photo credit: valentina cinelli via flickr

We live in a fantastic world don’t we?

We conjure up ground-breaking ideas.

Sit at our computers.

Research.

Plot.

Scheme.

And, bam.

We can have a new business venture, practically overnight.

(Yea, yea…I know it’s not quite that simple).

My point, however, is that between the world.wide.web, social media, and other technology, it’s pretty darn easy to “set up” a business and go. We have a gateway to potential customers and clients that hasn’t always been at our fingertips. Because of this, we see new businesses pop up, literally every minute. Throw up a Facebook page and BAM you have a business. Oh, and if you went the extra step and hired a graphic designer to do a logo, then you are on your way

So you think.

If you’ve recently started a business, one of the first questions you need to seriously ask yourself is…

“Am I starting a business or a hobby?”

The reality is that while there are some true business owners out there (a.k.a entrepreneurs) there are others who are merely Keeping Up With the Joneses. They want a “business” because everyone else has one.

But, starting a business is not for posers.

This post is for legit entrepreneurs.

If you are still reading, then you are probably an entrepreneur. You’ve probably introduced yourself to the world and now it’s time to…

Make sure your business is legal.

Some of the things you must do are merely to stay in the good graces of the government. But, others are for your benefit as well. Either way, I cannot say it loudly enough…

This is not the time to go against the grain. Penalties and fines are not pretty.

Let go of your inner renegade (just for a moment). 

If you are in Chicago, where I am, lucky you. I am going to point you to the exact place to get the job done. If you are St. Elsewhere (my fellow Cee-lo/Gnarls Barkley fans will get it), then you’ll need to research on your own.

Okay, are you ready? Here goes…

one.

I assume you’ve already selected a business name. Now you need the right to actually use that name to do business. You do that by registering your business name with local or state government (this is not the same as registering a trademark, which we’ll cover at a later time).  This step applies to sole proprietors, general partnerships, or professional service corporations, whose business name is different than their own.

For example, my birth name is Patrice. My business name is Creative Genius Law. If I were a sole proprietor, I would need to register the name Creative Genius Law with the county where I am doing business. If I skip this step, guess what? I don’t really have a business called Creative Genius Law. Nor can I have checks written out to Creative Genius Law.

You’re listening now, aren’t you?

In Cook County, Illinois, this process is called an Assumed Business Name. Start that process here.

Again, this doesn’t apply to setting up a business entity such as a Limited Liability Company or a Corporation. It typically comes up when peeps are starting a business by freelancing as an independent contractor and have not set up an actual business entity yet.

two.

Review the business license requirements for your city and determine what is needed for your business. In Chicago, some businesses are not required to have a business license. Take a look at the list here. Most home-based businesses even require a license (details on that are available here).

three.

Apply for an Employer Identification Number (EIN) with the IRS. The EIN is required if you have an employee. I also recommend it for biz owners who do not have employees. No, I am not making you do extra work just because I feel like it.

As a business owner, you may need to provide your Social Security Number in a number of circumstances, mainly involving paying out and receiving money for your hard work. If you have an EIN, you can use that instead and guess what- now everybody doesn’t have access to your SSN. Now, you’ve reduced your risk of identity theft. You can get your EIN in an insta-second here.

four.

Do you have employees on board? (secretly envying all the show-offs). Make sure you register with the appropriate state department and the IRS. If you are in Illinois, then report your new staff with the Illinois Department of Employment Security. Click here to report…

five.

Last but not least, you must also register with your state for business taxes. Click here to register in Illinois.

If you’ve taken all of these steps, congrats. You are on the right track to starting a business the right way.

Virtual high fives for all.