Steps to Forming a Business: Your Checklist
To-do list and tasks to help you get started in forming your business.
Congratulations! You have generated an idea – a product or service that will bless humanity. Innovation is the first step to creating a business. You probably have different thoughts dashing through your mind about getting this business started, but where do you start from?
We have created a to-do list and tasks to help with organizing your thoughts and steps.
- Write a business plan. You need to create goals and objectives for your new company. Begin with a detailed outline or simple details of what you want to accomplish.
- Internal Documents (Operating Agreements and Bylaws). Businesses are maintained by their rules. Corporations are governed by their internal bylaws while LLCs are governed by an operating agreement (not required but highly recommended). It helps with organization.
- Business Name Search. Check on the Texas Secretary of State’s website (TX-SOS) to make sure your business name is available. If you have a unique last name and you are identifying your business by your unique name, name search may not be needed. However, name search flows with the next step.
- Registered Agent. Businesses must maintain an address for service of process where legal documents can be received. Some business owners ignore this important step in forming their businesses. However, acquiring a registered agent protects your private information if you do not have a physical location.
- Form/File legal business structure. The business structure you choose will affect how you file your tax return, personal liability, and if you can distribute shares. Check our previous post to learn about the different types of business structures: LLC, DBA, LP, LLP, Corporation, e.t.c.
- Get a Federal Employer Identification Number (EIN). Most banks require EIN for opening a business account, and if your business will have employees, then the EIN is essential. They are issued by the IRS at no cost.
- Start-up Capital. Starting a business requires money. It is best to have money saved up prior to running. If you do not have savings and plan to obtain business loan(s), lenders often request a completed business plan prior to approval of funding. So, go back to step 1 if not completed.
- Open a Business Bank Account. In order to ensure that your personal assets are protected, businesses have to maintain a separate account from their personal account. Open a merchant account. Some banks waive monthly fees for businesses such as credit unions. This is where you can apply for a business credit card, if necessary.
- Business Licensing and Permits: some businesses require licensing especially if your business will be situated in physical location. These requirements include alarm permit, building permit, zoning permit, tax permit, e.t.c. Check out www.sba.com for more details.
- Opening Day. Set an opening date for your business. It is a good visual and psychologically healthy for your business. It helps keep things on track and increase your productivity.
- Logo and Image. This is the best time to create a logo for your Business. Your logo is part of your brand and critical to the formation of your business. There are diverse sites that allow you to create your own logo; it could be as simple as the letters of your business or a picture that reminds people what your business is about. Otherwise, you can hire a graphic designer to generate your logo.
- Website. Having some form of web presence is important for the creation and growth of your business. In today’s world of internet and technology, having a website is a good task to include in your small business startup checklist. Register a URL specific to your business name or memorable – if the URL is taken.
- Business collateral. This is the best time to create the customized letterheads, business cards, and forms with your company name, logo and website for marketing and credibility. Vista Print has several business identity products and advertising products.
- Accounting. You may need an accountant depending on how large your company will be, filling out tax forms based on your business structure, chart accounts, e.t.c. Regardless, it is good to establish proper accounting procedures.
- Mentors. A wise person once said that mentorship is like riding on the shoulders of experience. Identify where to get help and where to get advice including other sources, such as attorneys and accountants, even Google to assist you with specific questions about your business.
- Business insurance. Your business may need a professional liability insurance or a general business insurance from an insurance provider. As for corporations and LLCs with employees, owner needs unemployment and workers compensation insurance.
- Maintenance. As a new owner just treading new ground, you will need to write down the requirements for maintaining your company’s status. Remember that few business structures require annual filing, including the registered agent fees. Find out what legal and local requirement that needs to be satisfied monthly or annually to keep your business going.
