Three Key Things to Start Your Business on the Right Track

This month our theme across our blogs is “Planning/Starting Your Business”. To kick that off here on Grow Smart Business, we have a guest contributor, Richard Greenberg of “State of the Startup” to give some great advice on starting up.

So you’ve decided to start a new business? Congratulations! Let’s be sure you start on the right track in your endeavor.

First, we will assume you already have your idea, you product, service or profession. And moreover, let’s assume you already have sufficient capital (money) to create your business, and last long enough to pay your personal iving expenses and the costs to run your business until profitable. If you are single, this can be tough, if you have no other source of income. If you are married, and your spouse or significant other has a steady job, this usually makes things much easier and less stressful.

Where do we go from here? Well, having just your idea or product does not make a business. You need to consider these 3 key things:

1. Company Name: There are several local, state and federal agencies where you should check to see if the desired name for you business is already in use. The County Clerk-Recorder, the Secretary of State, the Federal TradeMark office, are most important. Looking on Google, and checking domain URL availability is not an official, legal check of business name use. If you are simply using your own name, such as in freelancing, then searching name availability isn’t typically necessary.

2. Type of Business Structure: From the simplest Sole Proprietorship, to the more complex Corporation or LLC, any business needs to be officially established, founded and registered with the local or state government. Just saying you have a new startup company holds no clout legally nor financially unless your venture can show verifiable existence through some government department as proof. Yes, this includes paying filing fees, though they are often modest. In some areas, $25 gets your business registered, and in others, it may cost $200 to $300.

3. Address: For the registration of your enterprise, no matter how small, you need a physical address to indicate to the government. You don’t need a huge live/work loft or high-rise office. Even just a co-working space at one of many shared office spaces around the country would be sufficient, as long as they allow you to receive mail there.

Once you have these 3 items completed, which can take a week to ten days in most cases, you’re solidly on your way. Other items which would then need to be attended to typically are:

• Obtain a Federal Tax ID
• Open a Bank Account
• If hiring employees, open the state and federal employer ID/Withholding Accounts and Unemployment Insurance
• If selling merchandise, obtain a State Sales Tax/Reseller permit

Remember, not all ventures start out complex and costly. The simplest and least expensive scenario is the Sole Proprietorship, where you yourself run all aspects of the business and perform all work personally. Then, as your product or service needs grow, change the business structure, move into bigger headquarters, hire employees and then the sky’s the limit!

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Richard Greenberg is a startup advisor in San Francisco CA, founder of SeedPort and www.StateofTheStartup.com , and has over 20 years experience of business formation, management and speaking.

His specialty is working with California-based companies, Corporate, LLC and Nonprofit startups. Prior to SeedPort Inc, Greenberg was founder and CEO of CaliforniaCompany.com, a startup service provider which operated between 1999 and 2006. He is on twitter at @RGreenberg

This entry was posted on Friday, January 8th, 2010 at 8:00 am and is filed under small business. You can follow any responses to this entry through the RSS 2.0 feed.


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