Ready to start your business the right way from day one?
Every solopreneur wants to hit the ground running. Get their business registered and move onto the fun stuff. But here’s the problem…
What you don’t do before business registration can hurt you later. Cost you money. Cause legal headaches. Waste your time.
Fortunately, there is a solution:
Making the right decisions up front is easy and free. But it will save you thousands down the road. Competition between businesses is growing every year. Especially with 5.2 million new business applications filed in 2024 alone. Setting your new venture up properly will put you miles ahead of every other solopreneur.
This guide will cover:
- What business structure should you choose?
- Do you need a virtual office address?
- How to choose your business name
- Opening business bank account
- Setting up your taxes
What Business Structure Should You Choose?
Before getting into the nitty-gritty details of registration… Every solopreneur needs to pick a business structure. This is the most important legal choice you will make when registering your business.
Your main options are:
- Sole Proprietorship
- LLC
- S-Corp
If you haven’t guessed already. LLC stands for Limited Liability Company. S-Corp is short for S-Corporation.
These structures differ by liability, taxation and revenue limits. You will notice most businesses register as an LLC. That’s because it protects you personally if your business gets in trouble. A sole proprietorship leaves you vulnerable to lawsuits.
It’s a lot easier to register as a sole proprietor. An LLC requires some paperwork as well.
Think of it this way…
If someone sues you or your business accrues debt. Your personal bank account and assets can be targeted as a sole proprietor. An LLC creates a barrier between your personal and business assets.
Here are a few things to consider:
- How much revenue do you anticipate making?
- How much risk are you willing to take on?
- Do you have plans to expand your business down the road?
Do You Need a Virtual Office Address?
Here’s a question most solopreneurs don’t think about…
Do you have a business address?
Yes, you do. Every registration requires one. However, most businesses operate out of a home. Do you want your address published publicly on government websites for anyone to see?
A virtual office address is the perfect solution. It gives you a physical street address for registration, mail forwarding and official communications. Without having to rent or buy office space. ipostal1.com/boston-ma-virtual-address is one of many providers that lets you use a commercial business address for LLC registration and licensing. For less than the price of a monthly coffee subscription.
Here’s why this matters:
If you appear legitimate to the government, you will appear legitimate to everyone else. Banks, website hosts, potential clients and more judge your business by your address. A P.O. box or home address can lead to denials. A registered office building address puts you in a professional class of your own.
Plus with over 80% of small businesses in America now employing only the owner. Virtual office addresses have never been more popular with solopreneurs.
Look for a virtual office provider that offers:
- A real physical address
- Mail scanning & forwarding services
- Acceptable for LLC use and business registration
- Package handling from all carriers
If you wait until after business registration, you may be stuck paying fees to update your address with the state. Save yourself the headache and get it done right away.
How To Choose Your Business Name
This may seem easy… But don’t rush picking a name. Many business owners get this wrong.
Your name should be:
- Available to use in your state of registration
- Not already trademarked
- Simple to spell and find online
Before you fall in love with a business name. Search for it in your state business name database and run it through the USPTO trademark database. There is nothing worse than building a website only to find your business name is taken.
You should also consider your domain name early. If the .com isn’t available. Are you willing to swap out words or stick with your original idea? A matching domain name reinforces your brand and makes you easier to find online.
Short. Sweet. To the point. But will it scale with your business?
Opening Business Bank Account
Picking the right business banking solution is another early decision. That many new solopreneurs don’t think about. Until it’s too late.
Having a separate bank account for your business is essential. You do not want your personal and business transactions mixed. It comes back to haunt you when tax season rolls around.
When in search of a business bank account, these features are important:
- No monthly fees
- Connects to bookkeeping/accounting software
- Online and mobile banking
- No minimum balance
Keep in mind some banks will not open an account without a physical address. And that’s why getting a virtual office address early is so important. It all ties together.
Setting Up Your Taxes
Ugh. Taxes. Nobody likes them. But again, what you don’t do before registration will come back to haunt you.
All businesses operating in the United States require an Employer Identification Number. Your EIN is what the IRS uses to identify your business. Just like you have a social security number. This can be obtained for free by filling out an online application. Typically, you’ll get your EIN instantly.
Once you have your EIN. You’re ready to open a business bank account. File your taxes. And hire anyone you need.
In addition to your EIN, solopreneurs will want to know about:
- Self-employment taxes
- Quarterly taxes
- State-specific taxes
Every new business and solopreneur should have some form of bookkeeping process in place from day one. This can be as simple as a spreadsheet. Tracking your income and expenses will save you hours during tax season.
Yes, taxes are scary and complicated. But the solopreneurs who take the time to understand them will thrive.
Wrapping Things Up
This was a lot to take in. But taking care of these items before business registration is the best way to future-proof any business.
A quick review of what was covered:
- Decide on your business structure
- Get a virtual office address
- Research your business name
- Open a business bank account
- Apply for an EIN
Each of these items will take some research. But not a lot of time. Don’t rush through them either. Double-check everything to avoid costing yourself money later on.
You got this.
