Do you want to start a business? When I was starting I found it difficult to find information to trust about starting. I tried networking and asking questions, I read all kinds of articles online, and yet most of them did not prepare me for starting my business. Many people want to start one but not many will do the hard work required. I am often asked, “How to start my online service business?”
Starting A Business
Starting a business is a serious thing. Some today start a business as a ‘side gig’ or for extra money. Today, however, I’m speaking to that person who not only wants to start a business but who has a desire that burns within you to do it. It drives you and you know it’s what you are meant to do. It is not a hobby nor is it something you want to do on the side. You want a real money-making business.
Step One: Your Why
You decided to start a business for a reason. Ask yourself, “What is that reason?” What is your driving force to make it happen? Having a good ‘why’ for starting your business will sustain the good and bad on your entrepreneurial journey.
My Why
I started my business by accident but the reason I wanted to earn money was to add to our family income (needed really). In addition, I could no longer work outside of the home as I had become disabled and I was homeschooling our three children. Today, my why is different as my children are all grown now. My reason for having a business now is more about helping others on their business journey and enjoying what I do. Of course, the income is a factor as well. <wink>
No matter your reason why write it down and post it on your monitor or a wall. Keep it nearby for those days when you struggle and wonder if it is worth it. It is by the way.
Step Two: Name Your Business
Step two is choosing a name for your business. This can be fun or it can turn into a neverending list. I tell clients to make a list of names they want or like and then go to family and friends for their feedback.
PRO TIP:
When choosing a name, (1)have it describe the services you will offer your clients, or (2)let it describe the type of clients you will serve. If you will offer graphic design you may decide to call it: ‘your last name graphic design & company’. It can still be unique and try to be a little creative with it.
Perhaps one of the most important functions of entrepreneur business names is that they allow consumers to easily identify your business and remember your products or services. It also enables you to build customer loyalty, which is important as 46% of customers buy from familiar brands (Salsify, 2022).
Research.com
Name Generators
I’m not leaving you with just the list in your hand, however, I have a surprise. Whether that paper is blank or has a hundred names on it you want inspiration. That is the reason I’m giving you a list of name generators. Yes, that’s right, there are programs to help you name your business.
List of Generators:
One last note, it is wise to have one to three backup names. It is possible when you settle on the perfect name so has someone else. Meaning it may not be available for use. When you go to register it or purchase the domain you may find it is unavailable so it is wise to have at least one backup name. See step four below on registering and domain.
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Step Three: Choose Your Business Type
The business type means the organizational structure. In the U.S. there are multiple options. If you are outside the U.S. please check with your country or province. Canada for example offers LTD rather than LLC.
I always advise clients to make their companies a Limited Liability Corporation (LLC). This helps protect your personal assets and incorporate your company. This is also still considered a solopreneur.
Layman’s Definitions of Company Type
- Doing Business As (DBA) – This type is often used when someone is first starting. If the business grows it should change the nature of the company type. be a one-person shop. This type of business does not need to file for a Federal Tax ID, as you can use your Social Security number to ID your company. If you want to keep your business and personal checking accounts separate, however, you will not be able to open a business checking account with a bank in the U.S. The United States requires you to have a Federal Identification number.
In some cases, you don’t need to register at all. If you conduct business as yourself using your legal name, you won’t need to register anywhere. But remember, if you don’t register your business, you could miss out on personal liability protection, legal benefits, and tax benefits.
us small business administration
Additional Business Entity Types
- LLC – A Limited Liability Corporation – This is often the go-to organizational structure most set up. It takes the financial responsibility off yourself (home/family) and puts it solely on the company. This is one of the most common types of corporations, especially for small businesses.
- General Corporation – There are numerous & specific types of corporations. Since I’m writing mostly to micro and small businesses, I will not go into details here, as it will not benefit you. The only other thing I will say is that if you want to create a corporation (including an LLC), it would be wise to consult a lawyer.
- Partnership – It is two or more individuals or entities becoming one type of company. This can be formed as an ‘LLC partnership’ as well. It only means that there is more than one owner of the business. In other words, the business (profits, liability, assets & all) are owned by all within the partnership. Keep in mind that partnerships are not always a 50-50 split. It can be split any way you agree upon. Be sure to come to terms before paying a lawyer or anyone else first, this way you are not paying extra as you change your minds and go back and forth, with a lawyer involved, as you will be charged for each minute – even an email minute.
Step Four: Register Your Business & Domain
After you have chosen your name and business type you need to register that name with your State (in the U.S.). In other countries, check with the department that handles new business registers.
In the States, go to the U.S. Small Business Administration website and find the section to register with state agencies. You’ll select your State. This will give a link to your state’s website where you can register your business. This is where you will also indicate the type of business.
Domains
You also should go ahead and purchase the domain name for your business website even if you do not plan to build a website immediately. You can purchase for one or many years ahead.
PRO TIP:
Check with a domain register before you register your business. When you check the availability of the business name you choose in the State registry it is important to also check if the domain is available. This will save you a lot of headaches in the future as you move through starting your business. It’s wise to check both simultaneously. Once you know both are available then purchase the domain and move forward with registering your business in your State.
Step Five: The New Financial Ownership Requirement
Financial Crimes Required Registry is being put into practice in the United States next year (by 2025). It is new and is something you should prepare for in your business. As with most things the more we progress the more is required. Therefore the government (U.S.) has decided you must register another way with them.
This is with the new Financial Crimes Enforcement Network. It is so new in fact that I’ll not even try to explain it all but rather have given you part of the information copied here:
As of January 1, 2024, many companies in the United States will have to report information about their beneficial owners – the individuals who ultimately own or control the company. They will have to report the information to the Financial Crimes Enforcement Network (FinCEN). FinCEN is a bureau of the U.S. Department of the Treasury. Beneficial ownership reporting is a requirement of the Corporate Transparency Act of 2021.
Companies that are required to comply (“reporting companies”) must file their initial reports by the following deadlines:
- Existing companies: Reporting companies created or registered to do business in the United States before January 1, 2024 must file by January 1, 2025.
- Newly created or registered companies: Reporting companies created or registered to do business in the United States in 2024 have 90 calendar days to file after receiving actual or public notice that their company’s creation or registration is effective.
Beneficial ownership information reporting is not an annual requirement. A report only needs to be submitted once, unless the filer needs to update or correct information. Filing is simple, secure, and free of charge. Learn more about beneficial ownership information reporting at www.fincen.gov/boi(Link is external).
The good thing is that you only need to do this ONE time unless the beneficial ownership information changes.
Final Notes for Today
These are the very beginning steps for your online service business. Please come back and read part 2 as I dig into research, finding your niche, defining your audience, brand design, and budgeting.
Thanks for reading and I look forward to sharing more with you!
Note: There is a wealth of information on the U.S. Small Business Administration and S.C.O.R.E. websites.