Choosing to incorporate your business is a big step toward a bright entrepreneurial future. But it’s only the first step. There are 1.7 million traditional C corporations in the United States, according to the Tax Foundation, so there is a lot of competition. Once you’ve incorporated your business, there are several things you must do quickly if you want to protect your personal assets and build credibility as a business.
Consider these next five steps:
1. Get an EIN
If you plan on hiring employees, an Employer Identification Number is mandatory. An Employer Identification Number, known as an EIN, establishes your corporation’s separate fiscal identity from your personal assets. Furthermore, when you have an EIN, you may use it instead of your Social Security number on client payment forms, which helps protect you. You can apply for your EIN online at the official IRS website. This should be your first task after incorporation.
2. Get licensed
You might be incorporated, but do you have all the permits and licenses you need to legally do business? Don’t get caught operating without a business license, and research what other licenses you need through your local county office or city hall. If you sell wholesale retail or a taxable service, you may additionally need a seller’s permit and a permit for every location you work out of. These licenses are not expensive, and getting one now will save you time, headaches and money down the road.
3. Be accountable
Open a new bank account solely for your business to help keep your personal and business finances separate. Additionally, you can invest in accounting software like Sage One so you can accurately track all your finances. This type of tool also lets you easily send invoices and do your bookkeeping. If you don’t take these steps to protect your finances, you defeat the protections that incorporation is supposed to provide you. Most importantly, keep your money separate and accounted for.
4. Open merchant accounts and credit cards
Getting a businesses credit card makes your accounting far easier and helps maintain the critical separation between your personal and business finances. Additionally, you should open a merchant’s account with a credit service company so your customers can make easy credit card payments.
5. Plan for the Future
With all these other steps to put in place, it’s easy to forget that the most important aspect of your corporation is you. Plan for the future and take care of yourself along the way. It’s critical that you have some idea of where you want your business to go in the next five years.
Before you even open your doors, plan out ways you can strive to reach your five-year goal and benchmarks you can hit along the way. Review your progress once a year to see how far you’ve come and if you are still on the path to meet your goal. Of course, you can always rethink your business plan down the road, but it still helps to have a plan to help you along the way.