How to Start Your Own Business, Based on My Experiences: Part 1

In today's economy, the American dream not only consists of owning one's own home, but also now includes the ownership of one's own business from which to profit. While an amazing five percent of this country's citizens have at one time or another owned or operated their own business, the process to doing so successfully is not too easy. When starting your own business, regardless of the nature of that business, there are certain steps that need to be taken in order to make sure your business is legal.

Uncle Sam needs to get his piece, too

When starting a business, you need to make sure that your business is properly registered with the state and city business offices that you plan to operate in. Registering for a state business license is readily available online and is offered for free when you register online with your state tax office. When you are registering your business online, you need to look for two different registration forms. The first of these forms you need to look for is the Fictitious Name Registration form. You will need to use this form if you plan to do business under and name other that your full legal name. This registration can usually be done online but also requires you to mail in a formal signed copy of the form as well. Another note on this form in that there is usually a nominal fee of about $50 charged and the name will need to be renewed every five years in order to keep the rights to the name secured.

The second form that you need to look for online at the state level is the Tax Sales and Use certificate. This form assigns a tax liability to the owner of the business just the same way as your employer assigns a tax liability to your earned pay each week. If you attempt to operate a business that makes more than $600 per year without filing the proper tax paperwork, the government can assess serious fines and sentences against you. You can fill this form out online in most states and avoid any fees when using this method. Don't get worried just yet, controlling your taxes is not that difficult so just make sure you get this paperwork filled out. When the processing is complete, you will get a tax certificate and business registration form from the state office that will need to be displayed in your place of business.

After you have received your state licenses to operate a business, you then need to file with your city tax office if you are doing business within the city limits. This process is simple and fast and usually only costs about $10. The city will ask you to fill out a form to register your place of business, the type of business you are running, and the owners of the business. In addition, they will need to see proof of your state tax and business registration paperwork.

In Part 2, I will talk about the process of getting your business location and securing proper insurance for the business.