Table of contents
Successful businesses start with a solid foundation. Since this takes time and money, your goal should be to complete everything as quickly as possible, so you can devote your attention to running the business and generating revenue.
It is essential that you develop your company in the correct sequence. You will repeat and correct past steps if the foundational data is not finalized first. Before completing the other pieces of your business model, you must select your business name and address, logo, domain name, email address, and telephone number. Armed with these essential pieces, everything else will more easily fall into place.
Your Brand Name
The most straightforward brand name to establish is your birth name - i.e., John Doe, LLC. Generally, if it isn't EF Hutton or Charles Schwab, you should be able to use it without any problem. With your birth name LLC, you can always file a DBA or “doing business as” registration with your Secretary of State and select a different public business name. Thus “John Doe, LLC DBA My Business Name.” In fact, you can have several DBAs with a single LLC, and you can file these concurrent with or even after the filing of the LLC.
If you have a business brand name in mind, understand you may or may not decide to trademark it. Generally, the more exposed geographically, the more you'll need to file for a trademark. For example, if you offer a U.S. SEO service over the Internet, you may want to get your name and logo trademarked. If you're establishing “Ted's Diner” and Ted's Diner probably exists in 10 cities throughout the U.S., you're probably safe not filing or may even be precluded. Simply owning a domain name does not establish trademark status and protection.
Determining a brand name is not as easy as it sounds. The best book I've read on brand names if “Hello My Name is Awesome” by Alexandra Watkins. This is well worth the read and could change your company for an also-ran to a prosperous business.
Trademarking is not inexpensive and involves searching Federal records to determine if any existing logo/names conflict with your proposed logo and name. If no problems exist, the logo and name are registered with the U.S. Patent and Trade Mark Office and extend certain legal protections, such as not allowing other companies to use your good name to generate revenue. You can attempt to file yourself, but it is probably better to use a local patent attorney or consult with someone like Attorney Erik M Pelton. The Pelton website is a good resource for learning more about trademarks and tradenames. As noted below, Northwest Registered Agent offers this service at a much lower price and may also be worth considering.
Many excellent graphic artists on Fiverr can quickly provide a trademarkable logo. It needs to be an original design - therefore, no clipart. They will usually state if they offer Trademarkable logos.
Domain, Web Host, and Emails
It is crucial to not only get a domain name for your business but also a Facebook and Linkedin Business Page. This will be used in your marketing efforts.
Many people pass on getting a domain name and will seize a Facebook page, so don't assume that a Facebook page will be available just because you can get the domain name you want. The same goes for Linkedin Business Pages. At a minimum, you should own the domain, Facebook Page name, and Linkedin Business Page Name.
A browser app that shows the availability of domains and Social Media pages is NameVine.com. I find sometimes that these sites are not always totally reliable, however.
It is always desirable to obtain a dot com address and avoid using hyphens in the name. Other viable options include .co, .net, and biz. If your exact name is not available, consider using a modifier. When Facebook started, it had to use TheFacebook.com as its domain name. Domain names and TradeMarks are not the same. It is possible to own the TradeMark and not have the domain, although it may also be possible to demand that the website cease using your name. It's not a matter of the first one there, but who has the trademark?
My preferred way of obtaining a domain name and associated social media pages is to set up a NameCheap account and use their domain name search machine. NameCheap has an excellent reputation, and keeping the domain and hosting in the same facility is easier and quicker to host. At the same time, open your FaceBook Profile and begin to develop a FB Page. If the domain name you want is available, also check it as a possible FB Page name. You'll have fewer problems with Linkedin, but you might want to check that also. If everything is available, you can safely proceed with your desired name as a domain, FB, and Linkedin Pages. Other social media accounts, such as Twitter and Instagram, may also be secured depending on your prospective target market and the appropriate marketing efforts.
NameCheap has other services also that you should explore. First of all their Web Hosting is inexpensive and their support service is extremely good. Subscribe for a hosting account, and you can almost instantly point the domain to the web host. Additionally, you can establish and use free email addresses. Finally, their apps section offers really inexpensive and quality business cards.
