1. Determine your Business Structure

When you’re getting started, your business structure will dictate the taxes and regulations around how your business operates, with each having their own advantages and disadvantages.

The specifics around business structures can be complex and you’ll save time and headaches by consulting a legal/accounting professional before starting your business. That said, here’s the three most common Business Structures you should understand:

Limited Liability Company (LLC): LLCs protect your from personal liability, if your business faces bankruptcy or lawsuits your personal assests (car, house, savings account) won’t be at risk.

Sole Proprietorship: A sole proprietorship means you completely control your business, meaning your assets and liabilities are not separate from your personal assets. This is the recommended choice if you’re starting a low-risk business and want to test the idea before creating something more formal. Keep in mind, it’s also generally harder to get a bank loan as a sole proprietor.

Partnership: If you have a business partner(s) it’s best you look into either a Limited Partnership (LP) or a Limited Liability Partnership (LLP), here’s a brief look at the difference between these two types of business partnership structures:

  • Limited Partnerships:
    • Have one general partner with unlimited liability, and all other partners have limited liability.
    • Profits are passed through to personal tax returns
    • The general partner must pay self-employment taxes.
  • Limited Liability Partnerships:
    • All owners have limited liability.
    • Protects each partner from debts against the partnership (you won’t be responsible for the actions of other partners)

Source: US Small Business Administration

2. Name your Business

Next, it’s time to choose the ideal business name,  it’s typically a good idea to consider something simple, catchy and clear. That way people who see the name know what to expect and can easily remember it for the future.

In addition, you’ll want to come up with a name that won’t become obsolete any time soon. Try to avoid the names of specific technology, like DVD, as it will render the company name less likely to gain attention as the technology itself becomes less popular to the general public.

Once you’ve come up with a few name ideas, it’s a good idea to make sure that your name isn’t already in use. This is just a good way to make sure your name is original and avoid any issues with names, logos or similar aspects that may already be trademarked by a company.

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3. Put Together a Business Plan

Your next step will be to get started on an overall business plan. As you’re doing this, feel free to start with the basic picture in your mind’s eye and then come back and fill in the details. In the end, you should have a complete, detailed plan that covers just about every aspect of your company.

Doing this will provide you with a clear picture of how your business is going to run. If you need to take out a loan for starting your business, or otherwise ask for money from others, then this plan can also be used to show them that you’re serious about making the endeavour successful.

Some of the topics you’ll want to make sure to cover in your plan are hiring, the production of your products, marketing and sales, plans for the profits that are made by selling your products or services.

Finally, make sure you put together a detailed image of all the startup costs that will need to be covered for your business. Include things like rent or purchase of a building for your business, maintenance costs, the price of materials and production, and anything else that may apply to you.

 

Don’t Forget Accounting!
The way you handle finances for your business can make or break you with regard to success. Because of that, it’s going to be key to make sure you have a great way to track where funds are going, how much is coming in and ensuring that everything is adding up correctly.

However, not everyone who starts a business is the most comfortable handling the numbers like this. If you are, then that’s fantastic! You’re off to a great start! Otherwise, don’t worry! You have options that can help with making sure funds are kept track of without you having to crunch too many numbers.

Using a program like Xero can be helpful with keeping an eye on money. These software options are typically objective, so they’ll show you where every penny goes in clear detail. They can even help you with taxes!

4. Register your Business

When you have a solid name and a solid plan, it’s time to register your company. This can be a bit of a complicated process, so it’s worth making sure you have all the paperwork you need, and resources you can use just in case you need a little bit of help along the way.

The process is going to be a little bit different depending on the type of company you’ve decided to start. For example, the process of starting an LLC can be a little simpler than those for starting a corporation. In either of these cases, looking for a registered agent that can help to guide you through it may be useful.

When you figure out the forms you’ll need to complete, you can find a handy list of them through the Ohio Secretary of State Website, which also lists the fees involved with each one. Using those, you’ll be able to get started on all the paperwork. Make sure to take your time and seek out help if there’s anything you don’t understand!

It can also be a good idea to make sure you have a list of Ohio business resources on hand as you work on the forms!

Ohio Business Taxes
As you’re getting started with putting together your business plan and handling paperwork, you’re also going to want to make sure you’re familiar with the taxes that are relevant to those who run businesses. These taxes can be quite a bit different from what you may have experience with already.

Furthermore, the taxes can differ based on the type of business you’re running. For example, any business that hires employees will need to consider things like severance and employer withholding, but only those that serve alcoholic beverages need to plan for taxes related to the substance.

Consequently, it’s wise to make sure that you have a handle on the taxes that will apply to your business. You can find a list of relevant business taxes on the Ohio Department of Taxation website, which will provide information on the different taxes so you can become familiar with them all.

Do keep in mind that some of the tax categories listed can split up into smaller sections. That way, you can really get a clear image of each tax that might apply to your business. This is going to be very important when looking at the amount of money you’ll need to make to cover everything!

5. Getting Your Federal Employer Identification Number

One aspect of starting a business that is essentially the same no matter where your business is located is the need for an EIN, or Employer Identification Number. This is the number that will be used for taxes and other business endeavors that connects directly to your company.

This number is much like a social security number. Officials can look it up and find your business directly, making processes that use it much easier than simply trying to provide a name or other method of identification.

When you’re ready to apply for your EIN, there are a few methods that you can use for obtaining it. Many opt to apply for it online using the EIN Assistant. This method can be quicker and more reliable, but some may still prefer to apply for it by mail or fax.

Keep in mind that if you’re having trouble with the process, you can always contact someone to seek out help before continuing. This is really a good idea so that you know what you’re doing before signing anything or submitting any applications. In addition, this is also a good time to make sure you have all your paperwork in order, and all the other steps covered!

The process of starting your own company can be a long one, but it can also be very rewarding. That is especially true if you’ve taken plenty of time to prepare and map out the way your company will run. Good luck, and enjoy taking your first steps into owning your own business in Ohio!

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