You’ve decided to start your own business, congrats! It’s going to be a fun and exciting journey. In this post, we discuss the steps to get your business out of the starting gates. You will need to go through several steps to get your business legally open and ready to go. Your business will need a bank account and some basic financial reporting. You should get together a few key business contracts so you can respond quickly to opportunities. Lastly you need to figure out where you and your team will work from.
Let’s jump into the basic steps needed to get your business open. First off you need to come up with a name and register in your home state and possibly the city you work in. You should complete a trademark search and check if a suitable web domain is available. You may need a simple Articles of Incorporation document for the registration, which you can get with a basic internet search. You will then need to sign up with the IRS and get a business Tax Identification number (TIN). You will also need to prepare an Operating Agreement for your company. If you are the only owner initially, you can probably get away with downloading something simple from the internet. If you have multiple owners, then you likely will need an attorney to prepare this. This list should be enough to get you rolling in the early days.
Once you have the business properly registered, you will next want to set up a business bank account. Running your startup out of your personal bank account will create problems in the future, we don’t recommend it. You can open an account at a big national bank like Bank of America or Wells Fargo, or you can choose a local bank in your city or an online business bank like Grasshopper Bank. Check out the fee structure and find something that fits your needs and the amount of cash you will start the business off with. Once your account is open, you will want to build a basic income statement process. You can do this through an online service like QuickBooks, or you can build a spreadsheet in XLS or Google Sheets. The concept is to categorize each item in or out of the bank account as a revenue or expense, and on the expenses add a broad category (Legal, Tech, Travel, Admin, etc). This is important as it will allow you to track the company activity for taxes, performance, forecasting, and more. Start this right away, it is a giant pain to do it later.
You will want to have a couple of key contracts ready for use by your new business. Depending on the complexity and your financial resources, you might want to use an attorney for these as well. If not, there are typically good templates available on the internet for free. You should think about some type of offer letter or employment contract for future employees or contractors. This doesn’t need to be anything deep and involved, but something you can quickly fill in the blanks when you bring someone onboard the team. You also might need to prepare a contract template for customers or business partners. In the early days, this can also be something simple. Trust us, you don’t want to be scrambling to figure these out when there is an immediate opportunity with a job candidate or customer, get these done early.
The last area you should give some thought before launching is where you and your team will work. Many new businesses start remotely, which is perfectly fine. Just give some thought on how and when you will see your team members in person, if at all. Make this intentional and not something where you wing it. If you want to take office space at a co-working or permanent office location, have the same conversation with your first employees around frequency of physical meet ups. Working these issues out upfront will help avoid confusion or missed expectations in the future.