So, you’ve done all of the research and you’re ready to start your own business. Thing is….you do not know where in the hell to start! There are several steps needed to ensure that your business is set up legally for smooth, efficient and profitable operating. With so much information out there, it can be overwhelming. I know that when I started researching, Google was my first friend and it’s STILL a daily start point for all my research and crazy questions but make no mistake, Google can only give you so much. I’ve made many mistakes along the way and I’m certain there are many more on the horizon. My hope is that this information can help just one person avoid some of the mistakes that I’ve made by sharing my knowledge. Here is a step by step guide on how you should set your business up for success from DAY ONE. This list can be intimidating and costly but start from the top and work your way down to completion. Celebrate your success along the way and don’t skip a step. Work this in order for ease and set goals for yourself on when each step needs to be completed…no more excuses, it’s time to get your ass to work!
State Registration:
Decide how you want your business structured. You can access information regarding business structures on the website of the Secretary of your state. I highly recommend seeking the advice of a qualified accountant and an attorney at this time. Getting the proper advice from these professionals right in the beginning saves time and money and in my opinion, having these two pros on your team early on is extremely important in your business’ success. They will be able to help guide you on the best structure specific for your business with regard to tax liabilities and protection of personal assets, etc. Once you decide which structure is best for you, apply for your business license with the state. Most websites will allow you to perform a preliminary search to determine if the desired name of your business is already in use. Once you submit the application and pay the required fees to the state, your state will conduct a more detailed search for you. You will be notified by preferred method of contact if you were able to secure your desired name with a registration. Concurrently, I also recommend checking the Trademark Database of the United States Patent and Trademark Office to determine if your desired name has been trademarked as well.
https://www.uspto.gov/trademarks-application-process/search-trademark-database
I believe in positioning brands for the future so looking ahead at trademarks at this point is a really smart move. Checking the trademark status of your desired brand name will let you know if the name has already been trademarked. At this time, you will have to make a determination of whether to change or keep the name. Again, having the counsel of a trademark attorney is highly advisable to navigate this decision-making process.
Federal Registration:
Once your business has been registered with your state, you must apply for an Employee Identification Number, EIN, for your business. This nine digit number is issued by the IRS and is essentially the tax ID of your business and very important to obtain. You will need to obtain this number prior to opening your bank account so grab it now! Please note, EINs may not be required in all states or needed for certain business structures, so check your local laws.
Apply for Permits/Licenses:
Apply for applicable permits and licenses needed to run your business. For instance, if you intend to sell products, your state may require you to procure a sales and use permit. Check with state, local and federal government on proper requirements.
Open Business Banking Accounts:
It is imperative to keep your personal and business finances separate from the very beginning. Open a business checking & savings account in your business name. Make sure that you have proper documentation (articles of formation, EIN, IDs, etc.) with you. It may also be helpful to call the bank or visit their website to find out what documents you will need to open the business account. This of course, saves time and frustration.
Another thing, Do NOT accept any offers for credit cards at this time. When you first open a business, you do not have business credit. Banks will offer “business” credit cards based on YOUR personal credit profile, which is a big no-no in my opinion. You do not want to be the personal guarantor of your business in this way. This will immediately start to intertwine your personal credit with your “business name” and can be very difficult to separate once done. Another consideration… if the business runs into financial trouble and you are the personal guarantor on this “business” credit card, guess who they’re coming after for payment, boo? YOU because it was your credit profile used to secure the card in the first place. Trust me on this one, you ALWAYS want to have your business and personal finances separate & credit is no different. Politely decline that offer and keep it moving. Building business credit is trickier and its process is more nuanced but there will be an opportunity to build business credit later. I’ll cover that soon!
Purchase Business Insurance:
I know, I know….but just like every other damn insurance policy we pay, you NEED it sis. Just do it! Find out what’s required in your industry and get in touch with a qualified insurance professional to help you determine what’s best for you and your situation. You need to protect yourself and your assets so this is definitely a must-do! Remember, Google is your friend and ask around to find out who your friends or other industry professionals are using. Word of mouth is a great way to find quality professionals & products and honestly, it’s my favorite way to get help when I need it so I’ve listed a few agents below that I personally know that does outstanding work.
