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Business Setup – Step By Step

If you’ve decided to build your own internet business from home rather than get a traditional job, you’re probably ready to start making money.   Business setup isn’t the first thing on your mind.  Instead, you’d rather get started building that money-making website or blog.   You can actually do that.   You probably won’t need a business bank account tomorrow, so you can start working on the process of making money before you start setting up the systems you’ll need to deal with the money once you make some.

However, very soon you need to turn your attention to your business setup.   In certain situations, before you can open a business checking account, you may have to walk through steps that will take you several weeks.  So, you should not wait very long before getting started on this process.

Business Setup Steps:

1. Choose a company name.  Make it something general, not something related to the niche you’ll initially target with your first website or blog.  Think of something easy to say and remember.
2. Dedicate a space in your home for your work and organize it.
3. Set aside a regular time, at least in the beginning, to work on getting your business going.
4. Set up a way to organize your time.  Create a to-do list and prioritize the tasks.  MindTools.com has a helpful Urgent/Important matrix to help you determine which tasks are the important ones and which ones are really time-wasters.
5. Start a list of ideas.  Once you get started you’ll begin to get more and more ideas of how to expand your business.  But you can’t do everything at once.  Put it on a list of the matrix mentioned above.  Each week set aside some time to prioritize your goals for the coming week.
6. Make sure you have the equipment you need.  If you’re starting an online business, the most important thing you’ll need is access to a computer, preferably with high-speed internet.  If you don’t have a computer that will allow you to work effectively and efficiently, and you can afford to purchase one, look at the carousel below to see some of my suggestions.  You can get internet access through your local cable or DSL company, at a local wireless hotspot (like a library), or through a wireless connection with an internet-enabled cell phone.
7. Set up a dedicated phone line for your business.  Answer this line professionally and provide a professional greeting for voicemail.
8. Find a local certified public accountant who can advise you.  If you don’t know where to start to find one, I recommend you go to Angie’s List where you can search for reviews on local CPAs.
9. Determine what kind of business model is right for you.  Harvard Business Services offers a helpful chart showing the advantages of the different options.  Click here to visit the HBS site.  While you’re there, explore the services that HBS can provide.  You may want to discuss this with your CPA or business attorney to determine if you should run your business as a sole-proprietor, limited liability company, or some form of corporation.
10. Apply for an Employer Identification Number (EIN) from the IRS.  This is free and easy to do from the IRS website.
11. Register your business with your state.   This does not necessarily need to be the state you live in.  If you set up some form of corporation, the corporation doesn’t need to be in your state.  There are various reasons why you might choose one state over another.   If you do choose to register a corporation in another state, you would register in that state and then register in the state you live as a foreign entity.  Consult your CPA for advice.
12. Acquire a state sales tax ID in the state where you registered your business, if necessary.  Not all states collect sales tax.
13. Obtain a county and city business license if you are registering as a sole-proprietor.  Do an internet search to find your local office and find out what they require.
14. Set up some form of bookkeeping.  I have used both Quicken and QuickBooks and recommend them both.  There are other good software solutions available, or you can keep books the old paper and pencil way.
15. Open a business bank account.  Keep your business and personal finances separate, even if you are setting up your business as a sole-proprietor.  You’ll be glad you did when you have to fill out your tax return.
16. Obtain a business credit card (optional).
17. Set up a separate Paypal account for your business.  Some businesses pay affiliate commissions directly to Paypal and some customers may wish to buy your products using their Paypal accounts.  You can also make business purchases with this account.
18. Prepare your computer to keep your information safe.  This is especially important if you plan to create an email list or sell to people directly from your website.   If people give you their email addresses or other contact information, they’re trusting you to keep their information safe.  Make sure you do.  You may need to upgrade your computer security.  I recommend you contact Invisus Risk Management.

Each of these steps will take very little time to finish.  Completing them all, though, may take you several weeks.  So, in addition to setting up your money-making website or blog, set aside some time each week to focus on your business setup.  Organize your time, your office, your projects, and get your systems in place for appropriately receiving and tracking the money you’ll make.

I’ve put together a CHECKLIST for you.  Fill in the form below.  You’ll receive a link so you can DOWNLOAD the list right away.