How to Start a Business

*for besties

1 - Brainstorming Sesh

  • It all begins with an idea. Maybe you have the hottest new invention, want to turn your hobby into a side hustle, or want to trade corporate for passion projects. Having a vision is one of the first and most important steps in setting your new business on a clear path to success.

  • Unless you’re doing business under your name, your business needs a name of its own!

    Make sure the name you choose is available in your state and not already trademarked for use in your industry. You’ll also want to check if the website domain and social media handles are available, too!

    If you’re not ready to form your business just yet, some states allow you to reserve your business name for a certain amount of time.

2 - Choose your Entity Type

  • If you receive a 1099 from a business you provided services to, you’re self-employed, bestie! You’ll need to report your 1099 income on a Schedule C, which means your income will be taxed as a Sole Proprietor.

    Sole Proprietorships have one owner, and they’re the easiest and least expensive to set up. Partnerships have 2+ owners who operate the business together.

    Here’s the downside: if you’re the owner of a Sole Proprietorship or Partnership, you have unlimited personal liability— your personal assets are at risk if your business faces lawsuits or debts.

    That’s why your LLC Bestie recommends forming an LLC!

  • My fave, and here’s why:

    • PERSONAL ASSET PROTECTION. With an LLC, your personal assets (like your savings, car, and house) are protected from business debts and lawsuits. Unlike sole proprietorships/partnerships, an LLC separates the personal from the business, giving you peace of mind.

    • TAX ADVANTAGES. You have the flexibility to choose how your LLC is taxed. If you’re operating as a sole proprietor or partnership, you can have your LLC taxed the same way. OR you can have your LLC taxed as an S-Corp, which can potentially save you money.

    • CREDIBILITY. An LLC is a legally recognized entity that requires formal registration, which shows your commitment to operating a professional and legitimate business. Having “LLC” after your business name can enhance trust and confidence among customers, suppliers, and investors.

    I’m your LLC Bestie for a reason!

  • Corporations (C-Corps) are the most complicated and expensive entity type. Owners are called shareholders, are managed by a board of directors, and can offer stock options. On top of the additional regulations and paperwork required for C-Corps, they’re also subject to double taxation— the corporation itself is taxed on profits, and then shareholders are taxed again when they receive dividends.

    When first started out your small business, forming a corporation is completely unnecessary.

    Your LLC Bestie recommends forming an LLC.

3 - SSN or EIN?

  • If you're a sole proprietor without employees, you can generally use your Social Security Number (SSN) instead of an EIN for most purposes.

    It’s often a good idea to get an EIN anyway to help protect your SSN and simplify things like tax filings. Plus, it's free and easy to apply for one through the IRS.

  • You need an EIN for your business if you have employees, plan on paying independent contractors, open an employer checking account, set up a 401k plan, and more.

    It's free and easy to apply for one through the IRS, just click here!

4 - Register with the State

  • This one is required for LLCs. A Registered Agent is the person who will be responsible for receiving the legal mailings for your business. You can hire a third-party company to be the registered agent, or you can be the registered agent yourself (for free!).

  • You need to file with your state’s business registration division to form your company. Depending on your state, this is either called a Certificate of Formation, Certificate of Organization, or Articles of Organization. You can hire a company to do this for you or do it yourself online. Each state has their own filing fee and timing for formation.

  • Depending on your state and the nature of your business, you may need to register for state taxes, including sales tax or employer taxes. You can do this right online, too!

5 - More Legal Requirements

  • An Operating Agreement outlines the ownership of your business, the management structure, and the operating procedures. You need this if you form an LLC. There are SO many free templates available out there so it’s definitely something you can DIY. Operating Agreements can be long (5-10 pages) or super short (like a 1-pager) - it’s totally up to you!

  • This step completely depends on the type of business you’re operating. Will you be selling physical products or digital? Will you have employees or a storefront? Are you a food handler or professional service provider? The list goes on and on, so research is a must. Don’t forget to check zoning requirements for your business location, too.

  • Most states require you to file a compliance report for your business each year (or every two years). There may be a filing fee for this as well (amounts vary by state). Annual reports are required to keep your business in good standing, so make sure to mark your calendar (you’ll get a letter in the mail to remind you, too).

    *LLCs— don’t forget to report Beneficial Ownership Information through FinCEN.

6 - The Fun Stuff

  • When brainstorming what to name your business, be sure to check whether the website domain name (.com) and social handles (Facebook, Instagram, X) are available! The best websites and social handles are short, sweet, and easy to type. Need help deciding on a name and researching availability? Just reach out, bestie!

  • There are SO many DIY options out there to host/design your website and create a logo (and favicon!). You can always start with a DIY option and redesign later (DONE is better than perfect!). While website and logo design aren’t my specialty, your LLC Bestie can still help.

  • Decided on the PERFECT business name, bought the domain, and secured your handle on alllllll the socials? Don’t forget to check for trademarks! Trademarks legally protect a business’ name so no one else in the country can use it in the same industry. Your LLC Bestie can help you search the USPTO Trademark database and make sure you’re in the clear. We can help you file your own trademark application, too (saving you money!).

  • Formal business plans are out, but you still need a strategy. Your LLC Bestie offers strategy sessions, coaching, and step-by-step guides to help you define your business’s goals, target market, value proposition, competitive advantage, and more. Having a solid strategy keeps you focused on your key objectives so you can navigate challenges and seize new opportunities with ease.

Need more guidance?

Just reach out! Your LLC Bestie will get to know you and your business, then recommend a good starting point. As a trusted business consultant, we always have your best interest in mind!