This is the fourth installment in our small business resource compilation. We just secured adequate funding for our business, so the next step is to get it going. While this is not the most glamorous aspect of running a company, it is something that is extremely important to do right the first time. This is where your initial involvement with local, state, and federal governments begin. This is the time you need to have an attorney and CPA that you can utilize and consult with to make all of the appropriate decisions. These will include the mundane from selecting the proper business structure, to opening a company checking account. While we’re mentioning it, even if you are a sole proprietor, never ever comingle your personal accounts with your business accounts. That will begin nightmare number one! Let’s look at some of the key components to launching your business.
Business Structure: Perhaps the most important, the way you set up your company has everything to do with how much taxes you will pay, to more importantly what kind of personal liability you will be exposed to. A popular form of business today is the LLC, which gives your personal assets protection in case you are sued or file for bankruptcy, while allowing you to avoid corporate taxation and have income from the business flow to your personal taxes. If you are unsure as to where to begin, take a look at the major forms of businesses listed, here. And again, this is a decision to absolutely discuss with your accountant.
Business Name: There are two things of primary importance about a business name. First, check with your state website to see if the name is available. If so, you also want to make sure that the domain name is available for your website. If not, try to find some variation of the business name, or use a different suffix like .net or .news, etc. Any web hosting site like GoDaddy or Bluehost will let you check for free in a matter of minutes.
Federal Tax ID and Bank Account: Similar to a social security number, you will need to get an EIN, or Employer Identification Number. You can apply, here. There isn’t really a great difference in opening a business banking account than that of an individual account. Often, new businesses will have a personal relationship with a bank through their personal accounts. As such, contacting your current banker is a good place to start.
Business Insurance: You can’t underestimate how important business insurance is. As with your personal insurance, business insurance can protect you from hazards, natural disasters, lawsuits and more. The most important thing is getting the right coverage in the right amounts for your particular company. Find the best representation you can, whether it be through a national brand such as USAA, or through a local affiliate that comes highly recommended by your chamber of commerce or better business bureau.
With all of the above completed correctly, you are ready to fly!