Starting a business is an exciting event that requires a lot of careful planning and organization. Here is a checklist of ten things to take care of as soon as possible once you have determined to start a business. This list will help you establish your business as well as bring validity in the eyes of lenders.
Incorporating your business can protect personal assets from business liabilities, not to mention affect your tax returns and tax obligations. A business becomes its own separate entity with a unique tax ID number and returns, so it is important to carefully consider what kind of business you should have. Partnerships, LLCs, Corporations, and S-Corporations will each have a different impact on your taxes and liabilities, so it is important to carefully consider this decision, and speak to a knowledgeable attorney or tax professional. In some cases, Finance Store walks our clients through this process.
2. Business Bank Account
Unless you are self-employed, you will not want to use your own personal bank account for your business. How important is this? Enough for the IRS to advise “One of the first things you should do when you start a business is open a business checking account. You should keep your business account separate from your personal checking account.” The IRS also recommends that your business bank account be used for business purposes only, and that you avoid writing checks payable to cash.
3. Business Insurance
Incorporating is not the only step towards limiting your business liabilities. Insurance for your business can minimize the risks of unexpected events, unseen liabilities, and even unfortunate losses. The US Small Business Association recommends commercial business insurance, even though it is not required by law. This can include General Liability, protecting against legal hassles from accidents, injuries, or negligence claims; Product Liability, protecting against injuries caused by defective products; or Commercial Property, protecting against fire, severe weather, vandalism, and more broad definitions of property.
Employer insurance is required by law. If you have employees, you must carry worker compensation, pay unemployment insurance tax, and disability insurance if your state requires it.
4. Professional Business Address
Many states require your business to have a physical address, and will not accept a PO Box as a Registered Address for your new LLC or corporation. Banks will also most often require a physical address to set up your business bank accounts. If you don’t have a physical address for your start-up yet, or if your business is home based, consider a Virtual Office service like Regus to provide a real street address and mail handling for your business.
5. Merchant Account
You will need the ability to receive payment for the goods or service that you offer. A merchant account allows you to accept debit and credit card payments. Merchant accounts will typically require a business bank account, a business license, and an application to be approved.
6. Web Presence
There is no better way to get your new business in front of potential customers than with a website, considering that 81% of customers research online before going to a store to make a purchase. Your website can educate and inform future customers, and give them confidence in your goods and services.
A website can cost next to nothing to set-up yourself, or you can invest money in a professional web design, complete with professional copy and ongoing content. Low budget or high budget, a website is a must.
7. Social Media Accounts
Social media is important to your business marketing efforts. Social media drives traffic to your website, increases your brand recognition, and provides a direct line of communication to customers. An average of 10% – 15% of your overall marketing budget should be set aside specifically for social marketing. This can be done yourself through paid ads and “boosted” content, or you can hire an inbound marketing agency to take care of this crucial marketing tactic for you. If you are just starting out and don’t have a marketing budget, it is still important to create and tend to social media accounts.
8. Personal Credit Monitoring
When your small business is just starting out, your personal credit may be used for new accounts. It is important that you know exactly what is going on with your personal credit, what your credit scores are, and who authorized users on your credit lines are. Keep an eye out for derogatory claims and immediately remove any that are erroneous. Business credit and personal credit are different, but ignoring your personal credit can lead to trouble getting your business accounts up and running.
9. Professional Dedicated Phone Number
When clients call you, and they will, a professional greeting on a dedicated business line is important. Cloud based services like Ring Central offer all-inclusive services like voice, fax, text, conferencing and HD video meetings for a small monthly fee.
10. Accounting Tools
Your business will need to organization and diligence for accounts receivable, accounts payable, and invoices. Professional accounting tools help you keep your credit in good standing by avoiding missed or late payments, and be a blessing come tax time. If you are a do-it-yourself kind of person with a good grasp on business finances, then accounting tools like QuickBooks can help you take care of money in, out, and owed. If this feels like an overwhelming task, then contact a CPA near you to get professional assistance.
The last step on your business start-up checklist is to determine fundabilty. At some point your business will need funding. Start-up costs, growth, or even the sale of your business will hinge on what your business is worth. Determine the fundability and measure of potential success of your business with the free Business Fundability tool. Sign up with Businessfundability.com for a self-lead process to answer the question “Is my business fundable?” Finance Store offers this tool free to your business because we believe it is so important. Don’t wait to get started!