In a prior post, I mentioned that I was in the process of becoming a certified SCORE mentor, providing guidance to others on launching or better managing their very own small business.
I am happy to report that it is official, and my profile is now online with SCORE (click here to view).
During the process of becoming certified I’ve had the opportunity to work with 17 clients, so far, and am now the “lead mentor” for 8.
I have to say, fanning the flame of someone’s dream to launch their own business as well as providing pragmatic advice on doing so, is EXTREMELY rewarding! As one of my fellow SCORE mentors stated: “This is more fulfilling than most jobs I’ve held.”
I couldn’t agree more!
The purpose of this post is to outline several basic / administrative steps that startups must take, which I’ve shared most frequently, with my SCORE clients to-date.
Here we go…And, the good news is that this isn’t rocket science…
Establish the business entity – The reason: to create a layer of protection should someone come after (file suit against) your business. Most of my clients have chosen to setup an LLC as it is the simplest corporate structure to create. And, you do NOT need to pay an attorney to do so!
There are other “types” of corporate structures, which I won’t cover here. If you aren’t sure which one to go with, click here to visit the Small Business Administration’s website which provides an overview of each.
The simple instructions for setting up an LLC can be found on SCORE Portland’s website by clicking here. Once there, you’ll see the topic: “General Instructions for Establishing a Corporation or LLC in Maine.” This document provides instructions for creating your LLC, checking the availability of your chosen name, and obtaining an employer identification number (EIN, a.k.a., a tax ID for the business) from the Internal Revenue Service.
The fourth bullet under section 9 of the instructions refers to the option of using an attorney or paid website to create your operating agreement. While those are certainly options, SCORE has prepared a sample agreement you can complete yourself at no cost, and it is available by clicking here.
When completing the Certificate of Formation you’ll notice a section which covers the topic of Registered Agent. For Maine, you’ll want to select “non-commercial” registered agent. And, in both cases (ME or NH) you can enter your own name and address. It must, however, be a physical address (street and number), not a post office box. There is no reason to pay someone else to serve as the registered agent.
Register Your Domain Name – Even if you don’t “immediately” plan on setting up a website (although this is a key marketing tool for every business) you’ll want to lock-in your address on the internet (a.k.a. domain name).
There are numerous ways of doing so. Assuming you plan on taking the next step of establishing a website (yourself), to support your marketing efforts, I’d recommend using WordPress. Alternatively, if you plan on selling products / services online, I’d recommend SquareSpace. With either solution you can register your domain name and setup a professional looking website for minimal cost. If you are even a “little” technically savvy and reasonably proficient with MS Word, Excel and Powerpoint, you should have little trouble getting yourself established online – in a matter of hours.
Subsequent posts in this series cover what to consider for the content on your website, so we won’t cover that here…
Setup a Bank Account for your Business – To keep things simple, the first bank to consider would be the one that holds your personal accounts. Note: prior to taking this step you’ll need to have established and show proof of your LLC and EIN.
Obtain Necessary Insurance Policies – Check with your commercial insurance broker to learn more, but this will typically include coverage for:
- General / Professional Liability
- Workers Compensation (if you have ANYONE working for you)
Note: There may be other factors to consider (permits and licensing) depending on the nature of your business. Doing a little research online will confirm if and/or how these may apply. And, if all else fails, pick up the phone and call the town and/or state office in the jurisdiction(s) you plan to operate.
Update 4/28/2016: If you are considering launching a business in the great state of Maine, there is an online resource to determine whether you need licensing or permits: www.maine.gov/businessanswers. I’d suspect something similar exists for other states as well.
Believe it or not, there are tons of resources at your fingertips (online) to help guide you in the process of launching your own business. That said, it “can” be overwhelming. If/when that becomes the case for you, feel free to reach out to a local SCORE chapter near you and seek a mentor. We are happy to help simplify the process. And, we do so for free!
How can you beat that?
In closing, we have now covered the administrative “basics” necessary to establish most small businesses. It is now getting time to put out your shingle, the topic of the next post in this series.
All the best!