Starting a new business: Your Step-By-Step Guide

I recently had a new client that wanted a logo, and then a website, and then a bigger website, and then help with marketing. This is a normal progression with new businesses as they wet their feet into what is truly necessary to launch a business.

This new client was a brand new business, and super eager to get started – as we all are in the beginning. Their pace at putting things together was frantic, manic, and bless them, a little chaotic. Trying to get everything done all at once, with many balls in the air. For the most part they were doing everything right, just disorganized, and worse, finding service based businesses that were…not good…and hard selling services they absolute did not need.

Downright fraudulent.

When my new client finally found me, I helped them navigate the digital side of their business so they could fully concentrate on their actual business and get the tools, van, and customers while I handled their online presence, branding, and making sure their Tiny Site website set them up for success. By stepping in when I did, I saved them nearly $3000 from overcharges by other vendors – or getting them refunds from work/services they didn’t need.

Starting A New Business The Smart (less-hassle) Way

Let’s be real, starting a business can be overwhelming. There’s a lot to figure out, and sometimes it feels like everyone’s trying to sell you something you don’t need.

They are. Use caution.

Embarking on the journey of starting a new business is an exciting endeavor. However, for many aspiring entrepreneurs, the initial steps and requirements are overwhelming. This guide aims to provide a clear and concise roadmap to navigate the process, equipping you with essential knowledge to launch your business successfully – without being ripped off. You can do a lot of it yourself if you just know what to do, and where to go to do it.

First things first: Getting your ducks in a row

Before diving into formalities, it’s crucial to solidify your business concept and understand the market landscape. Let’s make sure you’ve covered the basics:

The Nitty Gritty of Starting a New Business

Let’s begin!

Much of what I discuss here may be specific to Texas. However, I will provide you with applicable search terms to find this information for your state. The information is provided in the order in which it should be done. Where necessary, further articles will provide detailed specifics or explanation.

I’ll assume that you have a new business idea, have brainstormed and researched the viability of your business idea. You’ve researched your target audience or ideal customer, understand their needs and how your business model fits, and have done a bit of competitive analysis of your competition to identify opportunities and potential challenges.

Navigating Business Name Registration

If your business is based in Texas, utilize the Texas Secretary of State website to search for name availability and then register your chosen name with the state. A nominal fee ($1) applies for each trademark (name) search. Once you’ve determined your name is available, register using the online form.

For those outside of Texas, similar resources are available through your respective state’s business or commerce website. Use the search terms “business name registration” and your state’s name. Skip over all the providers that “do it for you”, and find your state’s official website.

• Registering your business name with the state protects that name at the state level.

• If you structure your business as an LLC, Partnership, or Corporation, the name is automatically registered (when you apply) along with the business itself and the state will provide the search for legal rights to use it.

Important Note: Avoid third-party services offering to register your business name for exorbitant (and hidden) fees. State resources are readily accessible and user-friendly, allowing you to complete the process independently and cost-effectively.

Helpful Advice: While you’re picking your new business name, run it through a domain name registrar to see if it is available as a website name. If you’re on the fence on exactly what to call your business, this may be helpful narrowing the options down. If the perfect name is available, buy it, otherwise, wait until you speak with your web developer. Remember, the shorter the name, the better.

Do you need to register your name as a trademark?

Names hold power in business. So establishing ownership of and rights to a business name is an important step for businesses that want to ensure a name remains one-of-a-kind. Registering a trademark helps protect a name or brand from intellectual property theft or misuse as a business grows.

But do small businesses need a registered trademark? The quick answer is no. If you do not plan to go national, or multi-state, then the registration you do at the state level is enough. A simple trademark is established the day you start your business and use your name and/or logo. If you want to use the trademark symbol ™, you can, but it isn’t necessary.

If you go to the expense of registering with the federal government, there is a a 6 to 12 month waitlist. Be aware there are many scams for registering with the trademark office. Only a real, local, patent and trademark attorney can help you navigate the federal system. A federally registered trademark uses the symbol ®.

What’s the difference between a copyright and a trademark?

According to the United States Patent and Trademark Office (USPTO), a trademark (™) is a word, symbol, or phrase that distinguishes your business from others – your brand. Copyrights (©) protect works of expression – creative works fixed in a tangible medium – such as the content/words on your website.

Selecting the Right Business Structure – DBA or LLC?

Choosing the appropriate business structure is crucial for legal and tax purposes. The most common options include:

• DBA (Doing Business As): A DBA allows you to operate your business under a different name from your personal name or the registered name of your business entity. This is suitable for low-risk businesses or solopreneurs. (Craftsmen, quilters, web designers)
• LLC (Limited Liability Company): An LLC provides limited liability protection, separating personal assets from business debts and liabilities. This structure is beneficial for businesses with higher risks or potential for lawsuits. (Tradesmen, financial consultants, car repairs)

A subsequent article will delve deeper into the differences between DBA and LLC structures, helping you determine the best fit for your specific business needs.

Getting Official with Uncle Sam: Your EIN

An EIN is the business equivalent to your personal social security number. While businesses with employees require an EIN, it’s not the sole determining factor. Here’s a breakdown of situations where an EIN is typically necessary:

• Businesses with employees for payroll taxes and reporting.
• Operating as a corporation or partnership for tax filing purposes.
• Withholding taxes for non-wage income. For example, if you withhold taxes for your independent contractors.
• If your business offers Keogh or 401(k) plans.
• Trusts and estates require an EIN.
• Excise tax liabilities for businesses involved in fuel sales or heavy highway vehicle use.
• Specific business structures. LLC’s that choose to be taxed as corporations or partnerships.
• Many banks require an EIN for business accounts.
• Government contractors or businesses receiving grants may require an EIN.

In essence, an EIN serves as a federal tax identification for your business. Even if you’re unsure whether you need an EIN, it’s generally advisable to obtain one as it can simplify various business operations and establish a clear separation between your personal and business finances.

An EIN number is a FEDERAL, not state, process and can be found on the Internal Revenue Service’s website. It’s very simple to set up. You’ll need your personal identification information (name, social, address) to complete the forms.

Industry Specific Taxes and Permits

Understanding and complying with tax and permit requirements is essential for operating your business legally. The specific requirements vary depending on your business type, location, and industry. Consulting with a qualified accountant is highly advisable to ensure you meet all obligations and optimize your tax strategy.

Texas Sales And Use Tax Permit – Resale Certificate for Business Purchases

All businesses within the State of Texas must apply for a Texas Sales and Use Tax Permit. Whether you sell tangible products or provide a service, the resulting work will require tax. There are some exceptions, but very few. Signing up for the Texas Sales and Use Tax Permit will allow you to sign up to the online portal to pay your monthly or quarterly sales tax.

Businesses that purchase materials for resale, in whole or in part, can obtain a resale certificate to avoid paying sales tax on those purchases. This form is signed by both you, the buyer, and the seller as an agreement between both parties that the sale is intended for resale, and, thus, the tax will be charged (and paid) by you to the end consumer. This can result in significant cost savings over time when making purchases, and the tax paid only when that material is resold. Consult your state’s comptroller office for information on eligibility and application procedures.

Business Startup Recap

As you can see, starting a new business will require some legwork on your part, but it isn’t complicated, nor expensive. With careful planning and execution, the path to starting your own business can be both rewarding and successful. By following these steps and utilizing available resources, you can confidently navigate the process and lay a strong foundation for your entrepreneurial venture.