Written by Mia McNeal, WBC Instructor. This post originally appeared in her blog and is posted with her permission.
Pathway WBC Instructor, Mia McNeal, CEO of Centeris Consulting Group, shared with us how to officially register your business! Centeris Consulting Group prepares, promotes and produces entrepreneurs through business consulting and workshops.
One question that I hear from clients is, “so how exactly do I start? Like what’s the logistics?” In coaching, I cover all types of things for budding entrepreneurs; value propositions, customer persona, cost structures, etc., but a lot of times there is confusion when the rubber meets the road. What are the actual steps after you’ve exclaimed: “I’m ready!”
License to Go:
Depending on the type of business that you have elected to start, a permit may be required to get going. For example, if you wanted to start a food truck, you need to understand the type of license and permit even needed to operate. The most costly mistake you could make initially is an investment in a business without knowing the requirements or costs that may be associated.
What’s in a Name:
The first thing that I advise is to do a check on the business name. I would suggest checking everything, not just trademarks, although that should be one of your first stops. Check to see if your business name is also available as a domain name, social media, and in your state’s Secretary of State’s business entity search.
Build a Solid Structure:
Once you have decided on a name, you then need to determine your business structure. For most of my clients, I recommend setting up your business as an LLC (Limited Liability Corporation). The benefit of setting your business up this way is just as the name suggests. You are not personally liable in the event your company has to go through any litigation. Although an LLC generally is my recommendation, the other most common types of business structures are a sole proprietorship, general partnership, and corporation. After determining the business structure, you would visit your Secretary of State office (this usually can be done online and found under business services). There is typically a fee, but this will vary by state.
Talk to Your Uncle:
To indeed be legitimate, you have to get a tax identification number from the IRS- the Tax ID number or EIN (Employer Identification Number). If you chose to be a sole proprietor, you might elect to use your social security number. This process can also be done online at irs.gov. Your tax ID number does not cost you anything to get and takes a matter of moments.
Additionally, if you conduct business within any county or incorporated municipality, then you should register for and remit business tax. Business tax may consist of two separate taxes: the state business tax and the city business tax.
With a few exceptions, all businesses that sell goods or services must pay the state business tax, including companies with a physical location in the state, as well as out-of-state companies performing certain activities in the state.
Make sure that once you finish all of those steps, you set up a separate bank account for your business and get business insurance.