Starting Your New Business

Introduction – This is the first video of a video series that includes 9 videos focused on how to launch a new business, how to prepare for financing a project and the various financing options that are available in today’s marketplace. Each video will be accompanied with a written summary in outline form of the content of each video with some additional explanation. If you have questions, it is best that you send me an email and I will respond to you ASAP. I hope you enjoy the series!

These are the following key steps to starting your new business listed below:

  • Pick a corporation name. If you are purchasing a franchise, you will trade under the franchise name – In all cases, it is important that you coordinate the selection of your business name with the availability of the URL with a .com address. Names do not necessarily have to describe your business service. After all, what is a “Google”?
  • Research the availability of the URL with a .com address. Purchase the website to initially launch your business – In the event of purchasing a franchise, many franchisors will provide you a website URL and some basic content. This is not the case with all franchisors. In the event, you are not purchasing a franchise, this is a critical component of selecting your business name so that your business name and website address are the same. Most customers will visit your website and even do a search of your name to learn more about you and your company before doing business with your company.
  • Get EIN # from IRS website https://www.irs.gov/businesses/small-businesses-self-employed/how-to-app... - The only instance that you will not need an EIN # is if you intend to operate your business as a sole proprietor. This is a decision that should be discussed with your attorney. If your business will be collecting and paying sales tax, you will need an EIN# and a license to collect and pay sales tax in the state you operate your business.
  • Consider professional guidance from attorney and/accountant to register your corporate on your state’s SOS website – The key hiring decisions you will make very early on in your business is your choice of an accountant and an attorney. Yes, their fees are expensive, however they will save you money and keep you out of trouble assuming you heed their advice in the long run. Most good firms will also take time to choose their clients and will often require an initial deposit to pay their initial fees until they get comfortable with billing you for their services. Accountant are either aggressive or conservative so you should choose your CPA based upon your risk tolerance. In my humble opinion, you should never sign anything until your attorney has reviewed it and your attorney should have copies of all documents you sign on behalf of the company.
  • Only list partners with good personal credit (700+ FICO score) – This does not mean you cannot have partners with <20% equity that have poor credit. They cannot be an officer, director or hold a significant management position OR a lender will require that they are included in underwriting which may lead to a declined application.
  • Select a local credit union or community bank and open a business account with no minimum monthly fees and open business debit or credit card – Most large national banks require a minimum balance, or they charge a monthly fee. Credit unions and community banks are more aggressive and do not charge fees and will often offer new businesses credit cards with smaller lines of credit. It is important to learn their credit policies because most institutions will consider your business a startup for the first 2-3 years.
  • Separate business and personal expenses. Business expenses include cell phones, internet, vehicle, business related travel such as attending trade shows – This is one of the benefits of being in business. All services and products you need to manage a business become business expenses. Automobiles, repairs, gas, travel to business related functions, internet, cell phones, computers were all personal after-tax expenses that now become pretax business expenses. Again, this is where selecting an aggressive or conservative accountant becomes important. I recommend have separate business and personal checking accounts and credit cares which is an important first step.

For additional information and inquiries, please email Paul Bosley at paul@businessfinancedepot.com.

Please visit our website https://businessfinancedepot.com/media/ to research the many financing articles we have written that have been published over the years.

We wish you much success in your business!

 

Paul Bosley, Managing Member

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