A year ago, my exclusive recommendation would have been WordPress, and to be sure, WordPress is used in approximately 40% of businesses. However, several other web companies have enhanced their technology, and my recommendations are now a little more encompassing. Here is what I would recommend at this stage:
- WordPress is free; however, because of its generic applicability, you will always need to modify it with plugins, many of which are paid. In addition to hosting, someone must update all the components and address any conflicts. Two major problems continue to plague WordPress; conflicts and site speed problems, which are possible with any change. WordPress has been developing Guttenberg, its own page builder, and has come a long way. The Kadence theme platform is exceptional and should be explored. You might consider WordPress after reviewing the following options.
- Blogs – The two best systems for blog sites are Substack and Ghost. Substack is free and limited in template designs but has a robust podcast component and excels in SEO and distribution. If you charge for your newsletter, Substack takes a small percentage. Ghost is also free, but you pay an annual fee if the developer hosts it. The templates are more robust, and the site is more feature rich. Ghost doesn't take a cut on paid newsletter subscriptions.
- Single page websites – Many businesses would do well to only have a single page website – their image, what they do, tagline, and links to social media accounts. This is ideal for coaches, graphic artists, designers, etc. The best site for this is Carrd.co, and you can probably develop and publish a site within an hour for free. You can choose a nicer template and still only pay $20 or so yearly.
- Training Sites – Setting up a school account on WordPress is difficult and expensive. The best option here is Teachable.com, which provides everything you'll need in one package. The price is reasonable, and although not perfect, the cost and effort in pursuing other alternatives, such as WordPress and a paid plugin, are not worth it.
- Sales Sites – Although the standard option has always been WordPress and WooCommerce, like the WordPress training site options, they are labor-intensive to set up and maintain. A better approach might be to look at Shopify.com. Again, like Teachable, everything you'll probably need is ready out of the box, and the price is reasonable.
- For general business sites and brochure sites – Two web development sites that have really progressed are Wix and Squarespace. Of the two, Wix is more powerful and more expensive, while Squarespace is more structured and less expensive. For most needs, Squarespace will probably work best.
- Power users – The best site developer for those with graphic art leanings is WebFlow. WebFlow develops clean and fast HTML and CSS code and hosts the sites for a modest fee. However, you never have to do anything to maintain the site - this is the opposite of WordPress. Additionally, these sites consistently run much faster than WordPress sites. If this service had been available earlier, I would probably have used it over WordPress.
Traffic Generation - SEO and Ads
Search Engine Optimization (SEO) for a local business is completely different than a national or international firm. There are several SEO firms, and the prices for their services will most likely astound you. Of all the available firms, I would choose a firm called WhiteSpark. They have an excellent reputation and are more cost-effective than any of the other firms I've been able to review. The bottom line is that a website's goal is to drive traffic; you can either pay for ads like Google LSA or Facebook or optimize the site's SEO and generate organic traffic. Although the organic traffic is free, SEO optimization to develop the traffic will cost. You will have to determine how to combine these two traffic generators. Be aware that paid ads are quicker but will stop once you quit paying for the ads, while SEO takes longer but has a more lasting impact on traffic generation. You'll need both to grow your business.
Business Telephone Number
You can certainly use your personal telephone number for your business, but it may be more convenient to have a business telephone number that is directed to your smartphone. The best service, and a very inexpensive one, is OpenPhone.com. Generally, you're talking about $10 a month to start.
Open Phone is easy to set up and use and has extensive telephone numbers from which you can choose. The site will try to suggest a telephone number for you, but you'll want to look at what's available in your local area code.
Business Mailing Address
Obviously, if you rent office space, this is a no-brainer. However, using a different business address will provide better privacy if you operate out of your home. P.O. Box numbers are problematic since they will not be acceptable for certain Social Media advertising, State registrations, etc. It is better to get a Digital Mailbox like iPostal1.com. This company has many great reviews, and they have effectively partnered with several smaller mailbox operations to offer probably the most significant number of address locations. Another option is to combine this with the various services offered by Northwest Registered Agent, which I discuss below in Business Type and Setup.
iPostal1 offers a smartphone app that allows you to see and direct the mail that you receive at their facility. Since there's a good chance that an actual facility will be close to you, shipping and receiving are also convenient. Their services start at around $10 a month.
Most other digital mailboxes only offer addresses in major locations like NY, LA, Chicago, Dallas, etc., which is only convenient for businesses living in those areas but may offer a more legitimate-looking address.
