How to start a small business: the essential checklist

Many people aspire to start a small business, but logistical legal and tax requirements often deter the dream before it starts. With expert input, however, you can set up your business properly to avoid consequences from success.

You've established your small business's name and plan, but now what? Here's a brief guide on how to fulfill the legal and tax requirements.

Step l: Lock down your key advisors

Choose your advisors based on your business model. You'll likely need a legal advisor and a tax advisor from the start, as they'll prepare, execute, and advise you on some of the most important steps in the start-up process. You may also need an operational accountant from the get-go if your model requires a lot of transactional activity or a marketing advisor if you're launching a product.

Step 2: Choose and register a business entity type

There are pros and cons to forming a business entity rather than operating as a sole proprietor and to each type of entity you can form. Both legal experts and tax experts can recommend the entity type that makes sense for you, but tax experts typically offer deeper insight into the type you should form based on your business activity, growth plans, and owners' tax situations.

Typically, your tax advisor and/or legal advisor can handle most of your filings and registrations for you, but LegalZoom and other similar services might also be able to handle the registrations. Proceed with caution on the DIV method, though, because failing to complete all of your necessary registrations can get you into trouble.

Step 3: Set up your essential accounts

Once you've set up your legal entity, you'll be able to open essential accounts under your business's name. For example, you'll be able to open a bank account and obtain a credit card, which can help you strategize around your cash start-up costs while earning rewards or points on purchases.

If you're planning on hiring employees right away, you'll also need to choose a payroll vendor and to register as an employer in any state where your employees will be working. Finally, if you haven't started working with an accountant yet, implementing an accounting system such as OuickBooks before you begin operating can help you track your start-up costs.

If you're feeling overwhelmed or stumped on how to find the right people, input, or systems that can support you throughout the process of opening a business, we can help! Reach out to Syzygy today for some guidance on where to start building your dream.