Once you have a business idea and have created a business plan for it, the key steps that you need to take for the startup process are relatively simple.
During the business planning process, you need to think of an original business name and what time of business structure will best suit you. You also need to develop your product and make sure it stands out from your competition. This will ensure it gets the attention of your potential customers making it easier to convert them into buyers.
The business plan also needs to include the financial planning of the business and should define the roles that will be played by employees and any partners.
Start the Startup Process
Now that you have a plan, you can begin the startup process and form your business.
Register Your Company
There are quite a few options available to you as you decide to form your business. Most startups opt for a limited liability company (LLC). This is because of the personal asset protection and tax flexibility it offers. However, other options include corporations and nonprofits.
File a DBA
The DBA is the trade name for your business. It is also known as doing business as (DBA) and is an option for businesses in most states in the U.S.
Choose Your Registered Agent Services
If you don’t want to list your own address on your business formation application, then you need to appoint a registered agent. Many registered agents will also do your business formation process for you for a small fee and the state fees required.
For a fee, they will also receive all formal correspondence for your business and notify you of any compliance and tax deadlines. Some business formation services offer the first year as your registered agent for free when you opt to do your business formation through them.
Apply for Licenses and Permits
There are various licenses and permits required for different business entities if they are to comply with federal, state, and local regulations. Find out which ones your business needs to comply with and how often these need to be re-issued. You can also use a professional service to obtain these.
Find Out What Taxes Your Business is Liable For and Register
Businesses are liable for various taxes. These include federal, state, and local. If you are into retail, in most states you also need to register for sales tax. However, the most important tax number every business requires is an Employer Identification Number (EIN).
The EIN identifies your business in its federal tax filings and without it, you can’t hire employees. Also, you need an EIN to open a business banking account and to get a credit card.
If your business needs to hire employees, you must register for the Unemployment Insurance Tax. You are also required to withhold state income tax on their behalf.
Get an EIN for Your LLC
There are a few simple steps to follow before you obtain an EIN for your startup.
Form Your Business
The EIN consists of a nine-digit and unique number to your business. Your LLC needs to be registered and approved before you apply for the EIN.
Obtain your EIN for free with the LLC guide for registering your business.
How to Apply for an EIN
The fastest way to get an EIN is by applying directly to the IRS website online with the EIN Assistant. However, applications can also be made telephonically, by mail and fax.
Online applicants can obtain an EIN from the IRS between 7 am and 10 pm Monday – Friday. Once the application process is started, it cannot be saved so it needs to be filled out in one session.
Therefore, make sure you have the relevant information required because the session times-out after 15 minutes if not used. Additionally, each entity or business owner can only apply once a day for an EIN.
Relevant Information Required For Obtaining an EIN
The relevant information required for your business to obtain an EIN is a valid taxpayer identification number (SSN, ITIN, EIN) and the name of the responsible party. You will also need the business formation date and legal business name. Remember: Fill in all the sections of the application, including why you are applying for an EIN.
How Soon Will the EIN be Available?
As soon as the form is completed online, your business EIN is issued and you can open a business bank account and hire employees.
