Ready to be Your Own Boss? Part 1

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Okay, you've made it through the first round of questioning and have decided that you have what it takes to seriously consider your business idea. Great! Now comes the daunting task of going through all the details you can possibly think of that will be a factor as you move forward. There is no "one" place you can go to find everything you need to start a business. We try to cover the basics here, however, research will be needed elsewhere for your particular needs. (For instance, a local clay and pottery shop needed to install a gas kiln. Even the city didn't know how to handle its request, nor did the city have anyone that knew how to inspect the kiln once it was installed!) This article is meant to provide you a quick look at most of the items you need to consider as you move forward. It is my no means all-inclusive. I've included a few extra resources for your benefit.

Attorneys, Business Advisors, Accountants, CPA's etc.:
As much as we all hate the idea of spending money up front for professional advice, it's remains a very good idea. There are a great many things that you won't think of and your attorney, business advisor and CPA will turn out to be terrific advisors. Do your homework. Check the reputations of those you want to consider as your consultants. Get recommendations from individuals in a similar business. Check their history for legal entanglements. Interview them to see if you can talk comfortably and can develop a mutual respect. In all likelihood you will be working with these individuals for a good long time. You want to be able to trust them. Read our article called "Do you need an Accountant?"

What structure should your company assume?
It's not that easy to determine whether you are going to be doing business as a sole proprietorship, partnership, corporation, or a Limited Liability Company. ABC's has covered this topic in other articles including Choosing Your Legal Entity, and What Type of Business Entity is Best for Your Small Business. We strongly recommend that you consult with your attorney and CPA before deciding on the type of entity that best suits your business. Depending on your business product or service, choosing a simple structure in the beginning may work well which will allow you to incorporate later if it seems practical. The biggest risk in assuming a sole proprietorship or partnership is that you remain personally liable for the business finances and potential negligence. Limited Liability Companies (LLC) reduce the personal liability (as do corporations) and may seem like a good idea on the surface, but we caution you to look deeper into the legal and accounting aspects before deciding on an LLC. They can be deceptively simple and leave little room for future flexibility.

For details on the requirements in your state for corporations and LLCs, check CreateACorp.com, http://www.createacorp.com/entity_state.asp. You may look up your state and determine the filing requirements. They also offer the services of handling the incorporation process for you. Your attorney can do this as well. It's your choice.

You can also find links to individual state requirements on ABC's State Resources pages. These links will provide you access to all the small business information available in your state. Most states are very generous with start-up information and help. Use everything you can find in your state, county and city. Counties often have helpful websites, as well. Depending on the size of your city, it may also offer quite a lot of help. You'll need to know the legal requirements (such as licenses and permits) for a number of issues in your state, county and city. Your attorney should also be able to help you navigate these hurdles.

Naming Your Business:
A name can really make or break a business. If you make it too obscure people won't understand what you offer. If you make it too hokey, people will brush you off as not being a serious business. (For instance, a business opened near us named "Yummy Buns." While it's a cute name, it got more laughs than business and soon closed.) One way to begin is to name your legal entity something boring like "Smith Associates." Later, after you have analyzed your business operations and market projections, you can apply for a DBA ("doing business as"). You can have several DBA's and may trademark or service mark these names through your state, nationally, and internationally if desired. (Should I Trademark my Business Name?) ABC's offers an article on naming your business called, Name Your Company or Product in 5 Easy Steps.

Your bank will require a certificate or resolution with your legal entity name at the time you apply for a bank account. Your county clerk or State Secretary can tell you where to apply for the name. To find out if a name has already been registered nationally check the U. S. Patent & Trademark Office database (it's free!) at http://www.uspto.gov.

Where to "do" business:
The location of your business will, of course, vary depending on the kind of business or service. There are numerous options as you can imagine. For a little more detail, catch our article on Location, Location, Location. Retail businesses should be located in an area with adequate parking space and heavy foot traffic. If you locate in a shopping center, be certain you understand the terms of the lease. Find out if the tenants are expected to pay all expenses including utilities, signs, lighting, taxes, insurance, garbage, maintenance, etc., in addition to all the usual store expenses. If you're going into an office business, or an unproven venture, get a month-to-month rental agreement so that if your venture is unsuccessful you will not be stuck with future rent as you would if you were under a long-term lease. We probably don't need to tell you this but we will anyway: READ the lease. Have your attorney read the lease. Know exactly what is expected of you and what you should expect for your landlord.

Utilities:
Keep in mind that advance deposits are usually required when you sign up for Power, Gas, Water and Sewer. This depends a great deal on the agreement you have with your landlord (see paragraph above).

<<Pros and Cons of Being your own Boss

Ready to be your own Boss, Part 2>>