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How to Start My Own Business

How to Start My Own Business

Starting a business in the United States can be both overwhelming and invigorating. But – if you do it right – it can also be a very profitable experience that will set you up for life.

Today, I’m going to provide you with an actionable 13 step guide on how to establish your own business within the United States.

Hi, my name is Sam Mollaei and I’ve helped many aspiring entrepreneurs – just like yourself – establish their own business in the United States. You can email me at sam@mollaeilaw.com and be the next entrepreneur I assist.

With the assistance of my 13-step guide, you will have EVERYTHING you need to set up a business within the United States.

By making the decision to set up a business in the United States, you gain access to an economical powerhouse.

And the best part? You don’t have to live in the U.S. to manage a U.S. business.

You just need to know how, and my 13-step guide can help.

Please click on any of my actionable steps to be taken to a more detailed description of the step.

  1. Market research
  2. Apply market research to your business plan
  3. Name your business
  4. Establish a business structure
  5. Decide where to form your business
  6. Get EIN (and an ITIN if necessary)
  7. Open a US business bank account
  8. Open a business merchant account
  9. Acquire business insurance (if necessary)
  10. Meet tax obligations
  11. Separate business and personal bank accounts
  12. Maintain company and pay dues
  13. Comply with local requirements

 

1. Market Research

Effective market research is a crucial first step in establishing a business in the United States. After all, you want to give yourself the best chance at having a successful and profitable business.

Market research requires you to sit down and look at a combination of consumer behaviors as well as current economy trends.  Basically, you need to confirm there is a market for the business you are interested in establishing.

Collecting demographics and understanding the consumer base from the early stages will just improve your chances of success. You will better understand the risks and any limitations your business has based on the targeted consumers.

  • To conduct your market research effective, you just need to answer these questions:
  • Is there a current demand for the product and/or service you plan to offer?
  • How large is the targeted consumer pool?
  • What is the financial and employment status of targeted consumers?
  • Where do your targeted consumers reside?
  • What kind of competition would you have business-wise already on the market?
  • What do competing businesses charge for similar services/products?

Once you answer these questions you will know a few different things including whether your business idea is worth exploring and what you need to do to stand your ground against the competition.

 

2. Apply Your Market Research to a Business Plan

Once you’ve concluded your marketing research one of two things will happen – you are either going to scrap your business idea and come up with a new one or you are going to move forward with forming your business.

If you decide to move forward, you will need to take what you’ve learned along with your initial business idea and apply it to a business plan.

How you choose to set up your business plan is something on you can decide, because you need a format that works for you.

Basically, you are just creating a checklist of some sport regarding how you will create your business.

 

3. Name Your Business

While it seems silly to make this an actionable step in the process naming your business is important. It’s easy to want to jog that creative lobe of your brain and foster a truly crafty name.

Unfortunately, getting too creative with the name of your business is a mistake.

The name of your business needs to be something that makes sense in regard to the industry you go into and the type of product or service you sell.

While you have to pick a unique name – as you can’t register your business under a name already claimed by another business – you want it to be something simple enough that people will remember.

You want this to be a name that, in time, people will just recognize by a quick glance.

What you don’t want is for people to see the name of your business and still have no idea what you are selling.

 

4. Establish a Business Structure

The very first question you need to ask yourself is: what TYPE of business is right for you?

Selecting the proper business structure is crucial because it plays a role in every aspect of your business moving forward.

So, it is necessary for you to take the time to understand your options.

If you feel overwhelmed by making this decision yourself, please send me an email at sam@mollaeilaw.com and tell me a little about your business. I can help you make the right selection.

LLC

In most scenarios, an LLC is the most beneficial business structure to set up in the United States. This is especially true if you are not a U.S. resident.

An LLC offers you liability protections other business structures do not necessarily offer including the separation of personal and business assets.

If something happens and someone sues your business – the last thing you want is for them to be able to come after your home, your car, and the money you put away for when your child goes to college.

With an LLC, you also reap the benefits of “pass-through taxation. Basically, this means you don’t have to worry about doing personal and business taxes.

I recommend this structure for just about every entrepreneur I work with. If you have a simple business plan and don’t see yourself exceeding $100,000 a year, this is the structure for you.

C-Corp

It is pretty rare that I recommend a C-Corp structure to anyone setting up a business (especially if you live in the United States).

While a corporation is great if you want your business to have shares and you plan on pulling in investors, you have to deal with double taxations if you go with a C-Corp and live in the U.S.

Double taxation just means you have to pay taxes at both a business and personal level.

For a non-U.S. resident, however, this is an ideal format if you want a business with shares.

S-Corp

If a corporation is the way for your business to go and you live in the United States, you want to go the extra step to register your business as an S-Corp.

Please keep in mind corporations are recognized as C-Corp by default. You must elect to be an S-Corp to be recognized as such.

For someone who plans on bringing in less than $100,000 a year, an S-Corp is the way to go as a C-Corp is just going to cost you money on the double taxation issue.

Sole Proprietorship

While a sole proprietorship is technically a business structure, it doesn’t require you to file any paperwork. The moment you start engaging in business activity you fall into this category until you register as something else.

The problem with this business structure is it offers no protection to your personal assets because you are your business. You are personally liable for everything.

It is pretty rare that I would ever tell someone interested in establishing a business to go with this business structure.

