Want to learn how to set up your own company?
Setting up a new company in the US can be a long and overwhelming process. And even after you successfully accomplish it and set up your own company, you can’t be sure that it will be a success.
That is why you need to learn how to set up your own company the right way and ensure that you succeed.
Want to learn how?
How to Set Up Your Own Company in 6 Steps
The process of starting a new company varies according to your choice of legal structure, type of business, and state where you register the business.
Still, some steps remain more or less the same, irrespective of these differences. Here’s a generic six-step process on how to start your own company in the US.
1. Refine Your Business Idea
If you want to learn how to set up your own company, then you must have a business idea in mind.
But have you vetted your idea thoroughly?
The first step, even before you learn how to set up your own company, is to vet and refine your business idea.
- Is there a real demand for the product or services I want to offer?
- Are there similar businesses in operation?
- If yes, then what is unique about my offering?
- What is the level of competition in the market?
- Can my new company realistically capture a part of the market?
You will, of course, need to conduct thorough market and competitor research to find these answers. Once your business idea passes the feasibility stage, you can move to the next step in the process to learn how to set up your own company.
2. Choose a Business Structure
Do you want to form a Corporation, LLC, Sole Proprietorship, or a Partnership firm?
You need to choose the legal structure of your new company because that will determine the process that you will have to follow to register your company.
Here’s a brief overview of the popular legal structures that you can choose from:
- Sole Proprietorship: You will be the sole owner of your own company and all the profits, losses, and liabilities will fall on your shoulders. While this provides the greatest control over your company, it also risks your personal assets.
- Partnership: A partnership firm has two or more owners who share the roles, responsibilities, profits, losses, and liabilities of the new company. This dissolves both the risk and the level of control offered by a Sole Proprietorship.
- Limited Liability Company: An LLC is jointly owned by its members, and offers both limited liability and an option to tax the business as either a Partnership or a Corporation. So, if your business fails, you won’t be personally liable.
- Corporation: A Corporation is owned by its shareholders and is a separate legal entity that is taxed as such. It also offers limited liability and protection of personal assets in case the business fails.
Once you’ve chosen a structure for your business, you would need to follow all the legal processes to formally establish it.
But doing this all alone can be challenging. That’s where it helps to have a partner like GovDocFiling that can handle all of these complex processes for you.
3. Create a Business Plan
Before you get started with the process to set up your own company, you should formalize a business plan.
Your business plan should include:
- The reason why your company exists
- Company description
- Products or services that it offers
- The organizational structure
- Sales and marketing strategy
- Funding plans and options
- Financial projections
Basically, a business plan should provide you with a roadmap of how to set up your new company and run it successfully.
4. Pick a Name for Your Company
Before you register your company, you need to choose a unique and relevant business name. Depending on your choice of legal structure, you will need to follow different naming conventions.
Research the naming rules for your state, for your chosen legal structure, and then come up with a unique business name. You will also need to conduct an official search to make sure that no other company uses the same name.
5. Register Your Company
This is the step where you actually set up your new company by registering it with the authorities.
First, you need to apply for a tax ID or EIN (employer identification number), as you will need this for taxation and hiring purposes.
Next, you will need to register your company with your state and federal government (if needed). This is the stage where the process will differ for different business structures and states. Find out the exact process for your new company and follow that to register your business and start your operations.
The final task is to apply for business licenses and permits applicable to your business. These will also differ depending on your industry, type of business, and state of operation. Find out the specific requirements and get all the necessary permits and licenses.
6. Promote Your Company
Your job is not done merely by registering your business. You also need to get customers and spread the word about your new company.
This is where your marketing strategy will come into play.
Start your marketing even before you start operating your business. Have a clear pre-launch and post-launch marketing plan to promote your new business.
You can start with tactics like social media marketing, word-of-mouth marketing, and advertising to spread brand awareness. You can even leverage influencers to promote your products and services.
Also, make sure to create an SEO-friendly website for your company, as it is a major customer touchpoint for any business.
By now you should have a clear idea of how to set up your own company. Simply follow the process mentioned above and you will be good to go.
What you need to remember, though, is to choose a unique and feasible business idea and the appropriate legal structure. These two can make or break your business, so be careful while making these decisions.
Are you ready to take the business world by storm?
All the best!
Brett Shapiro is a co-owner of GovDocFiling. He had an entrepreneurial spirit since he was young. He started GovDocFiling, a simple resource center that takes care of the mundane, yet critical, formation documentation for any new business entity.