Starting a business? Here’s a helpful checklist.
The decision to start your own business is momentous, and while it’s exciting, it can be intimidating, too. There’s a lot to consider and a lot to do — including some important tasks you might not even know about.
Don’t let that stop you from making the leap, though. There are plenty of resources available to help you take the right steps, make the right decisions, and give your new business the right foundation. We’ll touch on a few of those things below, but here are a few guides and checklists you might find useful for more detailed information:
- U.S. Small Business Administration (SBA) guide
- MyCompanyWorks checklist
- Small Business Trends 30-point checklist
- IRS checklist
First things first
Should you start a business? To answer that question, you’ll need to do some research in order to identify the opportunities — and challenges — in the market you’re considering. Who would your customers be? Who would your competitors be, and what differentiates you from them? What investments would you need to make to get things off the ground?
Once you’ve determined that your idea for a business has solid potential, it’s time to create a business plan. As the SBA puts it, this is your “roadmap for how to structure, run, and grow your new business.”
You can take a traditional approach, which includes a lot of detail — this is typically the route to take if you’ll be seeking financing or investors. Or you can create a “lean” plan, which features key elements. The most important thing is to create a plan that fits your unique needs.
A few other things to think about during the planning process:
Your structure. You have several choices for the legal setup of your business — a sole proprietorship, C- or S-corporation, or a limited liability company (LLC). There are benefits and drawbacks to each; for example, a sole proprietorship is very easy to set up, but doesn’t shield your personal assets from liability. While a corporation or LLC can be more complex to form, they provide greater protection along with other advantages.
Your name. This is about more than thinking up something catchy, descriptive, or memorable — you’ll want to make sure the matching web domain is available before you file the documents to create your business.
Your location. Are you going to open a physical storefront, office, warehouse, etc.? You need to research cost and availability, but also consider the impact your location can have on taxes and legal requirements. That includes sales tax, too!
Your EIN, licenses, bank account, etc. When you set up your business, you (or the professional assisting you) need to file the appropriate paperwork with government agencies. Depending on your structure, you might also need to apply for an Employer Identification Number, as well as any required licenses and permits — including a sales tax permit, if necessary. And you’ll want to open a business bank account, which requires an EIN.
When you’ve got the basics covered, you’re ready to tackle issues such as funding, record-keeping systems, equipment purchasing, finding business insurance, creating a logo, getting business cards and letterhead, hiring employees, and everything else that comes with starting a business. (We told you, there’s a lot to do.) And don’t forget about marketing — because after you put all this work into building something great, you need to make sure your potential customers know you exist.
At Avalara, we’re always excited to work with new businesses. You’re going to have a lot on your plate, and dealing with sales tax issues can take time away from the things you need to do to grow and succeed. You can check out our solutions here. In the meantime, good luck on this new journey. There’s a lot of work ahead, but a lot of rewards, too.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
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