KJ Tha Great

When new entrepreneurs proceed to start a business, usually the legal formations they are aware of is to register the corporate type with the state, get an EIN, and create the corporate identity. Though these documents are critical to obtain, there are 7 other forms needed to protect the growth of an organization.

It can be exciting to start new business ventures, but did you know that nearly 33% of businesses fail after their second year? My first business failed going into year 3, so I was definitely in this statistic. I thought that after my first business, starting other ones would get easier with the more companies I intended to own since I was more aware of what I needed to do unlike the first time around. Nonetheless, there were some underlying tolls that I still ran into going into the next few businesses which made the progression take a lot longer than expected, and it got extremely costly in the early stages that could’ve been avoided with a little more guidance. I want to help you avoid these errors I found to be small, yet impactful throughout the course of business development. That way you can know what legal formations you should have in place and how to allocate your funds properly without being wasteful or moving too quickly and ultimately getting nowhere. Since there is a lot of information to unpack, I broke this blog into 2 parts so that you can get the best understanding of how these documents can benefit you.

In my experience I found the most important thing to have will be an in-depth business plan. This is my most favorite topic to discuss with new entrepreneurs because it can determine how successful their ideas can be. The business plan consists of these 7 sections: the executive summary, an industry overview, products and services, market research, operation and staffing, financial projections and the marketing plan. When you get serious about the company you want to start, regardless of the industry or market you want to be in, having a business plan will put the entire idea into perspective. It will identify your position in the market, who your customers and competitors are, scale out the potential income and expenses, how it operates and weigh out the best marketing tactics for your company. In my opinion, the business plan should come before you’ve even decided the name of your company, before registering with the state, before you gather any type of investments towards making the business come to life. This plan will map out the first 2 years of how the company will run and when to pivot. I’ve created business plans for more than 5 companies in the last 3 years and I love how progressive these companies have been ever since. If you are interested in my business plan services, click here to schedule a free consultation with me and I would be happy to help you start your business off in the right direction.

The next thing I want to highlight is having a virtual business address for your company. Every business needs a physical address to be considered an entity and can be crucial for businesses that are home-based. It protects the privacy of your residence considering that there will be a ton or spam mail that your business will receive that you don’t want to come to your home (or angry customers randomly pulling up on you). The virtual address can also reduce your liability, help build your business credit and grant you access to working capital. I’ve used a virtual office through Regus before, but there are other companies like Davinci or WeWork that could better suit your business needs. These companies offer a postal address in a business district rather than a neighborhood, and they will forward your business’s mail to your residence. With a virtual office, you will have access to administrative support, call-handling services, office or coworking spaces, and 24/7 worldwide business lounges. You can visit their sites to find a location suiting to your business (which it does not have to be in the same city as you are). Having a formal business address can open doors for you to qualify for sizable SBA loans on account that your entity will be classified as a legitimate organization and the donors won’t assume the money will be used irresponsibly. Note: a PO box will not account for a business address. Don’t miss this step when forming your business or you could lose out on your privacy, and funding opportunities.

Once you have your business plan and virtual address established, that’s when you should go through with registering with your state. Every state’s registration is different, but if you’re in Georgia like I am, you can visit The GA Secretary of State site to get started. You will need to know your NAICS (North American Industry Classification System) code for the business which can find here: https://www.census.gov/naics/. It costs $100 to file your corporation. The business plan should’ve helped you understand which corporation type would be best for your business. The most popular type is an LLC, or limited liability company, but some businesses may need more or less of the protection that comes with this form. The 6 corporation types are: sole proprietor, C-corp, S-corp, LLC, partnerships, and nonprofits. You can learn more about these types of corporations and which one is best for your startup company in a later blog. Upon completing the registration with the state, it is imperative that you visit the IRS.gov and register for a free EIN, or employer identification number (sometimes called an ITIN, or individual taxpayer identification number). The EIN will add an additional layer of protection for your company’s identity, especially when it’s time to file your taxes and avoid tax penalties. You will also need the EIN to open a business bank account and/or apply for business loans. You can learn more about the benefits of having an EIN in a later blog.

After you have secured your business’s name, filed it with the state, and have legal identifications in place, now is the best time to set up the official company logo. The corporate identity can be displayed as letter-marks or monograms, abstracts or pictorials, emblems or a combination. The logo has to make your brand memorable to its targeting market to be successful identifier. Nowadays, the trends for company logos are simple designs that can be easily described, like the check symbol for Nike or the bitten apple for Apple. You can make a simple logo yourself using 1000+ free templates on Canva or hire a graphic designer who can create visible solutions for your brand…. like me. Yes!! I can design the perfect logo for your business! Actually, my services go as far as creating a full branding kit that includes a 3D logo and joined icon(s), color scheme, pairing typography, and comprehending stock photos. Click here to see more.

So far, we have discussed 5 of the 10 important documents you will need for a startup company. Those are the business plan, the virtual business address, the state registration, the EIN, and the corporate logo. I’ve listed these proceedings respectively by their importance to the startup process of a new business, which will help you to save time, effort and money on a smooth development. In Part 2 I will reveal the remaining 5 documentations you will need to protect your growing business.

Author:

KJ Tha Great

Reading Duration:

3 Minutes