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Starting a Business is Easier Than You Think

Check Out My Guide to Getting Started



The biggest mistake I’ve made as a business owner was not starting my business sooner. Starting a small business takes a little effort, but the truly legal aspects of it, are very simple. I’m going to walk you through the steps for how to create a single member LLC which is how my business is structured.

Choose a Name

For some people, this comes easily. For others, this really is the hard part. But the first thing you have to do is pick a name. Some things to think about when you’re choosing a name are:

  1. Is it available as a URL or domain name you want? You can check here: https://domains.google.com)

  2. How might people abbreviate it? Are you okay with those abbreviations as ways to refer to your business?

Reserve Your Name

Don’t get too attached to that name yet. Depending on your state, you will have to check name availability and register your business. The link to check this and reserve in Indiana is https://www.in.gov/dor/business-tax/register-a-new-business/.If you live in another state, it’s as easy as typing “Register a business in insert your state here” in Google.

Create Articles of Organization

This step is essentially done for you in Indiana as you do the registration with the state. You will identify your registered agent as you complete the form in Indiana and a copy of articles of organization are created. If you live in another state, look for the steps to appoint a registered agent and file articles of organization.

Create an Operating Agreement

Businesses have rules. You get to write yours. These are written in the form on an operating agreement. I didn’t do this right away but have an agreement now as I’ve continued to learn more about running my own business and protecting my assets for the long run.

I’ve been using a Rocket Lawyer annual membership since I started the business. Keep in mind that this is NOT actual legal advice. However, you can ask an actual lawyer legal questions which has been invaluable for me over the last year and a half.

Get an EIN Number

Your EIN Number is essentially your business’s social security number. You’ll use it to get paid and to pay your taxes. This is probably the hardest part of the entire process and still took me under an hour. You will, in most cases, be able to receive an EIN immediately. BE AWARE - You’ll be shown the EIN on screen and be able to download a letter with the EIN but once you close that window it’s gone so write it down, save it, print it, etc. Just don’t think you’ll ever be able to find it again. Here is the IRS site for applying for an EIN number: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

Open a Business Bank Account

In the steps above, you’ve collected the following:

  • Business Name

  • Articles of Incorporation

  • An EIN Number

Now, it’s time to get a bank account. My business didn’t require any significant capital to open - just enough to keep my bank account open until I started getting paid for work. Make an appointment with your banker to see what you need to bring with you and how much money you’ll need to open your business account. In a future post, I’ll talk about the Profit First methodology that I use to manage cash flow and profit so I always know I’ve got enough for expenses, payroll, taxes, etc.

Do You Need Other Operating Permits or Licenses?

My business is simple so I don’t require licenses or permits to do business. However, you’ll need to do some research into your particular business area to understand what permits or licenses are required. This is, potentially, very costly so make sure you do your due diligence here.

Do you need to register for state taxes?

Do the research here to determine if you need to register for state taxes. In Indiana, you go to the same site where you register your business to do this work.

What does it all cost?

Domain name registration typically costs anywhere from $10 and up per year. I have always stuck with domains in the less than $20 a year range.


Registering a business in Indiana cost less than $100 in 2022.


Creating a formal operating agreement with a lawyer, you can pay significantly for that. I used Rocket Lawyer which is less than $300 a year if you do an annual subscription. My business is very simple and I’ve been able to use the Rocket Lawyer membership in a load of other ways throughout the year to get some things in order and get answers to questions. It’s not true legal advice but for this purpose it’s adequate for me.


The business bank account will require a little money at least to fund it - so I’d estimate anywhere from $100+. Definitely check with your bank on this step.


Licensing and permits vary by occupation, state, and more. This one can be anywhere from $0 to thousands of dollars. Do some research about your chosen business to learn more about what’s required.


I also subscribed to a website provider (about $250 a year), got an email address (about $80 a year with Google Domains), and had a logo designed and business cards made (about $200 total).


And, remember to keep all of these receipts because they are all business expenses that you’ll need for your business taxes.

Want more content like this?

This is a piece of content I developed for an expanded module in my signature course The Facts of Life Book. The course covers gathering and organizing information for all of life’s most important moments. Buy now using code FRIEND1 to get the full version of this extended module and much, much more as soon as it releases in late August.


 

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