When you first started your business, you likely needed to file a mountain of paperwork, choose a telling name, and select your business structure. Although you have the first steps of creating a business behind you, you will need to maintain your progress and push forward. At this stage, aspirations meet reality, and you’ll need to manage several pragmatic and strategic concerns successfully.
Now that you’ve established your business, there are a few steps you need to take to ensure that you reach that dream. ZenBusiness was designed to help businesses flourish, with the right team of professionals to lend their expertise in matters of finance, taxation, compliance, and more. We’ve created a seven-step guide to help you manage your business every step of the way. You will learn a variety of essential steps for running a business, including why you should set up a business bank account and how to maintain state requirements and business compliance. To see what it takes to run a business right, and learn how ZenBusiness can help, dive into the seven steps presented below.
1. Set Up Your Business Banking
As soon as you begin spending and accepting money as a company, you should open a business bank account. You can open a business account for checking, savings, credit card, and merchant services, which allow your business to accept credit and debit card transactions.
Even if you run a small business, getting a bank account for your business can prove beneficial.
Benefits of a Business Bank Account
Having a separate, professional bank account enables you to do more than a standard personal account:
- Separates your personal and business assets: By getting a business bank account, you will protect your personal assets from your business by keeping them separate from each other.
- Separates business and personal purchases for tax purposes: Running a business means you will need to handle taxes differently than when you had an employer. You will need to pay federal, state, and other taxes. Having a business bank account can help you separate your personal funds with other business funds and estimate quarterly taxes.
- Integrates with your bookkeeping systems: Budgeting software can be very helpful when running a business and integrate with your business bank account to track your spending and ensure that you’re on track for the month. Ultimately, a business bank account simplifies your accounting by allowing you to automate your business’s bookkeeping. All transactions can be imported to software like Xero, QuickBooks, and Quicken.
- Allows multiple users to make deposits and withdrawals: A business bank account allows you to authorize employees to handle bank tasks for the business.
- Allows you to receive payments: Customers can pay you with checks and credit and debit cards with a business account.
- Projects professionalism: Having a business bank account adds a level of professionalism that a personal account just doesn’t have. With a professional account, clients and customers can be assured that you provide legitimate services.
ZenBusiness has partnered with LendingClub to provide small business owners with access to discounted banking services. This business bank account was designed with small businesses and startups in mind and comes with free, unlimited transactions, online and mobile banking, a free debit card, and more.
Requirements for a Business Bank Account
When you set up a business bank account, you’ll need a few important documents to start. Many of the documents are completed when filing your business with the state. Here are some documents that banks may ask for:
- Your Employer Identification Number (EIN): An EIN is a unique number used to identify a business entity and can be completed online with the IRS. However, before you apply for an EIN, check with your state to verify if you need a state number or charter. If you are a sole proprietorship, you may be able to submit your Social Security number instead of an EIN.
- Your Articles of Organization or Incorporation: The Articles of Organization is used to form a limited liability company (LLC). To submit this form, you must pay a filing fee to your state. The Articles of Organization often include information about the LLC, like the company’s name, address, and registered agent.
- The Articles of Incorporation is a legal document used to establish a C or S corporation. This document contains your basic business information, including the company address and the number of shares.
- Your Operating Agreement, corporate bylaws, or partnership agreement:
- An Operating Agreement is an important LLC document. Although no state requires you to file an Operating Agreement, several states require that you have an Operating Agreement in your personal records.
- Corporate bylaws are a legal document written and adopted by the owners and board of directors when a corporation is formed. ZenBusiness provides a template to ensure that your corporation has a comprehensive guide.
- A partnership agreement is registered through the state. Partnerships have ownerships by percentage. Partners can hold any percentages, as long as they add up to 100%.
- Your business license (if required in your area): Although not every state requires business licenses, most small businesses must have a combination of licenses and permits. These authorizations can be applied for through federal, state, and local governments and agencies. The type of permit you may need depends on your business activities.
- A banking resolution (if necessary): A banking resolution is the easiest way to authorize someone to open a bank account and provide a signature for the business. The document is created by the owners of the business or board of directors for a corporation.
The banking resolution is often drafted during initial meetings and can be altered during future meetings.
Consider a Business Credit Card
A business credit card helps ensure that you have access to funds, can build credit, and tack expenses on one account.
- Flexible funds: Access the funding that your business needs.
- Build credit: Establish business credit.
- Track expenses: A business credit card will automatically record all of your expenses.
2. Take Charge of Your Accounting and Bookkeeping
Accounting and maintaining bookkeeping records is an essential practice for any business. Although it can be overwhelming, there are many tools to help you manage bookkeeping. With the right tools, bookkeeping can be just another step in your business process.
