Project Person // Primer #3

One of the thoughts that stood out to me about Peyton’s story was how excited she was to become a business owner. She mentioned the process and satisfaction of filing for an LLC, obtaining an EIN, and opening a bank account, and it made me think of how hazy this process can feel for someone who has never done it before.

Below is a primer on the main considerations for officially starting a business. Of course, I’ll riddle this with disclaimers that it all varies by state and industry and you should talk to a lawyer or at least Google. But, in general, here’s what you should consider, in order:

1 // Choose a name. 

I named my first ever business Achor & Eden Photography, and it was forever misspelled as Anchor or Acorn. I named my next business The NotWedding, and its trademark was challenged on day 29 of my 30 day public notice by The Knot, causing me to ultimately change the name to The Big Fake Wedding. I let my business partner name my current business (Same Page HR), which was 100% the right move.

All that to say, I’m not the best at naming businesses, but here’s what I’ve learned the hard way:

• Make sure the name is something that can be easily understood and googled. 

• Make sure the name makes sense and isn’t considered offensive or too trendy. 

• Make sure it’s not being used by a direct competitor by checking the USPTO trademark search and a Secretary of State search in your state. (You do not have to have to file for a trademark, but it is wise to see what else is out there in case your business grows large enough for this to matter!) 

2 // Register your business. 

An LLC is the most common business entity to form. As an LLC, you can elect to file taxes in different ways (as an S-Corp, for instance) based on your structure and revenue. Forming an LLC allows you to get an EIN/tax ID number, which allows you to get a business bank account. LLCs also provide a level of legal protection above Sole Proprietorship. 

Chat with your tax person to decide what’s best for you, but if you don’t have any super unique circumstances, an LLC is likely the way to go. 

This Forbes article and the list of links separated by state is super helpful in explaining all the steps. You can hire a service like LegalZoom to file for an LLC for you, but it’s really pretty easy to do yourself.

You will likely be the Registered Agent, and you can find templates for an Operating Agreement and Articles of Incorporation online. You’ll need to renew your corporation each year for about $50, but of course that all varies by state as well.

3 // Get an EIN (Employer Identification Number). 

Ultimately, an EIN allows you to keep your personal finances separate from your business finances. On the vanity side of things, this allows your client to pay your business name vs writing you a personal check. 

An EIN also allows you to hire and pay employees. 

Register for an EIN here.

Here’s a helpful article that explains this in detail. 

4 // Open a business bank account. 

One of the biggest pieces of advice I like to give new business owners is to keep your personal account separate from your business account.

Once you have an EIN, you can open a business bank account. I recommend using that account for ALL business income and expenses—including paying yourself. This can also get you into the good habit of paying yourself consistently, not just when money comes in. (I’ll write a primer all about this one day). 

Depending on your industry, a small local bank may be a good idea, especially if you’ll need credit and a direct relationship with a banker. However, if you are a service- or tech-based business, an online bank like Novo might be the easiest move. 

We use Novo for Same Page HR and have been pretty happy. Use this link or referral code CallieMurray to get $40 when you open an account.

When things get a bit more complicated, you can use a tool like Quickbooks or Xero to track money that’s coming in/out, but when things are smaller, a simple spreadsheet works just as well.

In addition to the name and amount of the transaction, you can also use a simple “Chart of Accounts” to help classify the expense. This will help with your own planning/clarity as well as with taxes at the end of the year. 

Income Types - Could be separated by product or service if helpful 

Expense Types: 

• Accounting Fees

• Advertising & Marketing

• Bank Fees

• Business Credit Card Interest

• Business Licenses & Permits

• Computer Supplies/Service

• Contract Labor

• Continuing Education/Training

• Dues & Membership Fees

• Office Supplies

• Legal & Professional Fees 

• Meals/Entertainment

• Postage and Delivery

• Repairs and Maintenance

• Telephone/Internet 

• Travel (Airfare, Hotel, etc.)

• Miscellaneous

5 // Obtain any licenses & permits. 

This varies based on the location and type of business you operate. Check with your city and county in particular. 

6 // Brand, build, launch, make bajillions.  

Next week, I’ll share a friend’s story about starting a brick-and-mortar business while also working a very full-time job with a growing family. 🫠 Stay tuned!