Our top 10 list of the most important items for any new startup business.
Every successful business starts out as an idea. That idea is like a seed - nurture it properly and it will grow into a successful small business, ignore it and it'll lie dormant until someone else grows it instead. As a new entrepreneur, you've taken the initiative to do something with your idea, and that is great! If you've never started a business before, you may have no clue where to start, or even what you have to file before you are even legally allowed to do business. To help new small business owners on their way to small business success, we've put together a list of ten things you need as a new entrepreneur.
1. A 'Doing Business As' (DBA) Name
If you want to sell a product or service under any name other than your own, you need a 'Doing Business As' name. Even if your business's name has your name in it - i.e. John Smith's Gardening - you still have to file for a DBA name. You'll also need a DBA name if you'd like to open a bank account for your business, or collect money under the business's name. Luckily, filing for a DBA name is fairly easy, and usually cheap. First you need to run a search for the business name you'd like to make sure no one else is using it. Once you know your name is available, all you usually have to do is register your DBA or fictitious business name with your state and pay a small filing fee.
2. Business Licenses
A business license is a government-issued permit that allows you to conduct business within a particular locality. Most cities will require new businesses to, at the very least, apply for a local license. However, many industries have to deal with extra regulation and licensing, so it is important that you apply for and receive every permit you need before opening your doors. The Small Business Administration has a very handy tool available to help businesses identify, and apply for, the licenses required by the city, county, state, and federal governments.
3. Insurance
Every business, no matter the size, needs at least some basic coverage. That means buying policies to cover property, liability, and worker's compensation. A property policy will protect your office and essential business property like computers, office furniture, and inventory. General liability helps protect your business from lawsuits in the event that someone gets hurt on your property, or if one of your employees either hurts somebody or causes damage. Finally, worker's compensation helps cover workers hurt on the job, and is actually a legal requirement set by most states once your business hires a certain number of people - usually three. Most insurance agencies actually sell composite policies, which have the basic coverage listed above, meant specifically for small businesses.
4. A Registered Agent
While not legally required as long as your business remains a sole-proprietorship or partnership, every business should still have a registered agent. Your registered agent is the person, or in some cases the company, that will receive services of process in the event of a lawsuit. They are also usually the point of contact for the government when the state sends out renewal reminders. Anyone with a physical address in the state you do business in can be your registered agent, but because of the sensitivity of the documents delivered to your registered agent, it is better to go with a professional registered agent service. MyCorporation can help you find a registered agent.
5. Your Articles of Incorporation/Formation
You are taking a serious step in protecting yourself and your personal assets by incorporating or forming a limited liability company. Corporations and LLCs are separate, legal entities, and as such can hold, and are responsible for, their own debt. That means you won't lose your home, property, or savings if the business takes a tumble and is unable to recover. Corporations and LLCs are also sued directly, so you won't be the target of any lawsuits. Forming a corporation or LLC takes a bit of time and costs money, but the protection a separate business structure affords you is priceless. Limited liability companies are formed with a Certificate or Article of Formation, run just like partnerships, and easier to maintain. Filing your Articles of Incorporation will create a corporation. Running a corporation is a bit more difficult, but the corporate structure does allow you to sell shares of the company and raise money through investments.
6. An Operating Agreement or Corporate Bylaws
Most states do not require corporations or LLCs to have a set of corporate bylaws or an operating agreement. However, it is important to clearly define how your business is run and governed. Limited liability companies are normally guided by an operating agreement. This agreement will describe the general functions of the LLC's managers/members, the formalities of voting, the allocation of profit and loss, and special tax classifications, if any. Corporate bylaws are a little more complex. They include rules on how shares are transferred, the rules of voting, and how to call meetings, as well as explaining the roles and responsibilities of corporate directors and officers.
7. Trademark and Copyright Protection
A trademark can be registered for any phrase, logo, design, image, or combination thereof, which is used in the open marketplace and does not already have a claimant. For example, when you create and use your business's logo, you have an automatic right to that logo. That right, however, may not preclude other businesses from using that logo because it is difficult to enforce an unregistered trademark claim, especially across state lines. If you trademark a logo at the federal level, you are helping to ensure that no one else profits from your IP or branding. Copyright protection is meant for creative work, so if you have a particular jingle that is part of your branding, it may be wise to file for copyright protection as well.
8. An Online Presence
A study led by GE Retail found that 81% of those surveyed researched companies online before making a major purchase. If you want your business to succeed, you cannot ignore the internet - end of story. That means, before opening your business, you need a domain name and a website. Now this website is going to be how you represent your business and your brand to everyone searching for your company, so it is vital that you invest in your website so it both looks good, and functions well. We also recommend that you start building your social presence once you launch your site, as social media is now one of the most powerful marketing tools available.
9. The Right Team
You aren't going to be able to do everything by yourself forever. Once business picks up and money begins to come in, you should start looking into hiring some help. But first you will need a Federal Employer Identification Number so the government can make sure you are withholding payroll taxes and abiding by labor laws.
10. A Calendar
As a new business owner, you are quickly going to find that a good calendar can really be the difference between staying organized and drowning in a flood of work. Your schedule is going to quickly fill up with meetings, marketing events, and other obligations that, while necessary, will drain your time. When you're being pulled in nine different directions, it can be very easy to forget something like an annual renewal or a quarterly tax payment. However, miss too many filing deadlines, and your business could fall out of compliance. So buy an appointment book or some other sort of calendar and mark every, single important date.
A new company can avoid a few of the traditional trappings of business when first starting out. You can use a home office instead of renting another space. You can store inventory in your garage instead of in a warehouse. You can even use your website as your storefront in lieu of a brick-and-mortar location. But there are some things that you shouldn't skip over. Before opening your doors, protect yourself with the right insurance and business structure, and protect your brand by registering any trademarks or copyrights used to market your business. Make sure you comply with local, state, and federal regulations, and that you know what needs to be filed, and by when, to stay in compliance. And, finally, remember to enjoy yourself. Running a business is one of the most rewarding jobs you'll ever have!
