How to Own Your Own Business

One of the best things about America is that we are free to pursue our goals and dreams. For many, that includes the dream of owning a business and becoming financially independent.

Unfortunately, starting your own business is a feat that many feel is unobtainable, a goal too large to conquer.

That is simply not the case.

Owning your own business is something you can easily accomplish if you battle the process one step at a time.

Now, I am not saying becoming a business owner is easy. I am just saying it is not as far out of reach as you might think it is.

My name is Sam Mollaei and I have spent many years as a business lawyer helping regular everyday men and women jumpstart their dreams of become a self-reliant entrepreneur here in the U.S.

I want you to be successful, and I want to help you get there. If you are looking for expert advice and guidance on your journey to entrepreneurship, send me an e-mail today at sam@mollaeilaw.com.

 

Non-U.S. Residents Can Own U.S. Businesses Too

No matter who you are or what background you come from, it is possible for you to open and run a successful business here in the US. You don’t even have to be a naturalized citizen to open your business.

You don’t need a green card. You don’t even need to be a US resident to open a US based business.

Anyone can be a business owner here in the states if you are willing to put in the work.

If you are still with me…

I want to give you some very important information to get you started on your journey toward owning your own business.

In fact, I have an easy to follow step-by-step plan of 13 actionable steps for you to use that is going to take you through each phase of early entrepreneurship and getting your business off the ground.

As you read this comprehensive guide, I encourage you to take notes, put yourself in the picture, and use the information to really plan out the steps toward owning your own successful business.

 

Owning Your Own Business: The Step by Step Plan

 

1. Evaluate Your Goals

Before you start trying to jump into things, it is important to do a little self-evaluation and make sure this is the career path that is right for you.

When I said ‘anyone can open a business’, I meant it – but the path isn’t always the right one for everyone.

Start by examining your skills.

• Do you have any entrepreneurial skills?
• Money management?
• Time management?
• Team management?
• What about sales experience?
• Customer service?

While these types of skills can easily be learned over time, having multiple areas of experience can really give you a leg up when it comes to starting your own business because it’s likely that in the beginning that you will be responsible for most of these areas.

The second portion of self-evaluation is less internal. You will need to evaluate your personal finances as they are right now and determine what kind of capital you must invest.

Do you have savings you can use toward initial expenses?

Perhaps you have unnecessary assets you can liquidate?

It may also be that you have good enough credit to apply for certain credit cards or small business loans that can help you get your efforts underway, though I usually advise that as a last resort. It is always better to start a business without immediately putting yourself in debt.

Figuring out exactly what you can spend on your endeavor and what your other financial resources are will be crucial to working your plan of action.

 

2. Decide on a Business Concept

There are millions of different types of business and business models out there. That’s one of the best parts about the business world.

Success is not a one-size fits all mold. You must find the mold that fits you best – and if there isn’t one, make it.

Deciding what type of business you’d like to own is a process that will force you to consider several things – some of which include: your skills, your capital, and your location.

It might seem overwhelming at first – restaurant or retail store, professional services provider, online business? There are numerous options and the hardest part of this whole endeavor may be choosing the business type that’s best for you.

Here are a few things to think about while you make your decision that might inspire you.

• Do you have a skillset that is valuable to other people? Can you build a business around that?
• Can you solve a problem in a new way – or, if not a new way, a more efficient way?
• Do you want to provide a product or a service?
• Do you want your business to be rooted in a physical location or would you rather work from a home office?

 

3. Decide Which Business Structure Is Right for You

Once you have a business concept down and you know exactly what service or product you plan to offer, you will then need to decide which legal business structure is right for your needs.

While the legal side may seem like it should be far off considering your business doesn’t actually exist yet, this is actually something you want to decide on very early on as it will impact numerous variables in your plan including tax filings and daily business operation.

The type of business structure you choose can also determine how much of your personal assets and finances are at risk if the business goes south, so this is not a choice to make lightly.

While I will give a brief overview here of the various legal business types, do not hesitate to contact me if you are confused or need advice on legalizing your business.

Send a brief email to sam@mollaeilaw.com with your business concept and I will help point you in the right direction.

 

LLC (Limited Liability Company)

An LLC is the most common type of business structure for business owners here in the US. It’s also considered the best option for small business who will likely be making less than $80,000 per year.

Registering your company as an LLC is the best way to protect your personal assets (home, bank accounts, vehicles) by keeping them separate from your business assets. In short, an LLC makes sure that if your business goes down – your personal assets cannot be seized over the debts of your business.

There are numerous benefits for the business owner choosing an LLC set up, one of them being cheaper and simpler tax processes.

An LLC qualifies for “pass through” taxation. This means that when your accountant goes to file your taxes, they can file your business taxes in with your personal taxes without the need for a completely separate filing.

This definitely saves on time and resources.

C-Corporation

While forming a C-Corp is not something I would usually recommend for first time entrepreneurs, it is a structure that you should be aware of. In fact, I wouldn’t recommend an C-Corp at all, unless you are a non-US citizen who is looking to eventually sell shares in their company.

A C-Corp is the setup for persons who want to trade shares of their company and are seeking investors. Corporations are a better set up for receiving investors because investors can hang on to their purchased shares for as long as they like without having to deal with taxes until they sell them again.

Unfortunately, there is one major downside to becoming a C-Corp or becoming incorporated as you will also hear it called. Inside the tax structure of a corporation, your company income is “double taxed.”

In simple terms, when a corporation earns money, the business pays taxes on it.

