You may have determined from my previous columns that either you need a second stream of income or that you want to launch your own business. You may have also determined that you have the personality, the drive and the skills to successfully start a business.
You may have chosen your business name, and your business logo is designed. Your business cards are at the printer.
You must now ensure that your business has all of the essential ingredients it needs so that it has a fighting chance to succeed. This will enable you to establish the proper business foundation so you can legitimize the operation and credibility of your business.
The ingredients listed below are essential for a small business startup and can also play a key role in the business credit-building process. Future columns will examine the following steps in detail:
Choose an entity structure
Give careful consideration as to which type of structure you select. You can choose to form an LLC, S-Corporation, C-Corporation or Limited Partnership. Knowing which structure is best for your income and tax situation is key for your business.
Obtain a Business Tax Identification Number
Also known as a Federal Tax Identification Number or EIN, this is the corporate equivalent to a Social Security number but used for businesses. This nine-digit number is assigned by the IRS to business entities operating in the U.S.
Choose a business address
A virtual business address or a commercial location is ideal for small businesses.
Set up a business phone number
A toll-free number or local phone number is a reliable source for a company’s communications. It’s key to dedicate a phone number exclusively for business that can also be listed in major directories.
Establish a web presence
A company website and social media presence is just as important today as having a business phone number or email address. Your web presence provides the opportunity for a customer or lender to verify and learn more about your business.
Open a business bank account
A business operating account will be your most important tool for managing your company’s finances. This will also allow you to completely separate your personal banking activities from your company’s.
Obtain a merchant account
Accepting credit cards from customers is an essential part of doing business today. There are mobile credit card readers to virtual terminals, but essentially you need to have a method established to accept credit cards.
Write a business plan
A business plan is the document that sets out in detail exactly how you will run your business. It is an essential document that every business must have and at a minimum should specify in detail how you will run your business, how you will fund your business, and how you plan on attracting customers.
This small-business checklist of essential elements is to help you structure your business in a successful way. With this list you can evaluate your startup at a glance and be sure it has every element it needs to operate as a real business.
Kimberly Slay Holmes is an attorney who has been practicing law for over 25 years and has represented businesses and their owners throughout her legal career. She has her own law firm in Maple Grove, Minnesota and Baton Rouge, Louisiana. She welcomes reader responses to [email protected] or 763-553-2000, and you can follow her on twitter @ks_legal.