Congratulations! You have a great business idea and the funding all set for your new startup. Now what? Here is a general checklist for you to follow so opening the doors to your Company can be a quick and easy process.
There are basically four types of business structures from which to choose. As with any business decision, consult with your Attorney or Accounting professional to discuss what is best for your situation.
A business that is not separate from its owner, merely a different name that the business owner operates under. The owner is personally liable for the company and its debt; all income is added on the owner(s) personal tax returns (pass-through taxation). If there is more than 1 owner, then the business is classified as a “General Partnership”.
A corporation is a separate legal entity that can protect owners from personal liability and company debt. It can buy real estate, enter into contracts, sue and be sued separately from its owners. Money can be raised easier via the sale of stock; its ownership can be transferred by stock transfer; the business operates perpetually; and you are able to deduct many business expenses, healthcare programs, etc. that other legal entities are not. Income is reported completely separate via a tax return for the corporation.
A simple Business Plan can be no more than one page in length and is probably more than enough for most small businesses. A simple business plan can function throughout the life of your business and most certainly during startup.
A suggested resource available on Amazon.com is “The One Page Business Strategy”
If your business is a Corporation, LLC or Partnership (or a sole proprietorship with employees), apply for a Federal Employer Identification Number (FEIN) from the IRS. A FEIN is necessary to open a bank account or process payroll.
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Contact and open a company bank account that best suits your business needs.
Contact a commercial real estate broker if need be and lease space, furniture and equipment best suited to your business needs.
You may need a Federal license or permit to operate your business.
if your type of business is listed below, you should contact the responsible Federal agency to determine the requirements for opening your doors:
Some occupations and professions require State licensing or permits. Laws vary from State to State, however, if you are engaged in one of the following professions, you should contact the responsible state agency to determine business requirements:
Some state licensing requirements are based on the product sold. Contact your state authorities to determine the licensing requirements of your business. For example, most states require special licenses to sell:
If your company sells physical products within the state where it does business, you may have to collect and pay sales tax. This is usually accomplished by obtaining a State Seller’s Permit or Resale Permit. Ask the State taxation agency for details.
Most Cities or Counties require you to obtain a business license, even if you operate a home-based business. This is a license granting the company the authority to do business in that city/county.
If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both).
Setup your Accounting and Record-keeping system and learn about your tax obligations. Consult with an Accounting Professional to discuss your specific needs.
Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years.
There are many types of business insurance but they are usually consolidated as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles.
Get organized! Have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Make the operational aspect of the business as efficient as possible so you can concentrate on growing your business.
Order business cards, collateral and promotional materials for your business. A professionally created logo can make your business look professional and established.
Now that you’ve set-up the company for success, create a marketing plan for your products and services that targets your ideal customer.
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