Bookkeeping is the process of recording and organizing a business’s financial transactions. It’s the primary way that business owners can determine if their business is profitable. As a result, it can help business owners stay on top of their finances and act early to any challenges down the road. Additionally, bookkeeping helps you to identify areas of profit expansion. All in all, clear financial reports can help you find critical areas of improvement.
Choose Your Accounting and Bookkeeping Approach
There are different approaches that businesses can take to maintain their accounting records, including:
- Hiring an employee with accounting expertise: Hiring an accountant or a certified public accountant (CPA) can help your business in several ways. Accountants can help with bookkeeping and maintaining financial records and also with tax planning advice. Furthermore, they can help prepare your business and file business taxes when the time comes.
- Hiring an outside accountant or firm: Accountants are another option for businesses. Outsourcing an accountant allows you to pay someone an hourly rate. Accountants provide valuable financial insights.
- Using digital accounting programs: Digital accounting programs are a cost-effective solution for small business owners. With accounting programs, you can take a more hands-on approach to managing business finances.
When given these options, many small business owners have to choose between paying another employee or using an accounting program and missing out on valuable insights.
Manage Accounts, Invoices, and Transactions
Like all businesses, small businesses must stay on top of and monitor their bookkeeping. It’s especially important to stay on top of day-to-day money management. Whether you hire an accountant or choose ZenBusiness’s accounting and bookkeeping services, you will need to ensure that your account is properly managed.
Next, review your costs and find a way to track your business expenses. Once you have that figured out, make financial projections. With clear projections, you can craft a business plan to help you address future issues. In addition, ensure that you’re keeping up with invoicing. Send out invoices as soon as possible after you provide the good or service, and follow up if you must.
From there, to keep pace with your business’s finances, you’ll need to monitor these:
- Accounts receivable: Accounts receivable is the amount that is owed to a company after they provided goods or services. Businesses should record the money that they are owed as accounts receivable.
- Accounts payable:Accounts payable occurs when a company orders and receives a good or service. The supplier of the good or service, or the creditor, is owed by the company. Account payables are essentially a credit balance.
- Business credit: Business owners can receive business credit if they have a separate line of credit for their business. Unless you have taken steps to avoid this, your business credit is linked to your personal credit. By establishing a business credit card, you can separate your personal credit from your business credit. This can help you if you miss payments on either card, as the line between the two is severed. For instance, you might miss payments for your personal card, but it will not impact your business credit score.
- Bank reconciliation: Bank reconciliation occurs when matching the balance of a business’s account records for a cash account to the corresponding information on a bank statement. This is a great process to ensure there are no differences between the two. If you spot a difference between the records, it’s important to fix the mistake. This helps to detect potential fraud.
- Payroll: Payroll is the total amount of compensation that you will need to pay employees. Payroll periods can vary from business to business. For instance, some businesses might pay workers weekly, while others choose to pay bimonthly. Compensation can vary from month to month, depending on bonuses, time worked, overtime, and more.
Regardless of how large your business is or its industry, it’s vital to stay on top of your finances.
Keep Your Books Up to Date
Starting your own business comes with a lot of paperwork and additional stress you might not have expected. Every moment of your time is valuable, and that doesn’t change when you’re in charge of the payroll.
If you find yourself overwhelmed or without the time to tackle these time-consuming tasks, ZenBusiness’s accounting and bookkeeping services can help you close the books each month.
Once you’ve signed up for this service, an accredited CPA will join your team. Aside from maintaining the monthly reporting and bookkeeping, your CPA will perform a needs analysis. Essentially, your CPA will determine the correct categorizations, dashboards, and reports for your unique business needs. They’ll offer insights so that you can continue to improve your business model and adapt to continue well into the future.
Regardless of how large your business is or its industry, it’s vital to stay on top of your finances.
3. Insure Your Business Properly
Business insurance can help protect you from the unexpected. Whether your business deals with natural disasters, accidents, or lawsuits, insurance can help protect your company.
Common Types of Business Insurance
Choosing a business structure like a corporation or an LLC will only protect an individual and their personal property in the event of a lawsuit. Unfortunately, they do not protect your business. In the event of a catastrophe, business insurance can protect your personal and business assets.
The federal government requires every business with employees to have unemployment and disability insurance, and all states but Texas require employers to have workers’ compensation insurance. Some states might require additional insurance; however, the laws vary state by state.
We recommend visiting your state’s website to verify if you need additional insurance. Although it’s not always mandatory to obtain multiple forms of insurance coverage, it’s important to protect yourself and the business you fought hard to build.
