September 6, 2011

The Business…Continued So now that I have decided on my business structure, (LLC or Sole P) I chose LLC, I can now move forward with the whole process.  Next Step: Apply for an EIN number.  (Employer Identification Number or Federal Tax ID number)  This handy little number is what you will need for the next several steps and beyond and having this number basically shows that you have made the proper steps into building a business.  Also, this is the magic number that will allow for you to purchase materials WHOLESALE!  You apply for the EIN online with the IRS at: IRS.gov It is free, but you will need to fill out a survey asking questions about your business such as- What is your business structure (which now you will know), what kinds of goods are you selling, are you selling explosives?, have you ever owned a business before? … most of these questions are things you already know.  I found it to be no sweat, but if you do get stumped- you are online so google it. *Very important, keep your EIN in a safe place and NEVER give it out.  Next up is acquiring your assumed name.  You do this at the local courthouse in the state and perhaps even county you will have your business.  An assumed name certificate is an official document stating that you are the only one in the state that is doing business with your business name.  For instance, in my case, nobody else but me can have a business named Laura Wood Studios.  You need this because any other step you take will require to know that you have made sure you are the only one.  It costs about $20.00 and you will need to keep the notarized document in a safe place and you will need a copy on hand…(we will get tho that in a bit.) The third step in this process is finding out what sales permits are required in your state of residence.  I have started mine in Texas and they seem to have strict guidelines for starting up a business.  I applied for this online at Texas.gov but it will be different in every state.  Just look for links that say, starting a new business.  This will be a simple form asking the same questions the IRS did when filing for the EIN.  It is also free.  But you will have to print out a document to mail in for official reasons.  Keep a copy of this too. This permit allows for you to be legal if you ever plan to sell in the front of a store/parking lot/ or any other public place (even if you have permission from that business). I am not sure though if this works outside of the state you have the business.  Fourth* Optional/ This step is only for those who intend to start an LLC.  You will need to visit the Secretary of State (in your state) website and file to be an official LLC.  This cost $300.00 (in TX). Yes, quite a fee, BUT you do not have to file this right away, you just have to make sure to do so at least a month before you file your taxes.  What happens if you forget?  Then you default to a sole proprietorship- it is not the end of the world.  Also a good thing is that you can write this fee off as a business expense!  Fourth Step (or Fifth for the LLC people) is getting a separate checking account for your business money.  You absolutely HAVE to keep your business and personal finances separate.  This all goes back to taxes.  Also, this will help you understand where your money is coming and going.  You do not necessarily have to get a business checking but if you plan to have an online store like me then you will need it to start a merchant services account (this allows for you to take credit card payments).  Also, you will need to present your EIN #, State sales permit, and the assumed name certificate in order to start the business account.  You will also need a little start up money to open the account.  Many banks are different, I chose one that will not charge me a monthly fee but they do take $100.00 a month and deposit this into my savings.  No biggie though because you can take this right back out a put it back into your checking.  These are the next few steps if you plan to start a business-this is all based on my personal experience and I definitely recommend if you are thinking of heading this direction to find a counselor who can aid you through the confusing parts.   There is still more to come! And I do plan to tell you all about the sneaky pesky parts you do not think about when in the zone of getting things done! Thanks for reading!!!

The Business…Continued

So now that I have decided on my business structure, (LLC or Sole P) I chose LLC, I can now move forward with the whole process. 

Next Step: Apply for an EIN number. 

(Employer Identification Number or Federal Tax ID number) 

This handy little number is what you will need for the next several steps and beyond and having this number basically shows that you have made the proper steps into building a business.  Also, this is the magic number that will allow for you to purchase materials WHOLESALE! 

You apply for the EIN online with the IRS at: IRS.gov It is free, but you will need to fill out a survey asking questions about your business such as-

What is your business structure (which now you will know), what kinds of goods are you selling, are you selling explosives?, have you ever owned a business before? … most of these questions are things you already know.  I found it to be no sweat, but if you do get stumped- you are online so google it. *Very important, keep your EIN in a safe place and NEVER give it out. 

Next up is acquiring your assumed name.  You do this at the local courthouse in the state and perhaps even county you will have your business.  An assumed name certificate is an official document stating that you are the only one in the state that is doing business with your business name.  For instance, in my case, nobody else but me can have a business named Laura Wood Studios.  You need this because any other step you take will require to know that you have made sure you are the only one.  It costs about $20.00 and you will need to keep the notarized document in a safe place and you will need a copy on hand…(we will get tho that in a bit.)

The third step in this process is finding out what sales permits are required in your state of residence.  I have started mine in Texas and they seem to have strict guidelines for starting up a business.  I applied for this online at Texas.gov but it will be different in every state.  Just look for links that say, starting a new business.  This will be a simple form asking the same questions the IRS did when filing for the EIN.  It is also free.  But you will have to print out a document to mail in for official reasons.  Keep a copy of this too. This permit allows for you to be legal if you ever plan to sell in the front of a store/parking lot/ or any other public place (even if you have permission from that business). I am not sure though if this works outside of the state you have the business. 

Fourth* Optional/ This step is only for those who intend to start an LLC.  You will need to visit the Secretary of State (in your state) website and file to be an official LLC.  This cost $300.00 (in TX). Yes, quite a fee, BUT you do not have to file this right away, you just have to make sure to do so at least a month before you file your taxes.  What happens if you forget?  Then you default to a sole proprietorship- it is not the end of the world.  Also a good thing is that you can write this fee off as a business expense! 

Fourth Step (or Fifth for the LLC people) is getting a separate checking account for your business money.  You absolutely HAVE to keep your business and personal finances separate.  This all goes back to taxes.  Also, this will help you understand where your money is coming and going.  You do not necessarily have to get a business checking but if you plan to have an online store like me then you will need it to start a merchant services account (this allows for you to take credit card payments).  Also, you will need to present your EIN #, State sales permit, and the assumed name certificate in order to start the business account.  You will also need a little start up money to open the account.  Many banks are different, I chose one that will not charge me a monthly fee but they do take $100.00 a month and deposit this into my savings.  No biggie though because you can take this right back out a put it back into your checking. 

These are the next few steps if you plan to start a business-this is all based on my personal experience and I definitely recommend if you are thinking of heading this direction to find a counselor who can aid you through the confusing parts.  

There is still more to come! And I do plan to tell you all about the sneaky pesky parts you do not think about when in the zone of getting things done!

Thanks for reading!!!

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