businessreport

You have done some testing and it looks like you might have something here with your big idea.  The question is, now what?

 Are you ready to take a big enough leap that you will want to have an official business name?  This is something to take into consideration because of tax purposes and other potential legal requirements down the road.  If, in the beginning, your only goal is to gather some independent clients, becoming official may not matter.

 On the other hand, if you are planning to rent an office, then filing a DBA, doing business as, has to come first.  You don’t want to find yourself in the position down the road of having someone else claiming the rights to the business name you have chosen.  This is the only way to ensure this doesn’t happen.

 Look for a local paper which offers legal services in their classified ads.  Fees are different by state and by whether or not you choose a big daily or a local weekly.  Whoever takes your money will explain the process.  You will then wait for a notice from your state explaining you have the right to the business name in your state and for how long.

 As soon as you receive the paperwork from the state, you will be able to open a business bank account.  You never want to put yourself in the situation where someone can claim that you have mingled personal and business funds.  Many financial institutions are now offering free business banking.  So, shop around in your area.

 The next legal necessity may be a business license.  I say may be because I ran a business out of my home for years with no troubles because I lived in an unincorporated area of the county which didn’t require one.  Find out before you find yourself with trouble.  If you file income taxes as a self-employed person in a city which requires a business license, they will catch up with you after your IRS filing and ask that you pay for that year as well as ongoing.  Whether or not your city requires a business tax and how high it is, can be a decisive factor as to where you open your doors. Calling city hall will probably give you the answers.

 Even if you provide services, you may be in the situation of reselling products.  This is true for graphic artists, advertising and public relations agencies.  They charge their clients for the paper products used in their services.  Therefore, they charge state tax and this has to be paid to the state on a quarterly basis.  Every area has different regulations and you need to find out about yours.

 More on office choices next time.

 Find more of my work at: www.bellbusinessreport.com.

 Laura Bell

writer@well.com

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