The Latest Guide for a Practical Business Start-up
February 10th, 2017 Tags: business opportunity, Dexter Montgomery, Pamela Montgomery
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The Latest Guide for a Practical Business Start-up
The Latest Guide for a Practical Business Start-up
The latest guide for a practical business start-up gives you 5 crucial steps to follow to get your online business running.
You can assure yourself of a solid business foundation by following the latest guide for a practical business start-up.
You are not required to do anything that we recommend. It is up to you to decide how you want to run your business. However, years of experience has proven to us that it is better to put certain fundamental business structures in place to protect you, your family, and your future. Be sure to consult with a trusted advisor and an attorney as you move forward.
In this episode of My Biz Dream Team: Opportunity Wednesday Training Series we share with you our systematic approach to starting up your on-line business so that you can leave your 9-5 job and start living your entrepreneur dream life.
1. Prepare a Business Plan
Last week we discussed doing research to discover if your business idea is viable and compatible with your business personality. We hope that you took the opportunity to take the entrepreneur assessment test in Harvard Business Review: Assessment: Identify your Entrepreneurial Personality Type
This week we want you to continue researching your business idea. Then write a business plan. The data and research that you have gathered should be enough to start making projections for your business.
Do not be intimidated by a business plan. It is not cast in stone. It does provide you a guide to follow during those crucial early days after start-up. For help in developing a business plan consult with your local economic development authority or the federal small business development centers that are sponsored by the Small Business Administration.
2. Create a Legal Entity for Your Business
Creating a legal entity for your business is an important step in building a solid business foundation. As you decide on the type of legal entity to create for your business think about your business goals and exit strategy. These considerations will help you decide what type of entity is most suitable for your situation.
You should familiarize yourself with the (1) different types of company structures and (2) laws and regulations regarding them. Then choose the best one for your circumstances. Consultation with a business attorney who specializes in this area is always a great idea.
You may decide that a sole proprietorship will work for you. A single owner business is the simplest type of business formation. Just be sure to make an analysis of your risk factors.
You may also want to consider forming a limited liability company or LLC. Over the past 25 years LLCs have been used very broadly and in many different types of circumstances. The state statutes on limited liability companies offer business owners great flexibility. An LLC shares characteristics of a corporation (limited liability) and a sole proprietorship or partnership (pass through taxation).
You need to decide whether you want to go through with the formalities of forming a LLC. If you decide to form a LLC, pay close attention to the provisions of the operating agreement, if you decide to have one. If your operating agreement does not specify what happens in certain situations, you may be subject to the default provisions of the relevant state statute. Also, be sure to ask your attorney about the benefits of a “charging order” as it relates to attacks of creditors on your LLC.
3. Get an Employer Identification Number (EIN) for Your Business
After you have formed your legal entity, then you can get an employer identification number (EIN) from the Internal Revenue Service (IRS) for tax administration. You can apply online for your EIN. This is a free service.
Be sure that you have all the information needed to complete the form when you begin the online application. The online website does not allow you to save the information that you have already entered and return later.
The IRS offers many helpful tools on its website to help you through this process. These tools include a Frequently Asked Questions section and a video. We recommend that you review these tools before beginning the application process.
4. Establish Separate Business Accounts for Banking and PayPal
After you have your EIN, then you can use that it to set up your business banking account. This account should be separate from your personal business account. You should not mix the two. It only causes confusion at tax time.
You then can use your EIN to set up a separate business PayPal account that is linked to your business banking account.
When you have set up those business accounts, be sure that you are tracking your business expenses and income. In the beginning, you may want to track these items yourself. With the help of business software, you can create the various categories of income and expenses and track them. As your business grows you may want to hire a bookkeeper.
When you consult with your attorney about your business entity, ask for a recommendation for an accountant. An accountant is very helpful in giving you advice about the tax consequences of running your business.
5. Plan for a Private Space for Your Office
Plan for a private space for your office. Like many online entrepreneurs, you may start working from home. It is important to set up a separate space to run your business. If you are working at home, being able to close your door trains your family to know that you are working when you are in your office.
At first you may not be able to have a separate home office. We know people who started with a laptop on their deck. But eventually, you will want a private and separate space for your business. You will want a place where you can record your videos, podcasts, and webinars that is free of distractions.
There are also tax consequences for using a dedicated space in your home for your business office. Check with your accountant about this matter.
Conclusion/Call to Action
The latest guide for a practical start-up gives you 5 crucial steps to follow to get your online business running. Following this guide will help insure that your online business is fundamentally sound and has a solid foundation.
Remember to follow these 5 steps from the latest guide for a practical start-up:
- Prepare a Business Plan
- Create a Legal Entity for Your Business
- Get an Employer Identification Number (EIN) from the IRS
- Establish Separate Business Accounts for Banking and PayPal
- Plan for a Private Space for Your Office
Click here to get a the latest guide for a practical start-up checklist. We mentioned this checklist on the podcast.
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I am Pamela Montgomery, the attorney, author, and online business strategist working with entrepreneurs, speakers, and authors as they create the lives of their dreams and achieve uncommon results.
Also published on Medium.
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