After you have decided that you are finally going to do it, have a strategy in place (know potential customers, what you are selling, how, etc.) now it is time to get to the paperwork-y, detail-oriented part of the process and actually begin establishing your business.
Meta tip – keep track of all the costs and receipts for setting up your business. You will be able to reimburse yourself for those later.
Here we go.
First off, calm down and breathe. Do one thing at a time. You can get through this. You will learn as you go, but you can do this.
1. Pick Name for Your Company and the Get Domain Name Registered
With so many .com domains already taken, picking a company name is getting pretty challenging. You want something unique, something related to your field, something short-ish, or nicknameable.
Tip: Try a portmanteau – think Bennifer, brunch or dramedy. In business, some great examples are Verizon (veritas and horizon), Accenture (accent and future), Comcast (communication and broadcast), and Cinemax (cinema and maximum). Can you take two related words and use that? What about your word in a different language? Say Strength and what does it mean in Latin or Spanish? Misspellings are popular too. Flickr (instead of Flicker).
Choosing whether to use the .com domain. As we move into Internet 2.0, I think having a .com is less important. A lot of startups use other options such as .io, or .solutions, or .Xyz. There are a lot of interesting ones out there that you could explore.
Be sure to register several versions of your domain, but don’t go crazy with the 3 year sign up or all of the other upgrades that the domain registries will sell you. And trust me on this: 1. Do NOT have them build your website and 2. Do NOT use them for your email. If you go this route you will regret it. Trust me.
Do pay for cybersecurity.
Cost ~$100? Time. Oh lord, this can take a while. Plan for a month, maybe 2 or even 3.
2. Pick What Type of Business You are Going to Be
First you should decide if you are going to be an LLC or a Corporation. It may sound daunting, but even for small businesses (even if you’re self-employed), creating an LLC or a Corporation will actually save you money. There are benefits to both and it will depend on how you choose your business to be run. Per Legal Zoom, here is a helpful breakdown of those options:
● LLC (Limited Liability Company): Being an LLC will help you shield personal assets from business liability and requires separation of business and personal finances. It is allowable in all 50 states and DC.
● Inc (Corporation): As with an LLC, being a Corporation also shields your personal assets from business liability and requires separation of business and personal finances. It is also allowable in all 50 states and
DC. However, it does not have a flexible management structure or flexible tax reporting options.
To learn more, take a look at the full breakdown here, from Legal Zoom.
Time: Weekend? Maybe a week of asking people questions about this and deciding? Lots of Googling.
3. Get Formation Docs Done and Signed
This includes Articles of Incorporation, Bylaws, Stock Certificates (if S or C Corp). You can use Legal Zoom if you are setting things up in a pretty standard, straightforward manner and you are the ONLY owner. However, if you have one or more partners, I highly recommend you have a lawyer draft up your agreements, because you will need to have your documents define critical things like 1. How disagreements are handled, 2. What happens if one of you wants to sell 3. What happens if one of you dies.
Cost: Up to 5000?
Time: Maybe up to a month or two of drafting it, back and forth, finalizing it, and getting signatures.
This is akin to getting married. You will have some big, deep discussions with your partner and need to agree on things. If you can’t get past this phase, consider it a blessing and maybe go at it alone. Or hire your potential partner as an employee or contractor instead of them being an actual business owner with you.
4. Register with the State
Go to your state commerce website and complete all of the requirements needed to register your company officially with the state. For example, in Maryland you would use Maryland Business Express to register your business.
Cost Up to $100?
Time: 1-4 hours to register. Weeks to get the official response paperwork.
5. Get EIN
An EIN (Employer Identification Number) is akin to your social security number, but for your company. Getting an EIN makes your company official in the eyes of the Federal Government. Oh. And it is also how they make sure you pay your taxes.
Cost: Free (if you do it yourself)
Time: Less than 1 hour to complete the paperwork. If you apply online, you will get your EIN immediately. If you apply via mail, it can take 4 weeks or more.
6. Get Your UEI (Unique Entity ID)
Similar to your EIN, this is the number for your company’s credit score. This is the new unique entity identifier that replaced the DUNS number, effective April 4, 2022. The UEI is a 12-character alphanumeric ID assigned to your company by SAM.gov.
Time: Less than 1 hour to set up, although it will take longer to receive your Unique Entity ID number.
7. Get Company Bank Account – Checking and Savings
Do your research and find a bank that understands your market and has low low fees.
Cost: Initial deposit.
Time: Expect about 1-2 hrs. Take all the partners with you. Everyone needs to be there in person at the same time. Bring two forms of ID to be on the safe side.
8. Get a Company Credit Card
A lot of times your bank will offer you one and that is a decent way to start. I personally recommend the Capital One Spark card that gives you 2% back. The only negative is there is often a cap of 20k that they will not go past. However, they let you pay it off and get that 20k back immediately. Plus the 2% is great. Amex is another good option, but be careful, they often wanted the balance paid off immediately, so it is more like a temporary loan. As soon as you have your bank account and company credit card, start paying for everything company related from these accounts. Stop using your personal money. You do not want to co-mingle.
Time: Less than one hour. You’ll need your partners address, birthday and social security number. Remember I said partnering is like marriage? You will know each other well!
