Many of us have burning deep within the heart of an entrepreneur. We have ideas, elaborate designs and dreams to be the next business that hits the ground and take America by storm. Becoming that household name that everyone knows, children singing our jingles and our phones ringing off the hook from those that want or need our goods or services. The vision is clear, eventually we will become our own boss, so now that first step must be taken!
But before you go and dump your 401k into that business that will be an ultimate success, make sure that your business is right.
What do I mean when saying make sure your business is right? Let’s break down to it’s purest form for you. Sure you’ve got the name, but to open a business takes a lot of not only preparation but the necessary documentation:
- Make sure that the business you are opening meets zoning requirements. Sure, you are going to start your business out of your home, but if you are going to get the license to start it, they are going to ask you to make sure your home is zoned for that type of business. This may include visiting the Fire Dept or the Zoning Dept to make sure it is. Then there is a fee for the application you will have to complete.
- Is the business an LLC, Corp, S-Corp, Partnership, or Sole Proprietorship? Each one is very important, so visit sites like legalzoom.com to get a clearer understanding of what kind of business you will have.
- If it is one of the above, have you filed with the Secretary of State in your respective state? This is needed so businesses can find you, as well as yearly reports to be filed with S.O.S
- Have you filed for taxes? Many people when starting a business will file on their individual tax return, because they have not submitted for an EIN (Employer ID Number…oh, you haven’t contacted the IRS for that yet?) This can only last for three years, and certain requirements as well to do that…ask your tax preparer what these are also. Also note, your taxes are not just for Uncle Sam, you have to pay State Tax as well as list your business in your respective county that you reside in, especially if you’ve taken the time to get a business name, business license and file with S.O.S. Failure to file with the county will result in discovery of your business and you billed for taxes for past years you’ve been operating, with penalties added!
This is just a few things that many business owners neglect to do. So before you run out and get your business cards and website created, research each item listed for your respective state and county. A little reading and review now will save you dollars and headache later!