Steps To Starting A New Business

Image by yourbartender via Flickr

Starting a new business is exciting, however, there are a lot of administrative items to take care of.  Here is a general guide on what to do.

1.  Write a business plan and create short and long term goals.

2.  Determine how you intend to fund your start up.

3.  Choose the type of entity (Sole proprietorship, LLC, Corporation).

4.  Register the name.  You can do this by forming the LLC or Corporation in your state.  Or, you can file a fictitious name.

5.  Create company documents.  You can do this with software or hire an attorney.  If you intend to have partners/shareholders I would strongly recommend using an attorney.  You never know how “friends” will behave when it comes to money.  The company documents need to make it clear what each partners financial responsibilities are to the company and to the other partners.  These documents are internal documents that you will keep on file.   If you have more than one owner you should also consider having a buy-sell agreement funded with life insurance.

6.  Obtain a business license

7.  Apply for a Federal Tax ID#

8.  Open bank account

There are other things too, like finding office or retail space, negotiating and signing a lease, build a web-site, etc.