9. Get Your Email Accounts Setup
Don’t be one of those people who is email@example.com. That looks like you don’t have a real business. If you have a domain name, you should have a proper email that is firstname.lastname@example.org. I personally recommend using the Google G Suite for your email account instead of Microsoft 365 Outlook. Why? Google’s cybersecurity is better and since Microsoft is a market leader, they continue to have a huge number of cyber attacks against it. Google also understands modern business and that many of your employees will mostly likely travel, telework, or work remotely at least part of the time, which means that they won’t always be using your company provided network. They will be using whatever wifi is around them– be it their home, Starbucks, or at a hotel. Also, I am a huge fan of how easy it is to search in G Suite. Don’t stress about the setup. They have great documentation that will walk you through all the steps and they have excellent phone support too. Worst case, ask your IT savvy friend to walk you through this together – as an owner you need to learn and understand all sorts of things that aren't necessarily your area of expertise.
Cost: $10-20 per user/month.
Time: Less than one day for setup.
10. Pick Brand Colors and Create Your Logo
I think over your company name this is one of the most important things to get right. You want your colors to be evocative of the feeling you are trying to invoke in your customers eyes – be it strength, trust, playfulness. Same goes with the font and your logo.
Cost: $300 low end – 1500. 10k if you go crazy and have a lot of money to spend. Though I have a favorite graphic artist I work with, I have used 99designs for my logo creations. I like seeing the rapid first options from a multitude of designers. I also like the ability to share the designs to poll my friends and family. Canva is another helpful site to use for logo creation as well as branding.
Time: 2 weeks to 1 month.
You can always improve your logo, brand, colors later, but it is an expensive thing to redo. Better to take the time to get it right in the beginning.
11. Get a Proper Phone Number
Do NOT use Google voice and do NOT use your current phone number. Again, doing that makes it seem like you aren’t running a real company. But you are. So get a proper phone number. My two cents - I absolutely love Grasshopper for this. We have a professional company phone number that rings to our cell phones. We have extensions for our main departments – sales, finance, security (even if, in the beginning, it was all the same person). We even paid extra for a professional voice recording for the answer.
Cost: Plans are annual and start at $26/month for one phone number with 3 extensions and the packages go up from there. $75 for voice recording.
Time: 1-4 hours to set up.
11b. Get a Fax Number
I hope you don’t need a fax number, but if you do, there are several online fax numbers that you can sign up for like myfax.com. Grasshopper also provides this service and it’s included in all of their plans.
Cost: Free if you purchase a Grasshopper phone plan; otherside fax services cost about $10/month.
Time: Less than an hour
12. Get Your Accounting Software Selected and Set Up
The most common one is QuickBooks online, but Freshbooks and other software upstarts might be a better fit for your business.
Cost: $50 per month depending on the number of users.
Time. 4-8 hours setup. But plan for weeks of playing around with it and understanding how to use it, how to generate reports etc. Many of these systems also include a time keeping and payroll function.
12 b. This is also a good time to find and pick an accountant.
Start by asking industry friends who they use for an accountant. Then have your accountant help you go through your accounting software and make sure everything is properly setup up. You should plan to meet with them at least once a quarter or worse twice a year in the beginning. I didn’t do this and it cost me a lot later down the road.
Cost: $150-200 per hour.
13. Get Business Cards
Getting closer to being done. Time to order your business cards. Hopefully your graphic artist created these for you or at least a solid template. Go in and edit and pick your place to order. I personally like moo.com. The quality of their cards is so much higher for a mid-range price point that people frequently comment on the quality and style of our cards. They also have some really cool options, like metallics, unique sizes, and even different backs for the same front, which is especially cool if you are in the creative services – like a hair stylist or photographer.
Cost: $20 for 50 cards, prices get better as quantities increase.
Time: 1-2 hours
14. Create Website
Cost: $300 DIY or ~$5000k.
I think there are so many great templates on Wix, Wordpress, and SquareSpace that if you feel pretty handy, you can make a go at creating your own website and it will look quite professional.
Pro tip #1: If you pay a company to develop your website, be sure to include a clause that says they will provide an website SEO report at the end that shows that your website is 100% optimized. You would not believe how many web development shops don’t do this (i.e. they are not that professional for web!)
Pro tip #2: Make sure you have the username and password to your website so that you can go in and make simple edits to the site yourself. You only want to pay a web design company to add a whole widget, not basic text edits.
Time: 1-2 months. Drafting the contents can take a while on your end. Same with the style and deciding page layout.
15. Set Up Social Media Accounts
You should be on LinkedIn, Facebook, Instagram, Twitter, and any other platform your potential clients’ eyeballs are at. While you may have a clear preference for one platform, don’t ignore the others.
Pro Tip: Make sure your logo works in the small circle or square profile pictures on social. You may need a graphic artist to rework your logo for this exact purpose. Same goes for your LinkedIn Banner (personal and company) and IG highlights.
Pro Tip: Stick with your brand colors, style, tone, and font.
Time: 2-3 hours
16. Register in SAM (govcon)
If you want to be a Federal Government contractor, then you must be officially registered in SAM, so go sign up.
Time: 8 hours. It is a lot of verbiage. Some of which you may not understand in the beginning. Google what you don’t know and answer as truthfully as possible.
17. Find Related Networking Events
Even if you are a completely digital company like clothing or product sales, still there are a lot of local networking events that you should go to. You will meet like minded people, people can give you ideas, collaborations, partnerships, etc. Trust me on this. Get out of the house and meet people in real life. Some events might be invite-only--not that they are super exclusive, but they may not be listed publicly so someone has to include or invite you.
Cost: Free (or nominal) for most events.
Time: Up to you!
That’s it. Now you’re done. Go get ‘em, Tiger. Go pound the pavement, grind it out, and get those sales. Congratulations! You have started a business! Woohoo! Cheers to you on the road ahead.
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