3. Choose a business structure
There's no one right business structure for every small business. You can choose to operate as a sole-proprietor, a partnership, an LLC, or a corporation. Each comes with benefits and drawbacks, so take the time to research what's best for your business. It may be a good idea to consult with a CPA or an attorney to help you make the best decision.
4. Choose your business name
Take your time coming up with a good name for your business. There's not one formula to create a good name, but there are a few things you want to consider. For example, you may want a name that clearly conveys the benefit your company delivers. In contrast, a name that's too generic or vague won't help customers recognize what you do. You'll also want to find a name that is easy to remember and isn't too difficult to say out loud.
Once you settle on a name, take these steps to register it:
- Register your business name with your state. You can do this when you register your business itself with your state.
- If possible, register your business name with the U.S. Patent and Trademark Office.6 This may prevent other businesses in the same industry from using the name. But note that not every name can be trademarked. You won't be able to trademark names that are too generic or that are too similar to another trademarked name in your industry. For more information and examples, you'll want to read this article.7
- Register a domain name for your business. This will ensure you can create a website with the domain name that is best for your business, making it easier for people to find you online.
5. Get your tax IDs
Once you've registered your business name, you should apply for your tax IDs. You'll likely want to register for a federal and state Employer Identification Number (EIN). Think of the EIN as a Social Security number for your business. You'll use it to do things like open up a business checking account, apply for business licenses and permits, and hire employees.
6. Register your business
While many small businesses don't need to register anything with the federal government (besides applying for an EIN number), you will likely need to register in the state you do business in. State registration rules can be tricky, so consult with a lawyer or an accountant to see if you need to register in other states in addition to your home state.
As part of the registration process, you'll need to name a registered agent – someone who receives official papers and legal documents for you. You could name yourself as the registered agent, but most business owners choose to hire a registered agent service.9 As an extra service they may also be able to help you file the necessary registration documents with your state.
7. Apply for licenses and permits
There are a number of licenses and permits you may be required to apply for, depending on where your business is located and what type of business it is. If your business is regulated by a federal agency (like agriculture or mining), you'll need to apply for a permit with that federal agency.
You may also be required to apply for state and local permits depending on where you live and what type of business you run. Visit your state, county, and city websites to see what licenses and permits you're required to have.
8. Open a business checking account
It's important to make sure you don't mix your personal and business finances together. One of the best ways to keep things separate is by opening up a business checking account. By opting for a business account, you'll receive limited personal liability protection and you'll look more professional to your customers and your vendors. Explore different options for business checking accounts to find the one that best suits your needs.
9. Set up your accounting system
Finances can be a source of stress for small businesses, especially at the beginning. Ease this stress by getting your accounting system in place early. If you choose to go the do-it-yourself route, research bookkeeping software that's easy to use.
If you know that you won't have time to keep up with the books and the rest of the business, contract with an accountant or bookkeeper to get things set up. Making sure that you have accurate books means you can make better financial decisions, quickly.
10. Get business insurance
Before you open your doors for business, there's one last thing you'll want to get out of the way: insurance. Business insurance can help make sure that your personal and business assets are protected.
Some businesses are required to have insurance and others will want to have it, just in case. There are many different types of insurances businesses should seriously consider getting — even if they are not strictly mandatory. It's a good idea to find a reputable commercial insurance agent and shop around for the best price on a policy.
While it may take a bit of extra legwork, following these 10 steps will help you get your business started on the right foot.
Calculate loan payments, project cash flow, consolidate debt, and more.