I’m going to teach you how to start a business in 6 easy steps.
As a Certified Public Accountant and business owner, I am happy to summarize and share this knowledge with you free of charge because I wish that I had this guidance when I was starting my own business many years ago! I hope this information helps you in your journey as an entrepreneur and business owner.
Professionals charge $500 to $1,000 for this information on how to form your business, but I feel like it shouldn’t be that way, especially when you are on a budget and that money could be better used for your business.
Here are the steps on how to start a business:
1. Choose your company’s name
- You will need this for the legal formation of your company.
- Don’t let this step hold up your progress on the formation of your business because you can always legally change your company’s name in the future.
- You can always operate under an “assumed name” as well.
2. Create your company with your Secretary of State
- The process of the company actually being created and legally recognized is done at the state-level.
- You create your company at the state-level with the Secretary of State.
- You will go to your state’s Secretary of State website and form your business.
- You need to select the type of entity you want your company to be, which will most likely be an LLC or a corporation. Going over which entity is best for you is not the focus of this discussion, but you can check out our other articles that will help you with your entity selection.
- After you form your business, your Secretary of State will provide you with your Articles of Formation or Articles of Organization and you are now legally up and running.
- The fee to create your business with your Secretary of State depends on your state, however, it’s usually in the range of $50 to $200. Third parties that help you with this service will make you pay for the $50 to $200 Secretary of State fee and then they charge you an additional $100 to $1,000 service fee for helping you complete this step of the process. We hope this article helps you save that money so that you can use it for more productive things!
3. Apply for your Employer Identification Number (EIN)
- The Employer Identification Number (EIN) is like the social security number of your business, it’s your company’s identifying number.
- Getting your company’s EIN is free, quick, and easy with the Internal Revenue Service (IRS)
- You can apply for your EIN for free on the IRS website. They just ask you basic questions and once you complete the questionnaire, they immediately issue you your EIN at the end of the questionnaire. You can use this link or search on Google “Apply for EIN IRS”.
4. Open a bank account for your company
- After you completed Steps #2 and #3, you can now go and open up your company’s business checking account because you now have your Articles of Formation or Organization and your Employer Identification Number (EIN).
- You want to open up your business bank account as soon as possible because you want to keep your business and personal expenses separate for legal reasons and to also stay organized.
- You should also get a company debit card or credit card in order to help keep your business and personal expenses separated.
5. Keep track of your company’s sales and expenses
- Keeping track of your company’s sales and expenses is called bookkeeping and it is so important. You need to stay organized!
- You can choose to utilize bookkeeping software, such as QuickBooks. Or you can use a simple spreadsheet if that will be sufficient for you. This is your preference and you should choose the solution that works best for you in terms of saving time and staying organized.
6. File your company’s taxes
- Depending on the entity of your business, you may need to file a separate business tax return or you may be able to report your business activity on your personal income tax return. It just depends on your entity.
- Please see our free information regarding taxes for your entity type, which include S-Corporations, Single-Member LLCs, Sole Proprietors, Partnerships, and C-Corporations.
I hope you find this free information helpful.
If you know anyone else or any group that would find this free information helpful, if you could please share this information, we would all appreciate it.
Thank you so much and I wish you a prosperous journey for you and your business.
The actions listed above will be applicable and universal to all businesses. However, some businesses may need to accomplish additional steps such as setting up a sales tax account if you plan on selling tangible goods. If you plan on operating at a large profit immediately, then you may need to take into consideration sending-in estimated tax payments as well.
These are some examples of additional actions that may be necessary in your specific situation.
Please check out our free informational library to assist you in answering these questions.
Once again, thank you for supporting our website at ClearValueFinance.com and if you found this information helpful, please be sure to share it with your social media groups and circles because all of us would greatly appreciate the circulation of free and helpful knowledge.
Thank you so much and I wish you the best on your journey as an entrepreneur!