5 Tasks To Complete Before Opening Your Company’s Doors
The day you open your business is an exciting one. This is true whether you have a brick-and-mortar store where your neighbors will shop or an e-commerce company open to the world.
Before you swing open the virtual or actual doors to your business, though, you have a few tasks to take care of first. Here are five to cross off of your list before opening day.
1. Obtain a Tax ID Number
Your business requires an Employer Identification Number, also called a tax ID number, to hire employees and open bank accounts. The IRS has an online assistance tool to walk you through the process. You’ll need to provide information such as your name, Social Security number, address and “Doing Business As” name to get started.
Check with your state to determine whether you need a state tax ID number. Some states require them for employment and income taxes.
2. Open a Business Account
You may have already set up separate accounts for your company if you’re opening a store in your neighborhood. However, if you have a small online shop, you might not think having separate bank accounts for your company is necessary.
Many small companies need capital to get started. The funding often comes in the form of a business loan. A business loan is a good way to obtain financing without getting your personal assets in the mix. When you have a business banking account established, you’ll be ready to move forward with a Lendio business loan.
Keeping your personal and business accounts separate is a good business practice. This step can protect you and your customers. It can offer you limited liability by keeping your personal money out of your business funds.
3. Apply for Permits and Licenses
Some business actions require a federal permit. Examples include selling alcoholic beverages, conducting drilling or mining, and broadcasting over the radio or television. Check the Small Business Administration website for a list of activities that require a federal permit.
You may also need local permits from your city, county and state. States generally have a broader list of regulated industries, including plumbing, restaurants and retail. Do research to see if your business requires local, state or federal permits and licenses before opening your doors.
4. Purchase a Business Insurance Policy
While your business structure typically covers your personal assets from business losses, the protection it offers has limits. You can minimize your risk further by insuring your company.
Unfortunately, every business owner needs to prepare for a potential lawsuit. You can also face a cybersecurity or data breach. In addition, it is a best practice to have a disaster plan if your company faces theft, fire or damage from storms. An adequate insurance plan can protect you from heavy losses.
In some cases, you are required to have business insurance. If you hire employees, you must have disability and unemployment insurance and workers’ compensation. Your state may also mandate other insurance types.
A business insurance agent can walk you through your requirements and make recommendations for other insurance types that you may need, such as:
- Commercial property
- Home-based business
- Product liability
5. Register Your Business
If you conduct business under your legal name, you don’t have a legal obligation to register. However, registering your company name can open the door to benefits such as tax and legal advantages and personal liability protection.
Most of the time, you will only need to register with local and state entities. At the federal level, you may simply need a tax ID number. However, you may want to pursue getting a trademark for your business product name or brand. To create an S corp, you must file the proper IRS forms.
You put in a lot of hard work, thought and preparation for your company’s opening day. Take a few minutes to ensure you’ve done the necessary legwork beforehand. Once you’re fully prepared to do business, you’re on your way to writing your success story.
