[Updated February 2019]
Starting a new business is exciting, but it can be a bit intimidating too. But once you make the decision to hang out your shingle, there are a few things you need to do right away.
1. Decide on a name for your business. There may be a chance that your business name won’t be available as a URL, but you need a name for your legal documents and business license, so choose one that will work for you. We first recommend coming up with a killer business name, then trying to find a domain name that matches or is similar to your company’s name.
2. Get an Employee Identification Number (EIN). This is the federal tax number you’ll use for your business. You’ll need an EIN if you have employees, or form a corporation or partnership. Even if you don’t need an EIN for these reasons, it’s a good idea to have one to use instead of your personal social security number. And it’s free to apply through the IRS. Or, if you use a legal service like LegalZoom to create your legal entity, they can do it for you as part of the process.
3. Get a business license. The requirements for this vary from place to place, so check with your local government to see what you need to do to apply for your business license. But you’ll need one before you get up and running, so get it done.
4. Get a business bank account. This is critical. You need to keep your business books separate from your personal accounts unless you want trouble from the IRS. Get an account in the name of your business, using your EIN (rather than your social security number). Consider getting a separate credit card for your business while you’re at it.
5. Talk to an accountant and/or a capable tax attorney. Starting a business is tricky. And there are a lot of potential pitfalls. A good attorney or accountant (or both) will help you avoid many of the mistakes that trigger an audit by the IRS or create legal hassles for your new company. And they can even help with the paperwork. Don’t skip this step just because you think it might be expensive. It’s worth every penny.
This is just the beginning. There are other things you’ll need to consider like registering with your state to collect sales tax (if necessary), and other permits your city might require depending on the type of business you start. But doing these five things now will get you moving in the right direction.
And of course, if you need a logo design for business cards, a website, or more, you know where to go. Good luck with your new venture!