Whether driven to an entrepreneur spirit by circumstance or desire, fortunately it is not complicated to get a small business legally registered. Some measure of apprehension is normal, and that actually indicates one appreciates the seriousness of such an endeavor, which is commendable. But there really is no mystery or insurmountable legal hurdle to overcome. As we will see, there are essentially three basic steps involved. Before discussing these, however, it would be be good to consider a few aspects that will make those legal steps that much easier, along with bringing added benefits once you've 'thrown your hat in the entrepreneur ring', so to speak.
Bringing Your Ideas to the Table
- Give thought to a business name that tells people something about your services. That doesn’t mean it can’t be catchy, but it should inspire people to look to you for more information and promote confidence in your professional skills. You probably should avoid being too vague, but keep in mind the services you provide might expand in the future, therefore you shouldn’t be too narrow in the scope of the name either.
- Familiarize yourself with web services. A suggestion in this regard might be to avail yourself of free web site hosting (i.e.: Google, etc) and free advertising opportunities (i.e.: Yellow Pages, Google / Yahoo business listings, Craig’s list, etc.). Such services obviously minimize the initial expenditures of a business start up. However, if your CAD business plan warrants a paid web domain name, then by all means pursue that avenue. It really comes down to a personal choice and the scope that you foresee your business taking.
- Also, give consideration to a marketing plan(s), including a networking approach (i.e.: your LinkedIn account), to professionally promote your services to others.
Taking the Steps
There are three basic steps to becoming legally registered. For the intent of this article, we will use the example of CAD Graphics, LLC, located in Madison, Wisconsin, USA.
- Create a Corporation or Limited Liability Company (LLC): This step involves contacting and registering your business with your respective state. For Wisconsin, one would contact the Department of Financial Institutions and follow the instructions provided. Determining your business type, whether a Corporation or a Limited Liability Company, is of course a personal decision dependent upon the CAD business model you are developing. There is an initial filing fee required, and a yearly renewal fee of moderate amount.
- Request an Employer Identification Number (EIN): This is simply an Internal Revenue Service identification number for your business that you will use for any monetary or tax related identification, and is available without charge.
- Create an Operating Agreement: This is a written operating agreement that you would keep in your business records file. It may or may not be legally required, dependant upon location and state. It also may not be necessary if one is a single proprietor. It's purpose is to identify managerial rights and duties, and examples are readily available on-line.