First Time Entrepreneur’s Guide: Starting a Business

Guest blog by Lyn Stangeland

The First Time Entrepreneur’s Guide to Starting a Business

You earned your degree and an impressive set of skills along the way. Now you’re interested in starting a business and building something you are passionate about pursuing, but before you can get started, there are several things you will need to do, including building your product or service and finding customers.

Here are 9 Steps to help you start a business:


Step 1: Choose a name

Choosing a name is fun. You need to choose a name that is catchy, tells people who you are and is memorable and search-friendly so that people can find you right away. You will need to search the United States Patent and Trademark Office (USPTO) to learn whether your chosen name has been trademarked. If it hasn’t, consider filing your name with the USPTO to get a trademark on it, so no one else can operate under that name.

If you are running your business in the State of California, you may want to also check the California Secretary of State website to see if anyone else is using your business name.


Step 2: Determine the best legal entity for your business

You have a few choices such as a C-corp (corporation), S-corp, an LLC (limited liability company), or as a sole proprietor. There are different reasons to form each type of legal entity and you should seek the advice of an accountant before you do. There are tax consequences, paperwork filing, and the ability to raise money to consider.

You may also need to file for a DBA. (Doing business as). If you have a customer-facing name that will be different than your legal name, you need to file for a DBA. For example, If John Smith, a sole proprietor, operates a company under the name “International Web-Design Consulting Services,” he needs to register the name as a DBA.

Most county and city websites have instructions posted on how to file a DBA (e.g., San Luis Obispo County):

Choose Your Business Structure is an excellent resource for understanding these legal entities.


Step 3: Purchase a domain

Once you’ve picked a name, it’s time to go after a domain. It is vital to ensure that you are registered as the domain owner. For a smooth client experience, your domain name should be the same as your business. Search to see if the domain you want is taken using these SBA-accredited databases:

There are several sites where you can register your domain name such as:

NameCheap

Digitalocean

GoDaddy


Step 4: Register for a business license

Most cities and counties require you to secure a business license to operate. Check with your local City or County Business Office (again, most county and city websites have instructions posted on how to obtain a business license (e.g.., City of San Luis Obispo).


Step 5: Check on other permits or licenses

The local government in your area, such as that of your city or county, may require specific permits and licenses. Not having the correct licenses or permits can cost your business a lot of money. Check the Small Business Administration (SBA) for licenses and permits:

These might include:

  • Alarm Permit
  • Building Permit
  • Business License and Tax Permit
  • Health Permit
  • Occupational Permit
  • Signage Permit
  • Zoning Permit


Step 6: Open a business bank account

It is pretty easy to open a business bank account. Some banks even allow you to sign up online. You need to have the proper business documentation. Requirements may vary slightly, so it is a good idea to contact your bank to see exactly what documents you will need. Most banks have this information on their website. It’s essential to keep personal, and business expenses separate when running a business. You want to be able to prove to the IRS you’re running your business to make a profit. This ensures the losses you experience during the first few years will remain tax deductible.


Step 7: Insurance

Insurance coverage is essential for any business. It provides a safety net in case of any unforeseen risks that occur in running the business. The State of California requires businesses to carry certain kinds of insurance. Having adequate protection is a must, especially if you hire one employee or more. The U.S. Small Business Administration offers some guidance on determining what kind of business insurance you might need.


Step 8: Pay your taxes

Depending on your business entity, your tax filing will be different. Please seek out a certified accountant to help you with this. Remember that businesses typically pay quarterly taxes so be sure to set aside money from each paycheck to cover those quarterly and annual tax expenses. The IRS website has more information on this topic.


Step 9: Get an employee identification number (EIN)

As soon as you hire an employee or set up a retirement plan, you must register for a federal employer identification number (EIN). There are several registration requirements for businesses, which have employees. For more information visit the IRS website.

Starting a business takes effort and commitment, but following your passion all while helping solve a problem or fill a need can be rewarding.

 

What Step are you on? Start your next journey TODAY!