Have you dreamed of opening your own business, but put it off because of the long and difficult process you expect to face to get things up and running? You might be surprised to know that you can actually launch a business in just a few hours, often from the comfort of your own home at a relatively low cost. Here are five simple steps to get your business started today.
Step 1: Choose a business name
“Your name should emphasize what you want your business to be about,” said Michael Kern, a CPA and founder of Talent Financial, a personal finance and small business consulting firm. You’ll also want to make sure your name is creative and unique in your industry, since there’s nothing worse than getting confused with a competitor, said business attorney Andrea Wheeler, owner of Wheeler Legal PLLC in Melbourne, Fla. In fact, many states don’t allow you to have the same name as another business registered in that state.
To check if your intended business name is already in use, you can start with a simple Google search. You can also typically find a business name database on your state’s Secretary of State website; simply type your potential name into a search and see if it’s available.
Step 2: Determine your business structure
Once you’ve selected a name for your business, it’s time to choose a business structure. “There are different legal and tax implications associated with each type,” said Wheeler. “Choose the one that’s appropriate for you and the type of business you’re starting.”
A sole proprietorship is the easiest and most basic business structure. In fact, you can already consider yourself one if you conduct business activities but don’t register as any other kind of business. The downside: Because your business isn’t considered a separate legal entity, you’ll be personally responsible for all debts and obligations.
[See more on choosing the right business structure.]
If you’re looking for personal asset protection, a limited liability company (LLC) or a corporation are good choices, said Wheeler. Under these types of formal legal entities, you won’t be held personally responsible for the business’s debts and liabilities, so if you get sued, things like your car and house won’t be at risk.
Your name should emphasize what you want your business to be about.
Michael Kern, CPA and founder of Talent Financial
Step 3: Register with the state
Although sole proprietorships typically don’t have to register with the state, legal entities like LLCs and corporations usually do. Most states require you to register with the Secretary of State’s office, a business bureau, or a business agency, and you can often complete the paperwork online and pay with a credit card. While the registration process can be completed within a couple of hours, you might not receive approval for a few business days up to a few weeks.
Step 4: Get an EIN
An employer identification number (EIN) is a nine-digit number assigned by the IRS that’s used to identify taxpayers who are required to file various business tax returns.
“An EIN is like a Social Security number for businesses,” said Wheeler. “You can obtain it quickly online for free through the IRS website.”
While it’s mandatory to have an EIN if you have employees, you might still want one if you work solo to help prevent identity theft. This way you don’t have to give out your Social Security number to other businesses when they ask for your W-9 form, which is requested when you’re hired as an independent contractor, said Kern.
[See more on how to obtain an EIN.]
Step 5: Select your tools
While it might take a bit of time to figure out all of the tools you’ll need for your business, you can certainly choose (or at least research) a few of the most essential ones in the first few hours of getting your business started. “Think about accounting software, business email, password managers, website builders and payroll software,” said Kern.
It’s also a good idea to register a domain name for your business’s website. You can do this for a fee through sites such as GoDaddy and Namecheap.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
Event Recap: Managing Your Team
Watch the replay from our latest Roadmap for Rebuilding event, where the panel offers the strategies you need to build a cohesive and productive team, even in this new normal of remote work.
Published May 29, 2019