Many of our students want to start a business but they don’t know what to do first. Well tonight I will show you seven easy steps to getting a business started. It’s not as hard as it sounds.
1. Choose a business name. This is an area where some of our students have problems. They can’t make a decision on a name for the business. “Should it be my name? My initials? My dog’s name?” I have had students who couldn’t choose a name after an entire week.
Your business’s name can be anything you want it to be. It can be formal, silly, your name, or anything you want. Basically you can either choose a name which is general such as Cherry Associates, or you can choose a name that says what your business is all about.
For example. If I don’t want anyone to know what kind of business I do, I can give it a name like Cherry Associates. No one can tell what I do.
On the other hand, if you want your business name to tell everyone the nature of your business then make it specific. For example, there is a business in this area that sells and fixes PC laptop computers. They named their business PC Laptops. Everyone knows what they do. So Pick a Name! Then go to your state’s website in the business section and you can check to see if no one else has the name you want. If they do just change yours a little like Cherry Associates, WCherry Associates, Bill Cherry Associates etc. When you change the name you want a little you can get the one you want.
2. Choose a domain name. A domain is the address of a website like www.cherry.com. That is a domain. Every website has one. Well, you will have a website for your business some time so you might as well get the domain name you want now.
Your domain name does not have to be the same as your business. In fact it can be completely different from the business name. For example, my business name might be Cherry Associates but my domain is www.familyvaluesvideos.com If you have a broad vague name like Cherry Associates you can have several different businesses under the umbrella name. In my case, under Cherry Associates I have familyvaluesvideos.com, worlds100greatest.com, solarenergyprofit.com and yourcopyrightservice.com. None of the names are similar to the business name.
Choosing a domain name for your business takes a little more work. When you have the name you want, go to www.godaddy.com and see if it is available. If it is buy it, if it is not available meaning someone already has it, just put a prefix or suffix on it and it will be available. Yea!
3. Pick a business entity. Every business is created as a separate entity from the owner. There are several kinds of business entities or organizations to choose from. There is a sole proprietorship, partnerships, limited liabilities companies, and corporations. The things you want to consider when you choose a business entity is tax advantages and liability protection. The most popular kind right now is the LLC, limited liability company but talk to an accountant to see which one is best for you.
A lawyer will actually create the business entity with all the legal paperwork etc. Then either you or the lawyer send the paperwork into the state to be approved and recorded. You can also have other places create and submit your paper work. An example is www.legalzoom.com. They do a good job and their price is reasonable.
Depending on the state you live in, approval of your paperwork could take anywhere from one hour if you live in Utah, to three months if you live in California. One day an envelop will arrive with all your approved paper work and you are official. In Utah you can fill out an on line form at the state website and in about an hour all your approved paper work is emailed to you. No kidding.
3. Tax numbers are necessary. When you do business with suppliers or vendors they will require two numbers from you; your EIN (employee identification number, and your state tax number or sales certificate) depending on the state in which you live.
The reason they will require your tax number and EIN number is so they don’t have to charge you sales tax when you buy your inventory or supplies. They need your numbers on file in case the IRS decides to audit them. The state issues the state tax number but you can get the EIN by calling the IRS. A friendly agent will ask you 12 simple questions and then give you the number over the phone, it’s free! How many things today are really free? The state tax number is the number your business will be known by the state and the EIN is the federal number with which the government identifies your business.
4. Open a bank account for your business. You can open a business account or use a separate personal account. Call the bank before you go there and find out what they will need to set up you account. They will want to see your business paper work, your state and EIN numbers, your driver’s license, birth certificate, blood type, and your dog’s middle name, (Henry.) Just kidding but find out what they want so you are prepared. Get a VISA or Master Card for the business only. You don’t need a high limit, just something to use for everyday things and to keep track of your spending.
DON’T MIX PERSONAL AND BUSINESS FUNDS! If you do your accountant will hate you and you won’t get all the tax deductions your want.
5. Get a phone and a computer. Don’t use a four year old computer with more memory added, get a new one. If you are going to be in business, be in business. You can get a new laptop at bestbuy.com for $329 or so. Desk tops are even cheaper, but take my word for it. With a wireless laptop where you can go around anywhere in the house and work on it, you will never go back to a static desk top.
On the phone, all you need is an inexpensive phone and a small air time package. You probably will not be getting many calls so you won’t need a large cell phone package. But if you love gadgets, get an I-phone or an I-Pad and have lots of fun.
6. Set up your work area…office. Many new businesses today are run out of the home. That means there may be limited room to have an office or work area where you can have your computer, desk, and other things. If you have an empty bedroom great. If not you may need to clear out a corner of your bedroom and make your work area there. It might even need to be in the family area or kitchen. Where ever you can set up your office get it set up.
You need a desk large enough to hold a computer, printer, and your papers and things like staplers etc. You also need a filing system such as a two drawer filing cabinet, either metal or plastic. Get the hangy-down folders. Self employed people are often poor organizers and papers will pile up if you don’t have a place to put them.
7. Get the software you need. You don’t need any software for making and running a website. It’s all done on line but you will need word processing and spread sheet capabilities. Most computers come with Microsoft Works and it has both. If you buy a used computer that does not have these programs, you can get some for free.
If you go to a website, www.openoffice.org you can get FREE, some programs just like the Microsoft programs. You can down load them and they work great. If you haven’t down loaded anything before get your kid, grand kid or the kid next door to help you down load it.
You will also need some accounting and booking software. The best and most accepted one is Quick Books. It is user friendly and all accountants use it. Lastly if you don’t have it you must get a computer game called Be Jeweled Deluxe 2 at www.bigfish.com. You need it when you get so angry and frustrated with your business and clients you can relieve your mind of reality.
Well these are the seven easy steps to start your business. Now you have no excuse for getting a business started. Good Luck.
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