Setting up your Business
So you have an amazing business idea and you’re ready to get started.. Now what ?
The first thing any new business should do is figure out the type of business you want to operate as. There are many options but you want to make sure to pick the one that makes the most sense to you. I typically recommend setting up an LLC to my clients as it makes it easy to transition to an S-Corp when the time is right. (Blog post coming soon about different business structures)
Once you have figured out what type of business you want to open you have to register with your city or state. Each type of business and state has a different policy for registering a business. Check out your local Secretary of State website for more details.
Once you have registered with the state you will want to apply for an EIN number (this does not apply to sole proprietors) an EIN number is like a social security number for you business. You can apply for an EIN number on the IRS website. Make sure the website has a URL of IRS.gov.
Once you receive your EIN number you are ready to open your business bank account. Do not skip this step. Having a business bank account helps you separate your business transactions from your personal transactions and makes things a lot easier come tax season.
I would also suggest opening a business savings account well at the bank and using it to transfer over your estimated tax payments each month/quarter. I typically recommend clients set aside 15-25% of their profit for taxes but you should always consult with a CPA as each person has a different tax situation.
You can also apply for a business credit card if you know your going to have a lot of upfront business expenses. I recommend looking for one with a zero percent financing option so you have some time to pay off your business start up expenses. Just make sure not to charge up more than you can pay off in 12 months. Chase Bank has a lot of business card options.
If your business is product based or requires charging sales tax make sure to register to pay sales tax with your city or state. When you register the city or state will also let you know the frequency of payments. Some require monthly payments while others could be quarterly or yearly. Remember you are responsible for collecting the tax from the customer and paying it to the city/state!
Now that the boring stuff is over its time to start doing what you love!
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