It’s easy enough for anyone to start a business. But getting legal recognition and laying down solid foundations for success is a completely different thing altogether.
Many small businesses (including freelancers) an have trouble surviving their first year or even simply getting off the ground thanks to an abject lack of planning or outright incompetence. Others try to get by, but stick to the shadows – either by not registering their business at all, or by underreporting their income to the IRS. Many get away with it, and many don’t.
With, with both the IRS and state tax auditors cracking down on small business tax cheaters, you probably really want to avoid the consequences of not reporting your income. Tax evasion was how they finally nailed Al Capone, after all.
As the old saying goes, the only inescapable things are death and taxes. And it’s actually a good thing auditors do a mostly good job. While the specifics are debatable, taxes theoretically do a load of good for all businesses. They help build the necessary infrastructure that private groups would not likely willingly provide in sufficient quality, such as the roads and public transport systems you and your employees enjoy, the public education that keeps you from having to deal with illiterate people on a daily basis, among other things.
Great! You’ve finally decided that:
A.) You actually want your business to succeed
B.) Jail’s probably not the best place to pursue your entrepreneurial dreams.
Congratulations! You are now ready to start your business – the legal way. ContactMe blog’s created an awesome infographic checklist on legally establishing your business for all you budding entreps and freelancers. While this is intended for American entreps, our non-American readers should still find most of these applicable:
To Sum Up:
1.) Research and plan your business
2.) Seek assistance from a mentor or qualified experts
- ALWAYS get a lawyer and a CPA. Good ones will EARN you money, and you’ll avoid breaking the law and leaving money on the table.
3.) Choose a location
4.) Acquire funding
- Personal savings
- Bank loan
- Angel investors
- Friends and family
- Financing firms
- Venture capital
- Federal and state loans
5.) Choose your business’s legal structure
- Sole proprietorship
- Limited Liability Company (LLC)
- S Corporation
- Non profit
6.) Register your business name
7.) Get a Tax ID Number/ Employer Identification Number (EIN)
8.) Register for state/city/etc taxes
9.) Obtain business licenses and permits
10.) Hire employees
What other tips can you share? Comment below!