Still not sure? No problem!

If you still aren’t sure what type of business structure is right for you, just send me an email at sam@mollaeilaw.com. Give me the run down on your business plans and I can help you decide.

 

5. Determine Where to Form Your Business

If you live in the United States – this step is easy. You should form your business in the state you are physically located in.

Things, however, get a little dicey when you are not a U.S. resident.

If you are not a U.S. resident, I highly recommend forming your business in the state of Wyoming. This state offers amazing benefits that other states in the U.S. do not offer.

In fact, here are the biggest reasons to set up shop in the state of Wyoming:

  • You don’t have to be a U.S. citizen to set up a business here
  • The annual report fee is significantly cheaper compared to other states
  • You can have some privacy as members or managers will not be listed
  • There’s no personal, state, corporation, or capital gain taxes
  • The state offers a lot of foreign-friendly laws

I’ve never had a non-U.S. resident unhappy with setting up a business in the state of Wyoming. So, I don’t think you will be unhappy either.

 

6. Get EIN (and an ITIN If Necessary)

To operate a business in the United States you need an Employer Identification Number (EIN).

Basically, this is just a tax number the IRS uses to identify your business.

An EIN is the equivalent of having a social security number and you can’t run a business without having one.

Now, if you aren’t a U.S. citizen chances are pretty good you won’t have a social security number. In that scenario, you just need to acquire an Individual Tax Identification Number (ITIN) instead.

Fortunately, I offer an ITIN service!

You can also email sam@mollaeilaw.com and I can help you!  

 

7. Open a US Business Bank Account

Setting up a U.S. bank account may require you to take a trip to the United States as most banks are not willing to set up accounts remotely.

Here’s a list of everything you need to collect before planning a trip to set up your bank account:

  • EIN letter from the IRS
  • Copy of Articles of Organization
  • Ownership Agreements (Operating Agreement if it’s an LLC)
  • Passport

 

8. Open a Business Merchant Account

You may be wondering why you need a bank account and a merchant account. A merchant account is what makes it possible for you to take credit and debit card payments from customers.

If you have an EIN (which you should have acquired a few steps ago), you can open a merchant account.

The best part? Merchant accounts don’t cost anything to open.

Payoneer comes highly recommended as a Paypal alternative for non-U.S. residents. In fact, there are a lot of U.S. citizens who prefer Payoneer to Paypal because they offer lower fees.

 

9. Acquire Business Insurance

Business insurance is pretty much what you expect it to be. It protects your business from unexpected happenings.

Lawsuits, natural disasters, accidents, and even vandalism are unexpected and unfortunate happenings that every business owner runs the risk of encountering. There, however, is no reason for you to pay for these situations out of your own pocket.

If you have business insurance, you have financial coverage. It can fill in a lot of gaps and offer some protection to both personal and business assets.

In some states, you are required to have business insurance. And it just makes sense to have some for your own protection and peace of mind.

While business insurance is technically “optional” depending on where you live, it’s a mistake not to invest in it.

 

10. Meet Tax Obligations

When you establish a business in the United States, it comes with certain tax obligations you are required to meet. These obligations vary by where you form the business and what type of business structure you select.

Unfortunately, I am NOT an accountant and I DO NOT give my clients tax related advice.

It is so important for you to reach out to an accountant to make sure you have all of your ducks in a row when it comes to taxes.

 

11. Separate Business and Personal Bank Accounts

If you decide to form a corporation or an LLC, it is vital to keep a clear separation between your personal and business assets.

If there is not a clear separation and someone takes your business to court – you could end up losing your personal assets in the crossfire.

Please don’t underestimate the importance of taking this step.

How do you separate your personal and business assets?

Well, for starters you open a bank account as well as a credit card that is in your LLC or corporation’s name and is only for business expenses. Never use this bank account or credit card for personal reasons.

Any property, real estate, or vehicles being used by or for the company should also be in the company’s name instead of in your name.

 

12. Maintain Company and Pay Dues

Once you have your company set up, you have to make sure you keep up with necessary paperwork and pay annual dues. Otherwise, you will just lose the company you worked so hard to build.

You can email me at sam@mollaeilaw.com and I can help you understand the requirements you must meet and dues you must pay to keep your business compliant.

 

13. Comply with Local Requirements

In addition to all those fun requirements and paperwork needs for specific business structure, there are also certain requirements and needs that vary by location.

You must make sure you comply with all local requirements (based on where you formed your business).

As an experiences business attorney, this is also something I can help you with.

 

What To Do Next

I encourage you to go through this guide step-by-step and really take the time to digest all the information I’ve made available to you.

Once you’ve made it through this guide the final step in the process is to consult with an experienced business attorney, such as myself.

The number one mistake I’ve seen aspiring entrepreneurs make is not consulting with a lawyer when they hit the ground running.

You make a mistake early on in the process of formatting your business and you set yourself up for liability issues in a big way.

Let me help you establish your business today, you can email me at sam@mollaeilaw.com.

Sam Mollaei, Esq.

As a Business Lawyer for Entrepreneurs, I help entrepreneurs start their U.S. business without dealing with complicated government forms. I’ve assisted more than 2,246 entrepreneurs successfully start their business and I'm backed by more than 702 5-Star Google Reviews. If you're interested in starting your business, take the first step by requesting your Free Strategy Session on this page.

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