Secure Your Brand!:
Now, you’ve put all of this time and MONEY into getting your business set up the RIGHT way. It’s time to grab your domain for your website, email address and phone number. Search your domain ONLY when you are ready to pay for it THAT day! Your search activity is tracked, not in the Bill Gates/5G type of way but in the “you searched this too many times way”. Once you’ve searched your domain too many times, this sends an alert that this domain name could possibly become a “popular” domain name and therefore, the price is raised or someone purchases the domain & then, sells it to you through a broker for a RIDICULOUS amount of money, plus the broker charges a fee as well! See why it’s important to search and pay on the same day?! I have seen a $11.00 domain be purchased & sold through a broker for $1,500!!.
This is also is a great time to grab your business email address & phone number. Sis, this is not the time for gmail or yahoo addresses. Obtaining a web address that is tied to your website is professional and it makes your business appear more credible. Host service companies such as Go-Daddy offers, business phone numbers & 1-800 numbers, which connects through an app on your phone. This is the option I am currently using and it’s been really helpful for me to be able to stop carrying two phones and I have not had any issues with it so far! In my opinion, this is a cheap option, approximately $19 a month and very user friendly! The service is called “SmartLine.” I especially love this service because it allows you to set business hours and do not disturb times and you’re also able to text. it’s been a lifesaver for me and as soon as I am done with my current phone contract, I am done carrying two phones.
https://www.godaddy.com/smartline
Hire a qualified trademark attorney to assist you in securing your brand by trademarking your business. Trademarks gives you exclusive rights to your business name across the nation. You can trademark your business name, business logo & product names to name a few. Think about all of the work that you’ve put into your business….why not protect it? Building a business and not protecting it is the equivalent of building a house on land that you do not own… it just doesn’t make sense!
D&B:
This is a BONUS to-do list item but it will transition into what needs to be your next to-do list, start establishing business credit. The first thing that you need to start establishing business credit it to obtain a Dun & Bradstreet Number, D & B. This is the number assigned to your business for business credit reporting services. This number is the social security number of your business and it will be used to report your payment activity to your vendors and creditors. This is extremely important for building business credit just as you’d build personal credit. Business credit is very important for growth of your business and building business credit should be a priority of yours early in your business. Do not purchase any memberships or “watch services”, go there, apply for a D & B number and bounce!
https://www.dnb.com/duns-number/get-a-duns.html
Remember, sis! If the state that you’re operating a “business” in does not know that you’re running a business & the federal government doesn’t know, either… then, you’re NOT running a LEGAL business and when they find out that you’ve been a cash only, out of the trunk of your car business, it will not be good for you! Set your business up for success from the very first step. Opening a business the CORRECT way is not a cheap, easy, nor stress-free endeavor. There is so much money spent to get it up and running before you make a dime but when it is done correctly, your shit will be legit & ironclad. You’ll never have have that looming over you. So many “business” owners were left out of the recent federal government stimulus package because they did not have their businesses set up correctly. Their finances & financials were not in order and so many were not able to qualify simply because their business was not legitimate. I was so frustrated by this because there were so many small business owners that could have benefitted from this help & even more disgusted when I read that nearly 50% of black owned businesses will not survive the impact of COVID, See my video rant about this here.
I hope that you have gained the knowledge and are finally ready to step out on faith and get to work! Start with step one and work your way down. The worst thing that will happen is that you’ll regret not starting the business, sis! Go for it and do it RIGHT the first time!
REFERENCES:
Starting A Business: https://www.irs.gov/businesses/small-businesses-self-employed/starting-a-business
Do you need an EIN? https://www.irs.gov/businesses/small-businesses-self-employed/do-you-need-an-ein
REFERRALS:
(Accountant): Bianca Carey with Carey Business Solutions: https://careybusinessllc.com
(Business Insurance Agent): Johnte’ Archer with J. Archer Insurance Group: https://www.archerinsgroup.com/
(Business Insurance Agent): Tristen Sutton with State Farm: tristen-sutton-9ky0863r5ak
(Trademark Attorney): Leonard Searcy with Shook, Hardy & Bacon: https://www.shb.com/professionals/s/searcy-leonard