You Know What Your Business is Going to Be, Now What? Steps to Open a Business

Your Fico Score is one of the more important steps to Opening A Small Business. While it may not stop you from actually starting your business, a low Fico Score will certainly give you a headache after you have run your head into many brick walls applying for Startup Financing, or any type of business financing. Traditional lenders will feel that you may be too high of a risk if you do not have a good Fico Score and may not lend you any money when you are just starting out or have a chance at expanding your business. Remember that most traditional lenders are going to look at your personal credit, especially if you are a small business. So having a good Fico Score is going to be one of the key steps to Opening A Small Business.

The Business Structure should be decided early on in business because you will want to make sure that you are covered from both a liability standpoint, as well as a tax standpoint. Don’t forget to visit your local Secretary Of State website for further information on the requirements for operating a business in your state. You may also need to obtain a business license, depending on the industry that you are going into. Make sure you speak with your attorney and/or accountant to decide which Business Structure is right for you.

If you plan to apply for Equipment Financing or any other type of Small Business Financing, it is a good idea to open a business bank account. Sole Proprietors are generally OK with operating their business from a personal bank account when it comes to financing. If you are not a sole proprietor, the financial institution will most likely want to see that you have a business bank account. This not only helps validate your business but the lenders will also want to see what your average bank balance is and if you have any over-drafts on the business account. If you are a startup business, you should try to open your business bank account with at least $1,000. The bank will also need to see proof of ownership of the business with either your filing information from when you created your business structure/entity, or your tax ID number, also known as EIN (Employer Identification Number). You should contact your local IRS Field Office to apply for your tax ID number if you are a sole proprietor and have not already done so.

The above steps are clearly the level above the foundation of Opening A Small Business. You will already know the type of business that you are going to run and will have researched it heavily before taking the above steps to Opening A Small Business.