Ep. 2: 7 Steps to Setting Up a Legitimate Legal Business The Aligned Female Entrepreneur

Congrats on deciding to create your own business! Let’s talk about the nitty gritty to get it set up so it’s legitimate and legal.
 
LINK to episode 1: How to choose a name for your business
 
*Note I am not an accountant or a lawyer, this is not legal advice and is not a substitution for legal advice. 
 
STEP 1: Legally register your business
 
Search online or find an accountant or lawyer to decide which legal entity to choose: Sole-proprietorship (you are your business and have no employees) LLC (limited liability company, you are not your business, your business is it’s own entity, you have some added protections but still taxed similarly a sole-proprietor) Corporation (S-corp etc, your business is separate and you have some added tax benefits)  
*note these are just the most popular, there are other business entities such as a partnership, non-profit, etc. 
 
1. Register your business with Your Secretary of State
2. Do a search and make sure your business name is not already taken. 
3. Apply for an EIN with the IRS 
 
This is like a social security # for your business and allows you to pay taxes and open a bank account.
 
Learn more and apply here: https://irs.usa-taxid.com/?keyword=irs%20ein&source=Google&adAccount=371-416-3592&network=g&device=c&devicemodel=&mobile=&campaign={Campaign}&matchType=e&gclid=CjwKCAjwrPCGBhALEiwAUl9X0_8lS_7r72sNtGBTakjWunyeGOlCOyRglyXVAOV-Fmf4KN71lxgehBoC8TcQAvD_BwE
 
See if you need a State Tax ID #  
This varies state by state. The process to get a state tax ID number is similar to getting a federal tax ID number, but it will vary by state. You'll have to check with your state government for specific steps. Learn more here (https://www.sba.gov/business-guide/launch-your-business/get-federal-state-tax-id-numbers)




STEP 2: Set up Your Business Bank Account + Credit Card
 
Choose whatever bank you already have accounts with or do a quick search for banks in your area with low rates for business checking accounts. (I use TD bank in Vermont) Ask your bank what is needed to open an account and make sure you have it all ready before you go in and open your account.  Once it is set up you can order checks and set up your business credit card.  Optional: Set up a business savings account as well to save for taxes, planned expenses, or paying yourself.   
STEP 3: Apply for a Business Credit Card
 
Google “highest rated small business credit card” and choose one (I use SPARK from capitol one: https://www.capitalone.com/small-business/credit-cards/spark-miles-select/)


HOT TIP: put ALL biz expenses on your biz card and pay it off with your biz checking account. Put all personal expenses on your personal credit card and pay it off with your PERSONAL checking account. You need to keep biz and personal expenses SEPARATE for tax reasons. 
 
STEP 4: Determine How to Accept Payments
 
Consider an online payment processor over cash, check, or Venmo
 
Paypal for business: I got to six-figures using PayPal for business because you can easily create a button for people to make a payment securely off your website or send the payment link or invoice directly to a client via email to make their payment via debit or credit card. I also LOVE the reports they generate and automations that can integrate with email service providers, and also the “subscriptions button” that allows you to easily set up recurring payments for payment plans. Con: they take a cut for processing the payments.
 
Cash, Check, Venmo or paypal.me: You can also use old school cash, check, new-school Venmo or paypal.me (https://www.paypal.com/paypalme/) to send a secure link to make a payment via credit card. I personally like the paypal.me for starting out since it’s easy to use, secure, and looks professional. 
 
*note since creating this recording my business now uses Stripe (Stripe.com) as well but I honestly find Paypal to be more user fr