Accounting and Banking
Virtually any business model you use will require payroll, if not for an employee, then for you personally. You have to have professional guidance in this area because the IRS considers payroll tax a fiduciary obligation. You're the fiduciary, and if you mess up, they will send an agent to you to personally attempt to resolve the situation.
You will need four services: bookkeeping, payroll, corporate returns, and personal returns. You can try to work with a local CPA/bookkeeping service, an internet service such as Bench Accounting and Gusto payroll, or some combination of these options. It all really depends on the complexity of your business and your needs. Generally, Bench is $300 - $400 a month, while a payroll service like Gusto is $40 plus $6 per employee. I've also worked with a CPA firm in Colorado Springs, which handles everything from payroll to S corporation to 1040, starting at around $320 a month. The firm is The Watson Group. I've used them personally for years, and they are excellent and set up to service a web clientele. Generally, you want as few firms as possible handling these functions. Usually, you can reasonably assume two advisory groups will be needed to handle this.
The Internet has made it easier and easier to set up a business account. Two companies worth pursuing are BlueVine and Nolo.co. Both are essentially fee-free and will refund ATM fees. Both have debit cards and most of what you would normally expect from a solid bank. Bluevine even offers subaccounts. Fidelity Investments is also a good alternative and is one of the few which extend their "no fee" concept to include even wire fees, no check fees, no overdraft fees, no fees, period. They are easy to work with online, and you may also want to consider a personal account to facilitate cash transfers. They obviously have an excellent reputation and their support staff has always been helpful. Their one main drawback is they don't offer a debit card unless the account is significantly large.
Nerd Wallet also publishes a review of business bank accounts with recommendations that you might want to review.
Many businesses miss this and realize it only when it's too late. That's too bad because the liability insurance premium for a small business is generally only around $40-50 a month. There are two companies that you can review which are available through the Internet and highly recommended: Next Insurance and Thimble. This is cheap protection and is truly a must.
Business Type and Setup
Most small businesses should probably consider registering as a Limited Liability Company (LLC) and choosing a Sub Chapter S election (S Corp).
Why? The LLC, which is registered with your state's Secretary of State, offers personal liability protection, which a Sole Proprietorship (SP) and a Partnership do not offer. Generally, liability is limited to the company's assets, while in SPs and Partnerships, liability can invade the proprietor's or partner's personal property. The SP is also more limited concerning expenses, and all of the SP's net income is subject to Social Security taxes. Partnerships are generally used for real estate ventures, although you can now achieve that more safely by using an LLC with a Partnership tax election. With proper planning, the distributable net income from an S corporation can be allocated between Salary, subject to employment taxes, and Dividends which are not so subject. This takes professional guidance but is a significant benefit of S corporations.
The LLC provides liability protection and allows for the selection of several different tax entities – from sole proprietor to partner to Sub-S to regular Corporation. Generally, you want to be treated as a Sub-S, and it is essential that you avoid being deemed a disregarded entity and taxed as a sole proprietor.
You can certainly set up your own LLC, but it is probably better to work with a firm that can coordinate all the moving pieces for you. For example, not only do you need to get approval from the Secretary of State via the Articles of Organization, but you will need an LLC or Manager-Managed Operating Agreement, timely file Sub-S Election, the Employer Identification Number (EIN), Bank Agreement, Minutes, etc. plus designate a Registered Agent as required by the Secretary of State.
The best firm that I'm aware of, which will even give you the paperwork for free to do yourself (if you want), charges only $475 for filing the LLC, obtaining an EIN, filing the S corporation election, and operating as the Registered Agent. Northwest Registered Agent is a large company with an excellent reputation; they have over 700 employees and 3 million businesses nationwide. For example, their annual charge for Registered Agent is only $125, while other firms I've researched are much more. Their size and years of operation are the reasons for the low fees. Also, three million clients at $125 annually for Registered Agent service alone would generate $375 million.
They also offer a virtual office concept with a digital scan or physical forward of mail at $29 a month and trademark review and filing for $249 plus $250 in USPTO fees, or $499. You'll have to determine how this compares with the trademark attorney detailed earlier, but there is undoubtedly a pricing difference that may be worth investigating. Finally, they offer a Compliance Filing each year which is only $100 plus state filing fees, to ensure that your LLC remains in good standing.
I will note that The Watson Group CPAs also offer an LLC setup. However, although it is somewhat in line with the cost structure of Northwest, it does not offer Registered Agent services. It may, however, still be worth reviewing.