You’ve done your research, found the community you are meant to serve, and are ready to start your business. You are excited, but it can be challenging to know which expenses to incur as a start-up business. Here are my top three expenses you should consider as priorities if you are a business in the District of Columbia, Maryland, and Virginia.
1. Creating a Legal Business Entity
It is important to choose the right name for your business for branding purposes. In most states, the Secretary of State is responsible for business filings. However, your business name must also meet state law requirements. Learn your state’s naming requirements and determine if the name you want is available by visiting the state-agency website responsible for business filings.
The business will need an Employer Identification Number (EIN), which is your federal tax identification, to pay taxes on income earned by the business. You will need the EIN to open a business bank account to keep your personal and business assets separate as well.
The state filing fees range from $220 to $600 in the DMV, and (EIN) is free. Also, research if your industry requires any licenses or permits and include these fees too.
Here are the links for state law requirements in the DMV area as well as free Federal EIN:
2. Business Insurance
As the asset with the most value of your business, you must create a safety net to protect your ability to make money. Here are several solutions to consider for inside and outside liabilities.
Liability Insurance to cover legal fees and damages incurred while on your property or using your products
Renter’s and Homeowner’s policies to cover any business loss due to a catastrophic event or customer gets hurt at your home.
Cybersecurity insurance covers cyber-attacks to the identity and finances of the business and client data stolen by an employee or cyber-attack.
An umbrella policy provides an additional layer of coverage.
Short-Term Disability insurance replaces 60% to 70% of your weekly income if you become ill and do not run your business.
Life Insurance to replace your income if you have a family to support.
While you can do some things after filing the lawsuit, it is always advisable to have the strategies and plans in place before they are required. One of the best ways to look at asset protection is to take it as a form of pre-litigation planning.
3. Business Operations
Today, there are plenty of opportunities to digitize or even automate record-keeping using software, making it easier than ever to stay on top of your filing system. These records are vital during tax season and when dealing with the government, but they also help illuminate your regular operations.
There are great software systems on the market that handle sales, quotes, questionnaires, invoices, contracts with e-signature, online payments, basic accounting in a mobile application.
These can range from $150 to $1,500 a year for small businesses.
The two business management platforms I would recommend because they are easy to learn and good for a start-up business are Dubsado and 17hats.
A business management platform will take the repetitive work off your plate with automated workflows, recurring payments, confirmation emails, payment reminders, and more. In addition, this will help you to stay organized and engaged with your clients.
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