We are not tax experts, or legal experts. We advise you to seek further assistance from a professional if you do not feel able to make decisions about difficult issues. We do not assume any risk for your success or failure.

We provide general guidelines to get a business off to an intelligent start, and to avoid problems later on. The order in which these things are done can be varied, you just need to be sure to have tax and regulatory items done in a timely manner.

This guideline assumes that you are starting a business on little or no financial resources, and that you have more time than money to invest. We cannot tell you everything you need to do, or tell you which things you should do specifically, but we do try to give you the reasons why certain things are recommended.

No business is without risk. Even if you do it right, unforseen circumstances may intervene with unpredictable results. Starting on firm footing though can help you to make those risks as few and as small as possible.

Choosing Your Business

If you have not chosen a business, then now is the time to do some research. Look at our Market Differentiation book, on the Shoestring Startup Page of the SuperMom site. It will give you some info on how to figure out what might be good and what is not a good idea. Also look over the Business Op/Online Job Reviews, Business Profiles, and check out any other topics on the Shoestring Startups page that apply (Affiliate Sites, Drop Ship Model, and Making Money with a Website, etc). Assess your talents, skills, and resources, and see if something fits.

Once you have chosen, then choose your business name. Details on that are in the tutorial on that subject. Remember to check with your state and the federal trade name registries as recommended in that tutorial to make sure nobody else beat you to the name.

Decide what business structure you want.

You can start as a sole proprietor, which is the cheapest, but has the highest financial risk also. You will be financially liable for all debts incurred by the business.

You may also choose a Partnership, either unlimited, or limited liability. Either way you are likely to need a lawyer to draw up the papers, or at least go online and download the legal papers for a fee (usually $10 to $20). In a partnership, any partner has the legal right to contract debt for the company, so make sure you can trust your partner!

A Corporation works if you have multiple people whom you can involve. This is something you should have a lawyer help you with, but some people do use standard forms for this also. Costs vary from state to state, but there are often yearly fees based on profits that must be paid in addition to a filing fee.

If you are going to register your tradename in your state, or nationally, now is the time to do it. Many businesses never do this, and it is risky if your business grows enough to become a target, someone else can register the name, and force you to either pay them or stop using it

Get your Business Licenses. These may include a City business license, county permissions, and a State Sales Tax License. Most of them have fees involved, some reoccur, some do not. The local Small Business Association office can help you to know which licenses you need and where to go to get them. Requirements vary from location to location. In the town I live in, we do not need a business license, and our county does not require anything from me either, unless I handle food. Make sure you know what is required for where you live.

Assess your resources. Hopefully you did this earlier, and now you just need to either purchase anything you do not have yet, or figure out how to work around it until you bring in some revenue. Make sure your workarounds won't kill your profits.

Get special licenses or registrations. If you handle food, cosmetics, health products, or any other regulated item, you may need to license your facility, and submit a safety plan. Again, the local SBA office can point you in the right direction for these items.

In the midst of all of this, write up a business plan. You can download a guideline for writing one by doing a net search on the subject, or you can ask for help from the SBA.

You can also plan and work on your logo, and stock business literature while you are getting all the things done. Check out our other booklets on these subjects to learn how to do it well.

If you have a sole proprietorship with no employees, you do not need a Tax ID Number, or EIN. Your social security number will work for that. If you have a partnership, corporation, or employees, you will need the EIN. You can apply for that by going onto the IRS site and looking it up. Print out the form and send it in.

Plan for how you are going to pay your income taxes on earnings. This is not a big deal here, just figure out whether or not you intend to sock something away for it. Remember, you will owe 13% Self Employment Tax (instead of SS) on earnings in the US, along with income tax for your tax bracket.

If you sell a product that you have to collect sales tax on, it will be due at the end of each month, or sometimes quarterly or yearly, depending on the state.

You may want accounting software. With a simple business with limited products, you might not need it. A spreadsheet with profit and loss will do. If you have a large range of products, or need more complex bookkeeping, a program like Quickbooks or other business accounting software can either save you time, or make life a royal pain! Such software does not let you overlook things, it demands that you keep things updated, and that you cover the details. You can generally purchase an older copy of Quickbooks, which is fine for a small business without payroll - get a newer version if you need to do payroll. eBay usually has several copies of Quickbooks available at any given time. Do NOT confuse Quickbooks with Quicken. They are NOT the same software, and they do totally different things!

You can work on a website along side the literature. As long as you have your products, pricing, and business contact info in place, you can proceed with a website. Do not register it with search engines though until you are ready to open the doors. Look at the Basic Website and Webstore instructions on the Shoestring Startups page for more information on building the website. We recommend iPowerWeb as being the most reliable hosting value for small businesses. They provide good service, excellent an readily available technical support (we know, this site is in their space, and we have used their tech support!) and extensive help files, along with room for your site and business to grow as far as it needs to.

You can choose to get a second phone line, or a distinctive ring for a fax machine. We had a distinctive ring for a while, and then discontinued that number, because we received very few legitimate faxes, but fax spammers got our number and sent constant fax blasts which just wasted our paper and ink. We just opt to manually accept faxes when someone tells us they are sending us one. This is a personal choice though, depending on what you really need.

An answering machine is advisable if your customers may need to contact you by phone. Leave a business message on it.

If your business has the same phone line as your family, then start answering the phone with a business greeting. It sounds much more professional. Do not let your children answer the phone unless they can be professional about it.

Get business insurance, especially if you have a high risk business involving personal services or services where you will be in other people's homes, where customers may come to your door, if your business involves food, or if people will be coming to your house. Any of these involve higher risks. You can take the risk to be without it if your business is not high risk and if you have few customers, but once it grows, someone is going to get ticked off enough to sue.

Begin marketing your product when you have the groundwork laid. Some of the above steps you can skip if you want to take the risk. Steps involving taxes or licenses though, you cannot. Legally they are required. Check out the book on Marketing to get ideas of how to get the word out.

Plan a grand opening if you have a means of notifying a large group of people, and if it is appropriate to your business.

Be patient. Especially if you are marketing online. Give your business consistent time each day, as you are able, and give it time before you decide it is a total bust. In the mean time, if you have time and energy available, consider doing other things to generate additional potential income. You can check out the Making Money with a Website booklet and consider other product lines that you can easily add to your site, or that you can add to any other literature that you have created.

Remember, you CAN start a business with nothing but work and skills. But if you do, it takes longer to pay off. If you decide that a small business loan would be a reasonable risk, the SBA can make suggestions as to what is available, and what the terms might be. You are not locked into our way of doing things, you can be as creative as you like, as long as you observe local regulations and state and federal tax and regulatory laws.

The SBA may make it sound harder than it has to be. They face liability though if they do not give people the most risk free means of doing it. If I followed all their instructions, I'd be in for $100,000 before I even got to the point of deciding that the business was a good idea! I could not afford that! So I had to do it by taking calculated risks - risking the things that were the least likely to be a problem, and not risking money, which I did not have. The SBA can offer some very good resources though, such as how to write a business plan, and low interest loans for small business startup or expansion.

I cannot offer you any guarantees that you can make it work. You have to choose to take that risk for yourself. If you follow my advice, you do so knowing that the risk is yours. No matter which way you do it, there WILL be risk. But if you are careful, you can at least choose where those risks will be the easiest for you to cope with.

Adventure Tech-Web offers many small business services, including Logo Design, slogan and copywriting, proofreading, website assessment, website building, form creation, business card and publication design, and many more related services. If you need to hire a pro, check with us before you decide you cannot afford it!