There are 4 Steps to Starting a Business that every small business operator should follow.
There are three basic legal forms of structures for small businesses. The most common form is the sole proprietorship. In this form the owner is responsible for the business, and any debt it incurs. Many states require that any business owners operating under a sole proprietorship either use their name in the business name, or file an assumed or fictitious name certificate with the county in which they reside and operate that business. During the filing process the business owner will be notified if another business already has that name.
The second small business structure is the partnership. There are different types of partnerships. A partnership is assumed to be operation under the names of the partners. If not, an assumed or fictitious name certificate must be filed with the county, and may also need to be filed with the state depending on which state the partners reside in.
Limited partnerships require that the name include the words “limited partnership” or the abbreviation LP. The name also has to be reserved with the secretary of state’s office when the LP registers.
The corporation is the third type of small business structure. It is a formal process that involves registering with the secretary of state’s office. The words corporation or incorporated or their common abbreviations “Corp” or Inc.” must be included in the name of the small business. If it is a Limited Liability corporation the abbreviation LLC is usually used. Most states have statutes that identify which descriptions must be used.
For more information on naming a small business and what business structure to choose stop by the Small Business Administrations small business planner site, or this great online toolkit for planning a small business.
It is very important to maintain proper tax records from the start of any small business. This not only helps show if the business is growing and profitable, but helps avoid penalties and fines from the government. Many start up and operating costs of small businesses may be fully or partially deductible. Be aware ahead of time so proper receipts can be maintained. The most obvious place to look for information on maintaining tax records is the IRS.
Information on filing federal small business tax returns is also available.
State tax information can be accessed at the SBA hotlist and at this state revenue site, or check with your local representatives office.
Local tax requirements are a little more difficult to decipher. Check with your county government or local municipality, or ask for assistance from a non-profit organization such as SCORE.
Finding out what licenses or permits are needed to start a small business can be a bit complicated. There are three levels that must be considered:
For additional information on business licenses and permits read this article.
Most small businesses start with one owner/employee. Others are family run. Once a small business starts growing and the need to hire outside help arises, there are several requirements that must be met. Though this site is set up for Montana; the necessary steps are the same no matter which state you reside in. Check out the steps here
For additional information and resources on the 4 Steps to Starting a Business visit these links:
Microsoft Small Business Start-toolkit