Some of the more common coverage types include:
- General liability insurance is available to any business. General liability insurance protects against a large variety of things, including the financial loss resulting from bodily injury, medical expenses, libel, slander, defending lawsuits, property damage, settlement bonds, and judgment.
- Product liability insurance is offered to businesses that manufacture, wholesale, distribute, and retail a product. This insurance is helpful if a defective product causes injury or bodily harm.
- Professional liability insurance is offered to businesses that provide services and protects against financial loss as a result of errors, malpractice, and negligence.
- Commercial property insurance is designed for businesses with a significant amount of physical assets and property. With commercial property insurance, businesses are covered against loss and damage of company property in the case of multiple events — such as smoke, a wind storm, hail storm, vandalism, or civil disobedience.
- Home-based business insurance is valuable to businesses that are run out of the owner’s home. It’s essentially coverage added to the homeowners insurance to offer protection for a small amount of business equipment. Additionally, it covers liability for third-party injuries.
Combining Coverage With a Business Owner’s Policy
The Business Owner’s Policy (BPO) is available to home-based business owners and most small business owners. It combines the owner’s insurance package of typical coverage options into a single bundle, saving you money and simplifying the process.
ZenBusiness and the Commercial Insurance Center offer BOP insurance to protect your business with a bundled option.
Protect your business with:
- General liability
- Commercial property
- Plus, more coverage options based on your needs
This is an all-in-one solution that saves you money while customizing your insurance plan based on your needs.
4. Protect Your Business’s Name
A business name is typically the first thing potential clients learn about your business. Your business name should reflect your brand, creativity, and industry. Once you’ve chosen your business name, it’s important to formally name your business to protect it from competitors.
Trademark Your Business Name
By trademarking your business name, you can protect it at the state and federal levels. Trademarking your business name prevents other businesses, especially those within your field, from using your name and other aspects of your branding.
Unlike copyright, trademarks do not expire after a certain number of years. That being said, you will need to continue to use the trademark in commerce and file required registration maintenance every five years.
Look up your potential business name here to see if it’s available for federal trademark or look up the office overseeing trademarks in your state here to see if the name is available at the state level.
Manage DBA Compliance
A business can use a “doing business as” name in addition to its legal name. Using a DBA name allows you to use a different name, other than your legal name, when you’re conducting business. A DBA name can make your business more credible and add additional legal protection.
Why should you have a DBA name?
- You can launch a new business or brand quickly with flexible branding.
- DBA names act as alternative names. Because of this, DBA names don’t require separate tax filings or IDs.
When you file a DBA name in most states, you’re establishing your use of that business name. Registering a DBA name is a quick and easy process, but exact steps can vary from state to state.
Register Your Website Domain Name
If you plan to have an online presence, you need to register a domain name for your business. Domain names can be purchased from a domain registrar and are offered for a minimum registration period of one year. However, some companies offer up to 10 years of domain name registration.
Since domain names are pretty cheap, it’s a sound investment, especially in the modern age. You’ll want to ensure that you choose a domain name that aligns with your business. It’s essential that you act quickly so that a competitor, or an opportunist hoping to sell that domain name, won’t purchase the name before you.
Why do you need a domain name?
- Protect your brand so that no one else can purchase your business name online
- Creates an online presence for your brand
- Promotes your business as a platform to sell your services and/or products
When purchasing a domain name, you’ll want to make sure that you’re using a reputable service. With ZenBusiness, you can add privacy to your domain name, preventing your personal contact information from becoming public. This secures your information and helps protect you from spam, scams, and blocks unwanted solicitations.
ZenBusiness also offers a domain name registration service. It’s a fast, easy way to secure a domain name for your business without worrying about the technical details when purchasing a domain name.
5. Establish Your Web Presence
In the information age, it’s important for businesses to utilize today’s technology and create a web presence. ZenBusiness makes it easy to start a website for your business by automating the website with the business information you provide us. From there, use our easy-to-use website editor to customize your site.
Creating a website is a great step toward building your web presence, but it doesn’t stop there. A blog is a fantastic way of spreading the word about what you do. Make sure to update your blog regularly. Additionally, you’ll want to start engaging on social media.
Some businesses might find that LinkedIn is a great asset in promoting their business, while others might find more success with Instagram or Twitter. Determine your audience and what platform they frequently use and build your business presence there.
Build a Website
A webpage builder can help you build your website presence in no time. A website not only helps improve your business credibility but can also showcase what makes you unique. Share your story and why you are passionate about what you do and promote your work to potential clients.
