A former student said he was leaving his previous (family) firm and starting out on his own. He has all his equipment and he's taking some customers with him. He asked me, "How long would it take me to get started quickly?" It could take as little as a couple of weeks, if the gods are kind. Let's assume he already has a business name Here's what he needs to do:
1. Find a Location. You need a location for your business, unless you are working from home. It should require a minimum amount of work to make it suitable. TIME NEEDED: Days/Weeks
2. Start as a Sole Proprietor. If you want to get your business started quickly, don't spend time waiting to become a corporation or an LLC. You can start as a sole proprietor without any paperwork at all. After you get your business going, you can talk to an attorney about more formal business forms, but you don't need to do that at the beginning. TIME NEEDED: NONE
3. Apply for federal, state, local licenses and permits. The list is relatively short:
- Apply for your Employer ID number (if you will have employees). You can do this over the phone or online and get the number immediately. TIME NEEDED: A couple of hours. Print out the application, go through it, then apply online or by phone.
- Apply for state sales tax, vendor permits, if you are selling products or services that are subject to sales tax. TIME NEEDED: A couple of hours. Most states let you apply online.
- Apply for local licenses and permits, like occupancy permits, for example. TIME NEEDED: A few days to a few weeks, depending on the number and type of permits, and the need for zoning changes.
4. Get a Business Checking Account and Credit/Debit Card Processing. Even for a sole proprietorship, it's a good idea to get a business checking account and keep business and personal expenses separate. That way, if you switch over to another business form, you won't have to make the switch to a business checking account at that time. And talk to your bank about credit/debit card processing services. Most banks have these services. TIME NEEDED: An hour or two.
5. Set up Your Financial System. It can be as simple as buying bookkeeping software like Quicken. But you need a way to keep track of sales and expenses right from the start. It's a lot easier than going back and catching up later. TIME NEEDED: A couple of evenings, depending on your familiarity with the software.
If you devote yourself diligently to getting started, and you work on the KISS PRINCIPLE (keep it short and simple), you can get started in a few weeks. Then the fun REALLY begins!
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interestingly enough My fiance and I were doing research on how to start an LLC. After a short conversation with a Lawyer yesterday and a little internet research know-how (thanks about.com and dr jean) this morning a light went on. We realized that the state we were applying for allowed us to file online and we already had all our answers. The short of the story is with a few hours (minutes even) of study, you can save yourself hundreds of dollars. We could have spent $750, instead we spent $70. TOTAL!