Starting a company can be exciting, where everything seems full of potential and purpose.
But amidst the excitement, navigating the logistics of launching a business can be daunting for the first-time entrepreneur.
Starting a business doesn’t need to be scary. Here are the basic steps to address the logistics and make sure that your new business is legit:
1. Check That Your Business Name Is Available
Before investing too much time and money in your branding, you should make sure that your proposed organization name is legally available; in other words, it won’t conflict with the name of an already existing business. By checking availability upfront, you’ll have peace of mind knowing that you won’t be ordered to abandon your organization name a year from now because of a trademark dispute.
There are a couple of ways to check the availability. First, you can perform a free trademark search to ensure that no one already has a trademark for it. If it’s clear, your next step is to conduct a comprehensive name search to see if someone is using your name in your state or county.
2. Pick A Legal Structure
Every company has a business structure. For example, some are sole proprietorships, partnerships, Limited Liability Companies (LLC) and Corporations. If you never formally apply for a structure with the state, it is a sole proprietor (single owner) or general partnership (multiple owners) by default. These are the most accessible business structures to manage but don’t offer liability protection for the owner and their assets.
Many small companies opt to form an LLC, as the structure offers liability protection in case your business can’t pay its bills or defaults on a contract. It also entails fewer administrative formalities than a corporation. You can always talk with a CPA or small business advisor to determine the proper structure for your situation. New Jersey business lawyers can help to know the process.
3. Register Your Business Name
You’ll need to register your company name with the state, so everyone knows who’s behind it. There are a couple of different ways to do this. This step automatically registers your name with the state if you are forming an LLC or corporation. However, if you choose to stay as a sole proprietorship or general partnership, you’ll need to register your business name by filing a Doing Business As (DBA).
Registering your business name ensures that you can legally operate your business under that name in the state. It also provides that no one else can use your business name in your state.
4. Get A Federal ID Tax Number
A Tax ID number (also called an EIN, Employer Identification Number) is like a social security number for your company. It’s how the IRS tracks your company’s activities. You can apply for a Tax ID number online with the IRS (it’s free). Any business with employees is required to have a Tax ID number. But even if you’re a sole proprietor, applying for a number for your business is wise. This way, you won’t have to use your social security number for business matters.
5. Open A Business Bank Account
Once registered as an LLC, Corporation, or DBA and your Tax ID number from the IRS, you can open a business bank account. This will let you accept payments made to your business name and help keep your business and personal finances separated.
6. Get Your Local Permits
Depending on your type of business, you may need to get local business licenses or permits from your state or county. For example, you may need a sales tax license, health department permit, zoning permit, or professional license. You can contact your local office or check out a site to learn more about the specific licensing requirements for your business type and location.
7. Get Familiar With Employer Laws And Responsibilities
There are quite a few legal obligations that go along with hiring employees for your organization, including payroll and tax withholding, workers’ comp, OSHA regulations, wage/hour requirements, and health insurance. You’ll need to ensure you understand your obligations before interviewing potential hires. A good starting point is the Small Business Administration (SBA) website.
Now that you’ve worked through the legalities of starting your company, it’s time to spread the word. Many small companies and independent contractors choose to market themselves by creating a website or bolstering their social media presence.
First, start by identifying who your target market is and how you might be able to reach them. Then, consider your budget – can you afford to attend conferences to network with peers, or do you need more cost-effective options?
For many independent contractors, a website is the gold standard and will allow the company or independent contractor to feature their biography, core competencies, and thought leadership. LinkedIn, Instagram, and Facebook can also be excellent vehicles for building your brand. These are all cost-effective options with great reach but be sure they align with the marketing budget you have identified for your company.
When starting a small organization, there are many details, reports, legalities, and forms to work through to remain compliant and become profitable. Professionals has extensive experience assisting independent contractors in starting their businesses and can provide support and guidance to ensure your organization is set up correctly.
Can You Start a Company Without Registering It?
You need first to register your company name to use that name for your business. If you don’t have it registered with the secretary of state, you can only conduct under your name. Before filing for your business name, ensure it’s not currently used by someone else. Then, register the name online through the IRS.
The bottom line is that when it’s time to turn your dreams into reality and become your boss, don’t overlook your legal obligations. Just follow these few simple steps, and your business’s legal foundation will be established for years to come.