Having your own business is a hope that many have but few actually pursue. For many, the issue is a matter of opportunity. But for many others, it is simply a lack of impetus and knowledge. Though you may think that the endeavor is difficult, the truth is that the hardest part of starting a small business is knowing what to do. Here are four straightforward steps that will set you on the right course.
1. Apply for your Employer Identification Number (EIN). This number is provided via the IRS website and will be used to identify your organization. Though companies without employees or who choose to establish as sole proprietorships can choose to use their Social Security Number for tax identification purposes, choosing an EIN will help keep that information private.
2. Fill out all of the necessary forms at your local government office. All of this may be able to be filled out in one easy visit.
- If you are going to operate your business under a name other than your own, you should check to see whether your local government requires that your business name be registered.
- Apply for a business license if your municipality requires it.
- Fill out a business personal-property tax form for all of the personal property you’ll be using to operate your business.
- If you need one, get a certificate of resale to allow you to collect state sales tax on products that you sell. This certificate is also available online on your state’s tax website.
- Find out what other permits and forms are required by your municipality and take care of those.
3. Open a separate bank account using your business name and EIN to avoid mixing your personal funds and your business funds.
4. Create a spreadsheet to track money going in and out. If your business requires something more complicated, invest in accounting software. There are plenty of good ones available.
These steps represent the basics, but if you follow them it will motivate you to move forward and continue with the more nuanced requirements. For help with choosing the type of business entity you should organize under, as well as other important points, contact our office to speak with one of our small business attorneys.