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If you want to know how to start a company, the information below will help you proceed with more confidence. Not only will you get an idea about capital requirements, but you will also learn how to set up your business legally and operationally.
According to the U.S. Small Business Administration (SBA), it takes about $3,000 for begin a microbusiness and between $2,000 and $5,000 to begin a franchise. However, that is a projected average. What you will need monetarily depends on the financing arrangements, projected cash flow, and the business structure.
How to Start a Company in the USA?
Setting up a business in the USA is usually a clear-cut process. You need to follow the steps below as well as obtain legal services or an attorney to support your set-up needs.
Perform Market Research
Maybe you currently have a fledgling idea for a company. If so, you can turn your concept into a successful business. However, you need to conduct some market research to find out if the idea is feasible. Look at the competition in your proposed location. Do people have a need for what you will be offering?
Write a Business Plan
Once you determine and believe your idea will work, you need to write out a business plan. This plan should include the following details:
- An Executive Summary
- An overview of your business concept and your business offerings
- An operations plan
- A market analysis
- The featured products and services
- Your sales and marketing plan for the business
- A competitive analysis
- The talent who will make up your management team
You can obtain much of the above information when you perform your initial research. This will enable you to establish your business and submit your plan to venture capitalists or lenders for funding your start-up company.
Fund Your Business
Next, you will need to fund your business. You need enough money to pay employees, to manage operations for at least a year, and to stock your inventory. The main thing to remember is that you need to maintain a healthy cash flow. A cash flow, just like a flow of blood, keeps your business thriving and alive.
Select a Business Location
Next, you will need to find a business location where people can easily find you. If you have a retail operation, for example, people should be able to easily spot you from the road or highway. You will also need to place signage that will grab people’s attention. If you work online, naturally, your business location will either be an office site or your home address. If you want to upgrade your professional image, you may think of getting a virtual office address in a preferred area.
Select a Business Structure
You will need to choose a legal business structure to show your commitment to owning and operating a company. Many start-ups choose to set themselves up as a limited liability company (LLC), as this company formation costs less and involves far less paperwork than a traditional corporation.
If you work as an accountant or architect, or similar professional, you may want to set up a professional limited liability company (PLLC). In either case, each of these business entities provides pass-through taxation and protects your personal assets. That means that you include your taxes on your personal income tax return. Also, should anyone sue your business, they cannot come after your home or car.
Decide on a Company Name
Before you start your business, you need to choose a company name and check with the Secretary of State’s Office about the availability of the name. You cannot have a similar name to a competitor, as it can cause confusion in the public eye.
Select a couple names you want to name your business, so you have a back-up name available if your first name choice currently does not exist. By using the services of a competent business lawyer, you can also iron out any details about trademarks or copyright infringement.
If you choose a company name for an LLC, you will need to include the letters, “LLC, or a reasonable representation after the business’s name. For example, you might name your business Jones Heating & Cooling, LLC, or add “Limited Liability Company” after the name.
The same holds true for selecting a company name for a corporation. You must add “Corporation,” “Corp.” or “Inc.” after the chosen name.
Check What You Will Need in Licenses and Permits
You will also want to check with your local city or town about getting specific licenses and permits. You will need to get these documents before you can operate.
Register Your Business
Next you need to register your business with the Secretary of State’s office in the state where you will do business. To register your business, you will need to secure the services of a registered agent. A registered agent must live and provide services where you set up your company. He or she, or the service, must be available during business hours during the week to receive and send your company’s mail and correspondence.
What to Include When Registering Your Business
When you learn how to start your business, you will need certain documents for registering your business online. Besides filling out the registration application, you need to provide the following:
- Articles of Organization (if you are an LLC)
- Articles of Incorporation (if you are a corporation).
- Certificate of Limited Liability Partnership (if you form this type of business)
- Business Name
- Business Location
- Registered Agent Information
- Number and Value of Shares (if you form a corporation)
How Long Does It Take to Set Up an LLC?
Because most start-ups establish themselves as LLCs, it is helpful how long it takes to set up this entity. Once you put the wheels in motion for registering an LLC, you can be up and running in as little as 10 days. It just depends on how long it takes the state to process your registration application.
How to Open a Business Account at a Bank
Once you have registered your business and established its structure, you can open a business account at a local bank. You will need to provide the bank with an Employer Identification Number (EIN) for your business so you can pay your employees and report taxes.
You can ask for an EIN from the IRS when you register your business. An EIN is designed to identify a business in the same way a social security number (SSN) identifies an individual.
Knowing how to start a company can feel intimidating if you do not know the basic steps. However, by following the above steps, you can succeed with confidence. Again, make sure you have the proper professional support in the wings when establishing a company. You should retain the services of a business lawyer and a professional accountant. You will need these services during your business set-up and after it becomes operational.
By Sam Mollaei
– I help entrepreneurs start their online business without dealing with complicated legal forms. In 2013, I took the leap to start a virtual law firm so I could help entrepreneurs start their own business and work online on my laptop from anywhere in the world (…best decision I’ve EVER made). Since then, my team and I have assisted more than 4,680+ entrepreneurs start their business and our done-for-you service is backed by more than than 2,116 5.0 Star Google Reviews from clients who love our quick and streamlined service.
Member since March, 2021
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