If you decide you want to follow your dream, here are tasks to accomplish in the early days of your new company.
1. Establish an accounting process, and pick a year end date.
One approach is to purchase a desktop accounting software package. Another option is to hire or contract an accountant.
2. Select your company name.
This involves verifying that the name is available, and registering it in your state. If you would like a Web presence, check if your desired domain name is available through a service such as Network Solutions. If you plan to protect your name and/or logo with a trademark, you can check the ability to use your desired name by visiting uspto.gov.
3. Obtain the necessary business licenses and permits.
This will vary by your location and type of business.
4. Obtain an Employer Identification Number from the Internal Revenue Service.
5. Set up a Dun and Bradstreet DUNS number by visiting dnb.com.
6. Discuss your business plan with your insurance agent.
Together, determine your needs for business insurance.
7. Loans, if you need them.
Don't assume that you can easily get a loan. Take time and discuss your options with a professional financial advisor or your banker.
A. Personal Loans
Banks, credit unions and life insurance policies are avenues to explore when seeking a loan. Be prepared to have your credit history scrutinized and in many cases you'll need collateral or a sponsor.
B. Business Loans
There are three types of business loans that you may qualify for. Have all of your documents ready, including your business plan and pro forma, and speak to your banker about all available options.
If you have steady accounts receivable (AR) that are not delinquent, you may seek a loan secured by your AR. You also may seek a loan to be secured by your inventory or equipment.
If your business holds real estate, you could apply for a loan secured with real estate.
If none of the above is right for you, visit the Small Business Administration at sbaonline.org.
8. Is venture capital for your business?
Venture capital firms (VC) are an option if you are planning a high and rapid growth business in which your investors have potential to make five to ten times their initial investment. VCs usually invest between $250,000 to $2,000,000 in a company. In return they take considerable ownership of the company. They generally make their decision on the strength of the management team and the viability of the business model in the current market.
If your company does not fit this profile, that is OK. It may be better to spend your time seeking funds in other ways.
If you are interested in venture capital or recruiting angel investors, visit garage.com. You'll find some great resources online, and in addition, they conduct a seminars several times a year called Boot Camp for Start Ups.
The book, "Financing the New Venture" by Mark Long is a good primer if you're new to raising funds.
9. Select a bank and establish banking accounts.
10. If you have decided to incorporate,
you may need to set up an Operating Agreement, create Bylaws, establish a Board of Directors, distribute share or unit certificates, and many other tasks related to the establishment of a corporation. Your legal advisor can help you determine what you need to do.
11. Create templates
for vendor contracts, client contracts and other legal documents such as a Non Disclosure Agreement or Transfer of Rights.
12. Set up accounts
with a printer, office supply vendor, and other special vendors your business requires. If you're on a tight budget, you may want to check out vistaprint.com for their low cost and free business card offers.
13. A lawyer would be helpful in the following areas:
1. Establish an accounting process, and pick a year end date.
One approach is to purchase a desktop accounting software package. Another option is to hire or contract an accountant.
2. Select your company name.
This involves verifying that the name is available, and registering it in your state. If you would like a Web presence, check if your desired domain name is available through a service such as Network Solutions. If you plan to protect your name and/or logo with a trademark, you can check the ability to use your desired name by visiting uspto.gov.
3. Obtain the necessary business licenses and permits.
This will vary by your location and type of business.
4. Obtain an Employer Identification Number from the Internal Revenue Service.
5. Set up a Dun and Bradstreet DUNS number by visiting dnb.com.
6. Discuss your business plan with your insurance agent.
Together, determine your needs for business insurance.
7. Loans, if you need them.
Don't assume that you can easily get a loan. Take time and discuss your options with a professional financial advisor or your banker.
A. Personal Loans
Banks, credit unions and life insurance policies are avenues to explore when seeking a loan. Be prepared to have your credit history scrutinized and in many cases you'll need collateral or a sponsor.
B. Business Loans
There are three types of business loans that you may qualify for. Have all of your documents ready, including your business plan and pro forma, and speak to your banker about all available options.
If you have steady accounts receivable (AR) that are not delinquent, you may seek a loan secured by your AR. You also may seek a loan to be secured by your inventory or equipment.
If your business holds real estate, you could apply for a loan secured with real estate.
If none of the above is right for you, visit the Small Business Administration at sbaonline.org.
8. Is venture capital for your business?
Venture capital firms (VC) are an option if you are planning a high and rapid growth business in which your investors have potential to make five to ten times their initial investment. VCs usually invest between $250,000 to $2,000,000 in a company. In return they take considerable ownership of the company. They generally make their decision on the strength of the management team and the viability of the business model in the current market.
If your company does not fit this profile, that is OK. It may be better to spend your time seeking funds in other ways.
If you are interested in venture capital or recruiting angel investors, visit garage.com. You'll find some great resources online, and in addition, they conduct a seminars several times a year called Boot Camp for Start Ups.
The book, "Financing the New Venture" by Mark Long is a good primer if you're new to raising funds.
9. Select a bank and establish banking accounts.
10. If you have decided to incorporate,
you may need to set up an Operating Agreement, create Bylaws, establish a Board of Directors, distribute share or unit certificates, and many other tasks related to the establishment of a corporation. Your legal advisor can help you determine what you need to do.
11. Create templates
for vendor contracts, client contracts and other legal documents such as a Non Disclosure Agreement or Transfer of Rights.
12. Set up accounts
with a printer, office supply vendor, and other special vendors your business requires. If you're on a tight budget, you may want to check out vistaprint.com for their low cost and free business card offers.
13. A lawyer would be helpful in the following areas:
- Establishment of your business
- Client and vendor contracts
- Partnership agreements and negotiations
- Corporate set-up, if so desired
- Leases
- Employment and labor issues
- Trademarks, copyrights and patent issues
- Tax planning
How to Select a Lawyer:
- Contact your local Chamber of Commerce or professional associations for a referral
- Check out lawyer candidates at MartindaleHubbell.com
- Check status of your lawyer candidate with the local chapter of the American Bar Association, or the national office at (312) 988-5522.
14. An accounting professional would be valuable in the following ways:
- Understanding of the consequences and benefits of each business form (i.e., C Corp, S Corp, LLC, etc.)
- Set up of an accounting system and procedure
- Tax planning
- Preparation of tax documents
- Payroll issues
- IRS audits
We've listed some of the tasks you may address when you decide to work as an independent contract, or form your own business. We urge you to find professional advisors to guide you through this new territory successfully.
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