Starting a Business: 5 Must-Haves

Starting a small business with a physical storefront is a bit different than starting a company that relies solely on its online presence. It’s about more than finding a building location and leasing the space. A brick-and-mortar storefront needs a few additional items before it can officially open for business.

Obtain the following assets to start a business.

Entity Formation

Generally, the default entity formation status for entrepreneurs is a sole proprietorship. This is an entity that requires little paperwork and is inexpensive, allowing the owner to be responsible for all aspects of the business. However, the downside to being a sole proprietor is that the owner is held responsible for everything that impacts the business — good and bad.

Brick and mortar storefronts may be privy to more unforeseen circumstances than their online counterparts. Situations can range from sudden lawsuits to natural disaster crises. The best way to protect the business, and its owner, is to incorporate as an entity formation that provides liability protection.

Limited liability companies (LLCs) and corporations are two examples of legal entities that may protect a business and entrepreneur with limited liability. This creates a separation between the business and its owner, ensuring the owner’s assets are not negatively impacted in the fallout.

Federal Tax ID

Tax IDs are often referred to as employer identification numbers, or EINs. Tax IDs allow business owners to hire employees. This will be a necessity if you’re planning to open a brick-and-mortar storefront.

What else can this nine-digit number do to benefit your small business? The IRS issues an EIN to small businesses. It helps identify and track employer tax accounts. This ensures your business is collecting payroll taxes. If you plan to incorporate as an LLC or corporation, you need to obtain a tax ID to identify the business. You may also use a tax ID to open a business bank account and establish a business credit profile.

Trademarks

The unique name of your business, its logo, and design help identify your company and differentiate it from competing companies. Without registration, however, these trademarks run the risk of plagiarism.

Filing to register a trademark at the federal level ensures that the owner of the business receives exclusive rights to the mark. Remember that prior to filing, you’ll need to conduct a name search through a trademark database. A successful search where your trademark does not match an existing or pending application means you may move forward and fill out a trademark application to register the trademark.

Registered Agent

Brick and mortar storefronts receive a great deal of paperwork delivered to their space. Some of this paperwork may be sensitive in nature. Entrepreneurs may prefer to keep these documents confidential. The best way to go about doing that is to appoint a registered agent (RA) for the business.

A registered agent acts as the official point of contact between your business and the state. They accept paperwork on behalf of the business from county and state agencies. Then, the RA organizes the documents and passes them along to the business owner in a timely, professional manner. This ensures no paperwork falls in between the cracks — which can sometimes happen if an entrepreneur attempts to be their own RA — and helps keep the business in compliance with the state.

Business Licenses

Obtaining business licenses — often plural for most establishments — is necessary to ensure your brick-and-mortar storefront may safely operate within a specific city, state, and industry.

The types of business licenses, and permits, that a storefront is required to have varies depending on the aforementioned factors. Companies relating to customer health, like restaurants and nail salons for example, will need health licenses to safely operate. Some professions, like doctors and lawyers, necessitate an occupational license for their specific line of work.

Not sure what other specialty business licenses or permits your company should file for next? Reach out to your local Secretary of State to find out. You can also work alongside the pros at MyCorporation to prepare your business license applications.