1.) Plan Your Company
Planning your company is a key step in forming it. What will your business do? Who will it help? Will you have employees? What is your competitive advantage? What will your business name be? What areas of town will you service? Think hard about what you want your business to look like but don’t overthink this step. They say taking on too much information will lead to paralysis by analysis as you have so much to think about and so much to plan.
2.) File For An LLC With Your State
All states require a for-profit business to file Articles Of Organization which allows you to start an LLC. Having an LLC will allow you to separate your personal and business interests. Just in case someone sues you, your LLC can protect you as long as you practice good business and money methods.
When I first started I was scared of doing paperwork like this but trust me, it is actually super easy. Most states allow you to file your paperwork online within 5-10 minutes. All you need is some basic information like the name of the business, business location, business phone number, and a Registered Agent.
A registered Agent is a person or entity you have appointed to handle business, tax, and government paperwork. This can be you, an attorney, another business, or a tax preparer.
To make this simple, do a quick Google search for “(Your State) Secretary of State”.
3.) File For Your Federal EIN
EIN Stands for Employer Identification Number. This number allows you to file your taxes with the Federal Government.
An EIN can be acquired by going to the irs.gov website, looking under the File tab, and finding the “Apply For An Employer ID Number”. Make sure you are actually on the IRS.gov website. There are scams going around for fake government websites.
To get your EIN you will follow the prompts and give the same information you gave to your state for your Articles Of Organization.
4.) Open Your Business Checking Account
This step is another crucial one to separate your personal and business finances. Now that you have a legit business, your finances need to be separated from your personal at all times. Mixing your funds can end you up in hot water not to mention it will pierce the corporate veil, negating any protective abilities of your LLC.
I typically like walking into my local bank branches and opening up an account. This will allow you to make connections with your local bankers. My first banker that set up my account did a lot to make sure we were taken care of.
I could call her up if there was an issue on our account or I needed help with a transaction and she would always make it happen quickly. These business relationships are invaluable especially if you are new to business.
However, If you would like to set up an online bank you can always use an online service like Chase or Capital One. These can typically be sent up within minutes.
To set up an account with a bank you will need some documentation such as ID, EIN, Articles Of Organization, ect. Your state may require additional documentation. If you are in question it is always a good idea to reach out to your prospective bank to see exactly what they need to set your account up.
5.) Obtain Permits Licensing
Some professions need applicable licensing to legally do work in the state. Specialties like plumbing, electrical, and mechanical all will need special permits and licensing. Talk to your local state office to see exactly what licenses you need before starting.
