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Published By Faith Stewart at April 3rd, 2019
Are you wondering how to start a business? Do you even know where to start? Here is everything you need to know.
When you decide to start a business, it is like you are stepping on a roller coaster. It’s a thrill ride for sure, with uncertainty around every corner. With your safety belt however, along with the knowledge that others have survived before you, you can take comfort and enjoy the ride.
From getting it up and running to helping it grow, and everything in between, the whole experience of starting a business can be rewarding but overwhelming. Like a roller coaster, the most difficult part can be simply that first step. It can be difficult and confusing figuring out those first steps, and that is where this essential guide to all things about how to start a business can come in handy.
From choosing a name and legal organization to broader issues like funding, we have it all. It important to remember that some requirements vary by state, so we have compiled and linked information by state as well. We will be adding to it regularly, so if your specific state isn’t here now keep checking back.
For now, we have plenty to get you started, so buckle up. You are in for a wild ride on the roller coaster of business ownership.
When you look at a roller coaster looming above you, it can be tempting to stay in your comfort zone and walk away. The only way to conquer that feeling is to put one foot in front of the other and just get on. What does this mean when it comes to starting a business?
Once you have a name, you need to decide on the legal organization. That could be sole proprietorship, partnership, or incorporation of some sort. Incorporation is the absolute best route due to the protection it offers and the ability to help you establish and build credit in your business name separate from your personal credit.
Options for incorporation include corporation, s-corporation, or LLC. They vary in cost and protection, so which one you use is totally up to you depending on your situation and needs. However, they all serve the purpose of separating your business for establishing business credit. More on that later.
After you have a name and you incorporate, you need to grab an EIN from the IRS. This is an identification number for your business similar to an SSN for an individual. Once you have this, it is time to register with the Secretary of State in your state.
State offices register and authenticate business entities and trademarks whether a sole proprietorship, partnership, LLC, or corporation. They process, file, and maintain records related to business entities.
If you decide to incorporate, you must file articles of incorporation with the Secretary of State. Business owners can write their own documents or use forms provided by the State office. Each state’s requirements for registration may vary somewhat.
Annual reports may also be filed, either by mail or online, with the Secretary of State.
Secretary of State offices are responsible for registering corporations, limited liability companies (LLCs), and partnerships. They also handle business mergers and acquisitions, as well as process articles of dissolution if you close down.
In addition, for every state or commonwealth within the United States, the secretary of state office is responsible for maintaining the database of all business entities registered in that state. Basic information from this database is a matter of public record, which can prove useful for citizens, business owners, and aspiring entrepreneurs looking for information about a particular business.
Performing a business entity search through your state’s office of the secretary of state can be useful in the beginning stages of starting a business. First, it can help you ensure the business name you choose is not already taken. It can also help verify the status of an existing business, such as a potential vendor, customer, partner, or competitor. That is helpful before signing a contract with an unfamiliar business.
If a federal agency regulates your business activities, you will need a federal license. According to the Small Business Administration, businesses in the following industries will need a federal license.
The SBA also has a wealth of other information you need to know for starting your business. They can help with everything from writing your business plan to finding funding.
We really loved this article from Alliance Virtual Offices on how to start a business. Their tips are just fantastic and should be of help to anyone looking to start a business.
There are different permit and licensing requirement that are dependent on industry and state. In addition, some local governments have their own requirements. We have compiled a list to help you figure out what the requirements are in your state. Remember to check back often if your state isn’t linked up yet. We are adding new information all the time.
|Montana||Nebraska||Nevada||New Hampshire||New Jersey|
So make sure to check if your state is added!
|New Mexico||New York||North Carolina||North Dakota||Ohio|
|Oklahoma||Oregon||Pennsylvania||Rhode Island||South Carolina|
|Virginia||Washington State||West Virginia||Wisconsin||Wyoming|
Once you have a name and incorporation is complete, it is time to hit the ground running. This means funding. It is likely startup funding will have to come from a small business loan, a grant, or self-funding. If you have to finance your startup, your personal credit score is probably going to be a factor. How much of a factor depends on your lender and the type of loan.
Some lenders, such as traditional banks, rely almost solely on personal credit history. There are some non-traditional type lenders however, that will focus more on business credit, time in business, and business financials.
Regardless of how you are able to find the funds to start your business, there is never a time when you will not need funding. There will be times when you need cash for various reasons. It may be because of a problem, or it could be for growth.
When those times come, you are going to want to apply for financing using your business credit rather than your personal credit. What is business credit? It a credit score assigned specifically to your business rather than your personal credit history. How do you get it? It isn’t hard, but there is a specific process. While you can begin this process at any time, it is immensely helpful to start it at the beginning.
And don’t forget properly doing your business taxes – that will always save you money.
The reason the beginning is the best place to start is this. The very first step in establishing and building business credit is ensuring your business is fundable. A big part of this is how your business is set up. However, it’s never too late. After your business is set up to be fundable, you have to get initial accounts reporting positive payment history. It’s hard, because most vendors want to see good credit before they extend credit. Also, only about 7% of companies that offer credit to businesses actually report. The key is to know which account to apply for initially that will both extend credit before you have credit and report to your business credit profile. You have to do things in the right order, and that is where a lot of business owners get tripped up when it comes to building business credit.
So there are many steps to starting a business. It is important to start on a firm foundation. Then, when the twists and turns come, you can be safely secured in your seat. That means ensuring you have a name and EIN, and all the licenses and registrations necessary at each level of government. Also, make sure that you are legally incorporated.
Next, start at the beginning with building business credit so that you can continue to fund your business throughout its life without affecting or depending on your personal credit. Do these things, and you are well on your way to being able to sit back and enjoy the crazy ride.