The Best Order to Launch Your Business

Starting a business can feel like an overwhelming task, but breaking it down into manageable steps makes the process much easier. One of the most important things to keep in mind when setting up your business is the order in which you tackle the necessary tasks. While it’s tempting to jump straight into registering your business and applying for funding, it’s essential to follow a strategic order to ensure everything is set up correctly from the get-go.

In this guide, I’ll walk you through the steps of setting up your business, explain why the order matters, and how getting it right can impact your business’s growth and funding potential.

Before jumping into formalities like applying for an Employer Identification Number (EIN) or registering your business, your first task is to decide on the name, address, and phone number for your business.

Choosing Your Business Name

Choosing the right business name is crucial not just for branding purposes but also for future funding opportunities. Certain names can actually hurt your chances of securing funding. For example, using names that are too generic, overly trendy, or could be confused with other businesses might cause problems with banks, investors, or lenders. Additionally, names that suggest the business is high-risk or in controversial sectors (such as gambling or adult entertainment) may be frowned upon by bankers and investors.

Why does this matter for funding?

Lenders and investors want to know that your business is stable and professional. A name that evokes a sense of seriousness and trustworthiness can give you an edge when it comes to funding applications. On the other hand, a name that sounds frivolous or risky may cause hesitation from financial institutions.

Tip: Choose a name that reflects the professionalism of your business and is easy to remember. Also, check that the name is available and isn’t too similar to competitors or existing trademarks.

Business Address: Why Not Use Your Home Address?

While it might be tempting to use your home address for your business registration, this can cause some problems in the long run. First, it may not look as professional to customers or potential investors if they see your home address listed on business documents or websites. Additionally, using your home address can raise privacy concerns, especially if you plan on conducting business with partners or clients who expect a more formal business setup.

How to Solve This Problem

Instead of using your home address, consider getting a virtual address. A virtual address provides a professional business address that can be used on official documents, business cards, and your website. This option is more affordable than renting a physical office space but still gives your business credibility. Many virtual office services also offer additional features like mail forwarding, phone answering services, and even meeting space rentals.

Business Phone Number

Having a dedicated business phone number is essential. It separates personal and business communication, making you appear more professional to clients and business partners. It’s also useful for setting up a business voicemail and creating a clear line of communication.

Before heading to the bank, I strongly suggest setting up your business email address and website with your business name. This is an essential step that will add immediate credibility to your business and show you’re a legitimate, professional operation.

Why do you need a website?

A website is not only important for your brand but also essential for your digital presence. Customers expect to be able to find information about your business online. A professional website using your business domain (e.g., www.YourBusinessName.com) is the best way to provide this.

Why should you avoid using Gmail or Yahoo for your business email?

Having a professional email address that uses your business domain (e.g., info@YourBusinessName.com) adds authority to your communications. Using personal email services like Gmail or Yahoo may look unprofessional to potential clients and partners, especially in the business world.

Now that you’ve got your business name, address, phone number, email, and website ready, it’s time to apply for an Employer Identification Number (EIN) through the IRS.

What is an EIN?

An EIN is a unique identifier for your business. It’s required for opening business bank accounts, filing taxes, hiring employees, and applying for business licenses.

Why is it important to get your EIN before registering with the Secretary of State?

While you can technically apply for your EIN after registering with the Secretary of State, it’s typically more efficient to apply for it first. The EIN application will require details that match your business name, address, and phone number, so having them ready can streamline the process.

Once you have your business name, address, phone number, email, website, and EIN, it’s time to officially register your business with your state through the Secretary of State.

What does this step entail?

* Business Structure: Decide whether you want to form an LLC, S-Corp, or C-Corp. Each structure has different legal and tax implications, so choose the one that best aligns with your goals.
* Registering with the Secretary of State: You’ll file the appropriate formation documents (like Articles of Incorporation or Articles of Organization) with the Secretary of State and pay a filing fee, which varies by state.

Why register your business with the state?

This step is necessary to make your business a legally recognized entity. By registering your business, you gain legal protections, the ability to enter into contracts, and eligibility for certain funding opportunities. It also ensures that you can protect your business name under state law.

Now that your business is officially registered and you have your EIN, it’s time to open your business checking account. At this point, I also recommend applying for a business credit card—provided your personal credit profile allows for it. A business credit card can help you establish your business credit and streamline your expenses.

Why is a business checking account important?

A business checking account keeps your personal and business finances separate, which is critical for tax purposes and financial management. It also adds credibility to your business when working with clients and vendors. Additionally, having a separate account is crucial for maintaining your limited liability status if you’re an LLC or corporation.

* What documents will you need?
* Your EIN
* Your state registration documents
* A copy of your business license (Depending on State)
* Your ID

Opening a business bank account will help you keep accurate financial records, which is key when applying for business funding in the future.

Now that you’ve set up your business properly, it’s time to think about funding options. Getting your business set up correctly can actually improve your chances of securing funding, as lenders and investors want to see that you’ve got your business operations in order.

What’s next?

* Consider Small Business Loans: Explore options like SBA loans or microloans. However, it’s important to know that getting SBA loans for startup businesses is difficult, and many banks want your business to be operational for at least two years before offering credit.

* Look into Grants: Research government and private grants that might be available to your business type.
*Explore Angel Investors or Venture Capital: If you’re looking for equity funding, consider reaching out to investors who align with your industry.

Need cash faster? Consider getting a Shelf Corporation from MBA Capital Team. These corporations are at least four years old and can greatly reduce the waiting time for applying for credit. This can be a faster alternative to traditional startup funding methods.

Michael Lee

MBA Capital Team

502-586-6637

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