       
|
|
Make
Your Business Official - First 10 Things To Do
By
Janet Kramer, CPA |
Okay, you’re
ready to launch your own small business, or maybe you’ve already
opened, “unofficially.” You have a fantastic idea, you
know you can make money off it, maybe you’ve even completed
a few sales “under the table” or practiced your trade
or service for free. Now’s the time to take the next steps,
to become official. Here are the first ten things you can do to
get off to a good, clean start.
1).
Choose a legal entity
Before you can do anything else, you’ll need to decide the
legal structure for your business. Will you be a sole proprietor,
partnership, or corporation? This determination usually boils down
to questions of legal protections and tax advantages. Don’t
make the choice impulsively. Check with a lawyer and/or accountant
before making this decision.
2).
Name your business
Choose a name that fits your business, one that’s not being
used by another business. As tempting as it might be to select something
distinctive, be careful. Don’t opt for a name that’s
too cute or complex, and make sure people can pronounce and spell
it correctly. Avoid naming your company after a product, service
or location, unless you’re positive these will never change.
Ask Boston Chicken, later Boston Market, about the high cost of
naming blunders.
3).
Register your business
Check with your local and state governments to see what’s
required of you to properly register your business. For example,
in the state of Colorado, you’ll head to the Secretary of
State’s to file papers.
4).
Get in compliance
Make sure you’re in compliance with all of the business licenses,
permits, and regulations required in the area in which you’ll
be conducting business. The most common requirement is sales tax
collection. If you plan to sell or resell any type of tangible product,
you’ll need to set up an account to collect and remit sales
tax. In Colorado, you do this at the Colorado Department of Revenue.
5).
Choose and reserve a domain name
Even if a website isn’t in your immediate plans and might
never be, reserve a URL anyway. Who knows what impact the Internet
might have in another five years, and by the time you discover the
power of it, all the good names will be gone. You can search for
available names (including combinations of words) at www.nameboy.com.
Once you’ve selected a domain name, you can register the URL
at www.godaddy.com or www.register.com for less than ten dollars.
When choosing a name, .com remains the gold standard. Whatever you
do, however, don’t choose .net or .org if you’re not
a network provider or organization, as those designations, right
off the bat, will mislead your potential customers or clients.
6).
Apply for an EIN (Employee Identification Number)
If you’re a corporation or any type of legal entity that hires
employees, securing an EIN from the federal government is a requirement.
While an EIN isn’t necessary for one-person businesses with
no employees, it’s still a good idea to request and begin
to use one anyway. Otherwise, everything in your business will be
tracked through your own social security number, which means you’ll
be giving that number out constantly.
7).
Open a business checking account
Take your official business registration papers and open a business
checking account at your local bank. Choose a branch that’s
close by if you’ll be making frequent deposits, and inquire
about lines of credit, even if you have no intention of borrowing
money.
8).
Set up bookkeeping
From the get-go, you’ll need a chart of accounts, balance
sheet, and profit and loss statement. If you don’t know how
to produce these or you’d prefer to devote your energies to
growing your business not tearing out your hair, hire a bookkeeper.
If this seems too overwhelming, at the very least, grab a shoe box
from the closet and throw in all of your business-related receipts
and invoices.
9).
Purchase a general liability policy
Call your insurance agent (whoever insures your home or auto) for
a quote on a commercial policy for your business. The cost of insurance
will depend on the type of business, number of employees and annual
sales.
10).
Write a business plan
Take your grand ideas and dreams and apply the structure of pricing,
marketing, and cash flow to them. The business plan doesn’t
have to be elaborate–one-page might do–but the simple
act of articulating your vision will drastically increase your chances
for success. For an easy-to-use, fill-in-the-blank business plan,
go to www.SimpleBizPlanning.com.
©2007
Simple Biz Planning, Inc.
|
