Once you’ve decided to start your business, you can get the legal stuff done really quickly. A few years ago, I started High Value Publishing, a digital marketing agency. Everything in this list took less than a day.
The Legal Stuff
(Disclaimer: I’m not a lawyer, so none of this is considered legal advice 🙂
That being said, you want a corporation of some kind. You don’t want to start your business self-employed. There are multiple reasons for this, but liability protection is one of the main reasons why you want separate legal entity from your personal (general) liability.
This article covers the 5 high-level steps of setting up your own corporation.
- Choose a Business Name
- Find a URL that fits your name.
- Apply for your LLC.
- Get a Federal EIN (employee ID Number).
- Setup a business bank account.
1. Choose a Business Name and URL
The idea here to pick a business name that requires very little explanation. I chose High Value Publishing because I wanted to help publishing companies and authors achieve higher market valuations. And the URL (step #2) was available.
2. Find a URL That Fits Your Business Name
I typically look for the .com. Yes, you can always start with alternative domain extension (i.e. .net, .org, .guru, etc.), but .com is where you want to start. I had a bunch of sites on BlueHost, so I registered for my domain there.
Some ways to check for a unique URL:
- GoDaddy you can check the basic domain extensions (.com, .net) and the new extensions (i.e. .guru, .io, etc.)
- BustaName – Helps you find a unique URL name based on keywords.
- namecheckr – Checks to see if the URL is available on various social sites (i.e. Facebook, Twitter, etc.)
Important Note: Some domain registrars will automatically renew and others will not. If you start using your domain name, you’ll love having it automatically renew. The last thing you want is for your domain to expire and someone grabs it. I have purchased domains on BlueHost and SiteGround, which both automatically renew.
3. Apply for Your LLC
You NEVER want to startup your business under your own name. You will have zero legal protection and nobody will take you seriously. Besides, getting an LLC or Limited Liability Company, will cost you almost nothing. The LLC is super flexible
Look for the Secretary of State website in your state. For example, Colorado Secretary of State website had all the links to setup my LLC. I believe it was free at the time. You’ll search to see if your name is available.
Here’s the deal, you want to make sure that you can get all three (your business name, your URL, and your LLC) are the same.
Optionally, you would like to see if you can get the Facebook business page, Twitter account, and other social sites the same name as your business, but its not critical.
I also opted for a S-Corp election on my LLC, which you must do within 30-days of starting your LLC. The S-Corp election is ideal for a service type business, like consulting, and can save you money on payroll taxes.
Should you use an online service, like LegalZoom, to do all this? You can. I did for a previous business. But, you’re not going to get any more service than what you’re getting on this blog post for free. Trust me, you don’t need it.
4. Apply for your Federal Employer ID Number (EIN)
Get your EIN. It’s free. You can get it immediately online. It’s the ID for your business. Anything related to forming your business you will use your EIN and not your social security number.
Your business is a separate legal entity from your personal stuff. Got it? Good.
5. Setup a Business Bank Account
All of your business expenses should be run through a separate bank account from your personal account. Let me repeat this. Your business and personal expenses need to be tracked separately from the very beginning. Anything less is amateur hour.
Go to your bank of choice. Show them your LLC Articles of Incorporation and your EIN documents, a driver’s license and your initial deposit. That’s it.
You should walk out of the bank with some blank checks and a debit card.
If you setup your new business bank account, go buy yourself a coffee with your new business debit card and start working on your startup business plan. That coffee is a business expense 🙂
You can also apply for a business credit card with the same info.
6. Setup Your Accounting
I use Quickbooks Online (QBO). I’ve been using it for years and most CPA’s are very familiar with it. Your CPA will be able to login, grab the data they need and quickly do your taxes. I also use Quickbooks Online to do my payroll. There are other online accounting application, but I haven’t used them.
You’ll be able to connect your brand new bank account to Quickbooks, automatically import the transactions, reconcile your account, etc. That’s the main accounting activity you’ll be doing.