Doing it Right the First Time
What does it take to start a business? Folks who have been there know, it often doesn’t take much, but starting things out the right way can make all the difference between success and failure. So, what does it take to start a business? What follows is very likely not an exhaustive list, but will hopefully prove helpful to anyone thinking of doing something new.
- Business Name – This may not be the first thing you think of (the business idea or the problem you will solve is likely the first thing) but soon after you start brainstorming, you’re going to want to come up with a name, and to make sure that name is available. Searches of your state’s business registrations and the US Patent and Trademark Office records can help narrow the field of possible names.
- Business Owners – Who is going to own the company? This doesn’t have to be everyone who will be working in the company, and some careful thought should go into planning the ownership on the front end to avoid problems down the road.
- Entity Type – Will your business exist as a sole proprietorship, a partnership or some type of formal entity? (Corporations or limited liability companies are the most common formal entites, though other types exist.) Accountants and attorneys can be vital resources when making this decision.
- Organizational Documents – These will depend on how many owners the business has and what type of entity is chosen, but may include articles of organization/incorporation, bylaws, operating, member control and contribution agreements along with records of action to document all the start-up activities
- Tax Registrations – Being classified incorrectly for tax purposes can be a costly mistake. This is also an issue for your accountant and attorney to discuss. Knowing whether the work you do is subject to sales tax and whether other state tax registrations are necessary is another important step.
- Insurance – Your business will hopefully become the largest asset you own. Taking the time to protect it with the necessary insurance (and to verify with an insurance professional what exactly you need to cover) is a very important start-up step.
- Everything Else – These are just the very beginning steps for setting up a business. However, taking the time to make sure these initial steps are complete will save lots of time and money as your business turns into the next big thing!