Photo by xxiiiphoto
Perhaps your hobby is turning more into a business day-by-day. Or perhaps you’re setting out to start your own business. Today I’m sharing 5 steps to make your business official. With these 5 steps, you’ll set yourself and your business up for success. Let’s jump right in!
5 Steps to Make Your Business Official
Have a Business Bank Account & Credit Card
When starting your own business, it is essential that you keep your personal and business finances separate. To make this easier, from the beginning, open up a separate bank account that you use solely for business. Deposit all income and withdraw all expenses from this account. The bank account doesn’t have to be an official “business” bank account (most business bank accounts require a high minimum balance), just a separate bank account from your personal accounts.
Along with having a separate bank account, you’ll want to apply for a business credit card. Again, the credit card doesn’t necessarily have to be a “business” credit card, it just needs to be a separate credit card from the one you use for personal expenses. Link your business bank account with this credit card so that the credit card balance is paid off each month with funds from your business bank account.
Having both a separate business bank account and a business credit card will make your life SO much easier come tax time. It’s also a good habit to build from the beginning – you should never co-mingle your personal and business finances.
Register Your Business
Whether you’re starting out as a sole proprietor or registering your business as a LLC (or another business entity), you should register your business and apply for an employer identification number (EIN). This number acts as an identifier for your company. It’s essentially your business’s social security number.
I recommend moving away from a sole proprietorship and registering your business as a LLC as soon as possible. Every business is different and certain exceptions may apply. You can read more about when to convert a sole proprietorship to a LLC in this post!
Have Client Contracts on Hand
If you are working with clients (providing services or goods), you should always have a contract with each and every client. An easy way to ensure that you always have a contract for each client is to have a client contract template on hand. With a template, you can easily adjust the contract language to fit each individual client without having to draft an entirely new contract each time you take on a new client.
Check out the contract templates I offer for immediate download here!
Have an Independent Contractor Agreement on Hand
Along with client contracts, it’s also important that you have a contract in place with any contractor or freelancer that you hire to help you with different aspects of your business. Email correspondence is not sufficient. An independent contractor agreement should define the relationship between you, your business, and the contractor.
Once you move into hiring full-time employees, you’ll need to up your game to an employee contract in lieu of the independent contractor agreement.
Check out the Independent Contractor Agreement template I offer for immediate download here!
Up Your Email Account
This is an easy step that adds almost immediate legitimacy to your business. By simply changing your email address from a standard @gmail.com address to a more official email address that corresponds with your business and/or website, your business immediately looks more official.
I personally use GSuite, and it works really well. It’s a Google platform that allows you to use your own domain name to create email addresses. For example, mine is [email protected]. My email inbox looks almost identical to my @gmail inbox, but from the outside, it looks much more official.
Questions on any of these steps to make your business official? Contact me here! I’d love to chat.
ALL OF THE INFORMATION PROVIDED IS FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY.
