities allow you to file you business license online
Hire Employees (if applicable)
If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both).
Set up an Accounting System
Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying. Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years.
TIP: Quickbooks Online Software is the most user friendly and we have had great success with Easie Bookkeeping.
Obtain Business Insurance
There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection.
TIP: We recommend Hiscox Insurance, they have cost effective monthly insurance rates for any small business.
Streamline your Procedures
Prepare the business as if someone needed to take it over and run it for you. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business.
TIP: A Company like Easie Bookkeeping can help with the financial aspect of this and creating a manual for each aspect of your business will be beneficial. Make things as virtual as possible.
Brand your Business
Order business cards, letterhead and promotional materials for your business. A professionally created logo can make your business look professional and established.
TIP: Hire a subcontractor like Easie Graphics for branding and logo creation.
Promote and Advertise your Business
Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer.
TIP: Instagram and Facebook is a cost effective way of advertising for small business start-up companies