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Not everything about running a business is glamorous. There are boring tasks, such as setting up an EIN and filing taxes, that you need to complete before you can even start making money. However, these steps are important—and they're not very hard to do! In this guide, we'll go over the most important things that you have to do when starting a business (and highlight some of the ways in which they differ depending on what type of company it is).
Name Your Business
The first step in naming your business is to choose a name that’s easy to remember and spell. Choose a name that isn't too long, as this can make it more difficult for customers to recall. In addition, make sure the name you choose isn't already being used by another company or business.
Finally, choose a name that doesn't confuse people or offend them with its meaning (for example, don't pick something like "Happiness Clinic"). You can check if there are any trademarks available for your selected name by searching online at www.uspto.gov/trademarks/.
Obtain an EIN
EIN stands for Employer Identification Number, and is a number provided by the IRS to businesses in order to identify them. It’s also known as a Federal Tax ID Number, and it’s used by your business on all tax forms. If you’re planning on adding employees or paying people who work for you as independent contractors, then an EIN is necessary in order to ensure that they are being paid properly.
In order to apply for an EIN, start by visiting the IRS website at irs.gov/ein-tax-id-numbers/. From here, follow the prompts until you reach an application page where all of your information will be entered into fields with dropdown boxes that automatically populate from information that was entered previously (such as name and address). Then just click submit!
Choose the Right Structure
When you start your business, there are a few structures to choose from. The most common are the Limited Liability Company (LLC), Sole Proprietorship and Corporation.
LLC: Individuals can register as a limited liability company with the state and become an official LLC by filing Articles of Organization. A limited liability company has only one owner, who is called the "member." Members own all the company assets—therefore, if something goes wrong during your business operation, creditors cannot go after other members or their personal assets for payment. This means that if someone sues you for something related to your business and wins their case against it, all they can get is what's owned by the LLC itself—not what's owned by you personally or any other people involved in running it!
Sole Proprietorship: When starting out on your own as an entrepreneur without partners or employees (or any associates at all), this is probably where most people land when they decide to go into business for themselves full-time. Unlike partnerships which require more legal steps and filing fees than sole proprietorships do because there are two parties involved instead of just one person signing contracts etc..
Corporation: A corporation is a legal entity that is separate and distinct from its owners. Corporations are created by state law and have many of the same legal rights and responsibilities as individuals. Owners of a corporation are called shareholders. The shareholders elect a board of directors to oversee the corporation's affairs. The board of directors hires officers to run the day-to-day operations of the corporation.
Begin Paying Estimated Taxes
The Internal Revenue Service (IRS) requires all businesses to pay quarterly taxes. These are known as estimated taxes and are based on your business' income. The first installment is due in April, with the next three installments due in June, September and January respectively.
It is important to note that if you have a sole proprietorship or partnership that was started after the 15th day of March in any year, then you must file four quarterly tax payments instead of three.
Open a Business Bank Account
Open a Business Bank Account
Opening a business bank account is the first step in setting up your company. You can open an account with any bank, but some banks are better for small businesses than others. Banks typically charge more for services to small businesses than they do to individuals, so it's important to shop around and make sure you're getting the best deal.
Open a Business Checking Account
A business checking account is useful because it allows you to invoice clients and pay bills online through your website or software program (like QuickBooks). It's also helpful if you want to accept credit card payments online, since many credit cards require that the merchant use an electronic gateway like PayPal or Stripe (which would be connected directly into their payment processing system). Opening a direct deposit from your employer can help keep your funds up-to-date so that there aren't any issues when depositing checks at the end of each month/quarter/year; however this may not always be possible depending on what type of work environment you're working within!
Other important things to do when you start a business
When you are starting a new business, there are certain things that you should do. We have provided a list of a few of these things below:
Establish your company name and logo.
Get a domain name for your website.
Get a professional email.
Conclusion
I hope you found this article helpful. Business formation is not the easiest thing to do, but it can be made easier with the right tools and knowledge. I hope you will use these tips to get started in running your own business!
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