Additionally, when the company pays out dividend payments to its investors and shareholders, those people will also pay taxes on the funds they receive. So, the income is said to be taxed two times instead of one.

S-Corporation

While the C-Corp and the S-Corp are both “corporations,” business owners can avoid double taxation by choosing to register as an S-corp. Do keep in mind however, this option is only available to US residents.

An S-Corp is considered the better option for entrepreneurs who are making more than $80,000 per year. Filing this way will also allow you to avoid the self-employment tax which is about 15.3%.

When you file as an S-Corp, you pay yourself what’s called a “reasonable salary” which you pay taxes on with your personal filings. This allows you to keep more money in your business without having to carry the weight on your own personal taxes.

Sole Proprietorship

Sole Proprietorship is a business type that requires no legal filings, forms, or paperwork. In fact, if you participate in any type of small business dealings and choose not to file as an LLC or a corporation, you are considered a sole proprietorship.

The reason I don’t recommend this for many people is the fact that this setup provides zero protection for your personal finances. If the business accrues debt, gets sued, or goes under, you will be personally liable for everything.

So, I stick to recommended LLC in the majority of cases as you have that extra layer of protection between your personal assets and your business.

 

4. Choose a Business Name

Once you have decided on the type of business and its tax filing structure, you should go ahead and find a good name for your business. You will want something that is catchy and appropriate for your services.

You also have to do a little research and pick a name that isn’t currently taken by another local business.

 

5. Register Your Business

Once you have a name that you are happy with, your next step is to make sure that no one takes it before you do. First, you will want to run your name through a corporate database to ensure the name isn’t already taken somewhere.

Once you have confirmed that it’s clear and available, make sure to register the name with your state. Persons who have previously filed as LLC will already be in the system.

Registering your business name will help ensure that no one takes the name out from under you.

If you are planning to stay as a sole proprietor but want a different name you would need to file a “Doing Business As” application.

 

6. Get Yourself an EIN

An EIN (also called a Tax ID Number) is something that every business must have to legally conduct business here in the states.

This ID number also will prove to be a necessity when you do things like open a business bank account, file taxes, and apply for permits.

 

7. Secure the Necessary Permits and Licenses

Now, depending on what type of business you have, this may be a step that you can easily just skip over. If, however, you are starting a business that requires special permissions, now is the time to acquire those.

These permits and licenses often need to be applied for and can take some time to get approved. It is imperative that you file for these early on, as you will not be able to start business operations without them.

 

8. Develop a Well-Rounded Business Plan

Sit down with your accountant and potentially your legal business advisor and hash out your business plan. Put everything on paper from your business name and what you plan to sell to foreseeable expenses and expected payback on those expenses.

A killer business plan is something that will prove to be a huge asset if you plan on applying for loans, so make sure you take this step seriously.

It can mean the difference between getting the funding you need and having to go it on your own capital.

 

9. Get a U.S. Bank Account and Mailing Address

Regardless of whether you are a resident or non-resident you MUST have both a U.S. based bank account and mailing address to do business in the States.

If you are a resident, a mailing address will likely be your personal address OR your physical place of business. Non-resident business owners have some extra steps.

If you live outside the U.S., you will need to use one of many US based companies that, for a small fee, will act as your US based mailing address.

Some of these companies will open your mail for you and scan/upload the information and send it via email while others will forward your mail to your actual address upon receipt.

 

U.S. Bank Account

As far as a bank account is concerned, you must have your EIN and an ITIN (or social security number) at the very least to open an account. If you are concerned about this process, reach out to me at sam@mollaeilaw.com and I can help you prepare for this interaction.

Residents of the U.S. shouldn’t have much trouble here, your SSN and EIN are enough to get you started. Those outside the US have a few more steps to consider.

As I said before you cannot open a bank account without being present. So, if you have no bank ties here in the U.S. you will need to visit to get the account set up.

Just make sure to call the facility in advance and find out what documents will be required of you so that you can be prepared.

If you have a bank here already, you might try calling and seeing if you can use your EIN to open an additional checking account for business purposes.

 

10. Get a Merchant Account

Regardless of whether you plan on having an online component to your business or not, setting up a merchant account can be a huge help.

A merchant account will allow you to accept payments from clients virtually without them having to be present, so you can easily receive funds from clients all over the globe and funnel them into the appropriate business account.

Some merchant accounts, like PayPal, will even allow you to invoice your customers and keep records of their payments — among with many other business tools and perks.

Here is a brief list of companies to consider for a merchant account.

• Stripe.com
• Payoneer.com (great for non-US residents)
• Braintreepayments.com
• Authorize.net
• Paypal.com (requires SSN which most non-US citizens do not have)

Do keep mind, that certain sites (like Paypal) do require an SSN to prove identity. So, if you are not a resident it may be wise to stick with more foreign friendly platforms such as Payoneer.

 

11. Get Business Insurance

Technically, business insurance is another optional step on this list. But that is only because you don’t legally have to have it in some states.

Even though it’s not legally required in some states, I included it in my action plan for setting up a business in the U.S. because insurance is always a wise decision. It protects you from all sorts of financial unknowns.

 

12. Consult a Business Lawyer

The last – and most important – step in this action plan is to reach out to an experienced business lawyer. You don’t want to make a few wrong moves or mess up some of the paperwork during your quest to form a business in the U.S.

With an experienced lawyer by your side, you can get things done the right way the first time.

 

What To Do Next

My name is Sam Mollaei and I want to make you my next successful client.

Please contact me at sam@mollaeilaw.com, so we can start talking about getting those business ideas in your head out into the real world.