In the past, making a website meant that you had to hire a coder and spend hundreds of dollars just to create a site that you wouldn’t be able to maintain. ZenBusiness has made it easy to create a webpage for your business for a low annual price.
- Automated creation: We automatically create a website using your business information.
- Customizable features:Customize and maintain your website using our intuitive website editing tool.
- Mobile-friendly design: Regardless of the size of their screen, potential customers will learn about your services or products on any mobile device.
Set Up Your Business Email
Setting up a business email that matches the name of your business adds credibility to your company. It shows how professional your business is and proves to potential clients that you pay attention to detail. ZenBusiness’s business email address offering gives you such an email address for a low annual fee. The ZenBusiness business email account also helps block spam and unwanted emails, avoiding the cumbersome task of weeding out potential clients versus spammers.
- Track business contacts: Track and organize contacts with the address book associated with your account.
- Sync business calendars: Schedule, sync, and share your calendar via your email software on any device.
- Make a professional impression: Add credibility to marketing efforts and email communications.
Highlight Your Business on Other Platforms
Social media empowers you to share information about your business and interact with your customers in real time. Setting up a website and professional email is just one step to form a cohesive brand image, but setting up your social media presence is another. In today’s world, it’s important for businesses to use social media as a way to market their services and products on sites like Instagram, Twitter, Facebook, and LinkedIn.
Why should you promote your business on social media?
- Attract more customers
- Gain insightful customer feedback
- Build customer loyalty
- Improve market reach
- Increase website traffic
However, you must be prepared before you launch your social media presence, as it usually needs planning. Before you jump into using social media, we recommend defining your marketing strategy. Additionally, you’ll need to keep up your business presence and post often.
6. Stay Compliant With State Requirements
Unfortunately, your filing requirements didn’t end when you formed your business. You’ll need to maintain consistent compliance to maintain your good standing as a business in your state. Some recurring filings may include: annual report or biennial statement, statement filing fees, franchise tax, and Articles of Amendment. Since annual filing requirements are based on your state and business structure, there isn’t a quick guide to move you through the process.
ZenBusiness knows how ongoing filings work and has a plan to help your business remain compliant.
Filing Your Annual Report
The annual filing report is required by most states, often with an accompanying fee. Depending on your state, you may have to pay taxes and file the annual report to maintain good standing. If even the slightest piece of compliance material is missed, the state often imposes penalties and fees.
Occasionally, the state can revoke the company’s right to conduct business. Some states will set the due date for this material on the anniversary of the formation date, while other states have a specific date in the year for all businesses to submit this information.
Because requirements and dates differ greatly state to state, we recommend visiting the website for your state and verifying your compliance requirements.
Making Important Amendments
An amendment enables you to change the information in the Articles of Incorporation/Organization and other documents that you had to file with the state. If your business address, name, or a member changes, you will usually need to file an amendment.
Altering the Articles of Incorporation/Organization doesn’t need to be difficult or time-consuming. Instead, ZenBusiness can handle the necessary paperwork, as we have a team of experienced professionals ready to help you manage amendments with the Secretary of State.
Keep Permits and Licenses Up to Date
Depending on your location and business nature, you may need to possess several business licenses to operate legally. If one of those lapses without your noticing, your business could be in trouble. With ZenBusiness’s license report service, you can keep an eye on all the permits and licenses you need to stay in business.
7. Stay on Top of Your Business Taxes
Businesses are subject to federal, state, and local taxes. Given that businesses may be subject to multiple types of taxes, it’s important to determine your tax obligations.
General types of business taxes:
- Income tax
- Self-employment tax
- Estimated tax
- Employer tax
- Excise tax
Since some tax payments are due throughout the year, it’s important to know your tax obligations. Understanding your tax requirements is essential to the financial health of your business.
Choose the Right Tax Structure
Depending on the business structure you’ve chosen, your business can be taxed accordingly. It’s important to understand the implications of your business structure to meet your tax obligations.
Here are common taxation rules:
- The owner must pay personal income tax on all net profits in a sole proprietorship.
- Members of a limited liability company (LLC) have the same single taxation as partners in a partnership, unless they choose to be taxed as a corporation.
- An S corporation distributes income among the shareholders and avoids double taxation.
- C corporations are taxed separately as a business, and then the profits are taxed again once they are distributed to the shareholders. This is called double taxation. A B corporation has no tax distinction.
- A sole proprietorship, partnership, LLC, or corporation can be certified to be a B corporation, so you would just be taxed as whatever your entity structure would require.
Maintain Clear and Consistent Records
When it comes time to file your taxes, you’ll want clear financial records. Maintaining complete and accurate records can help you quickly and efficiently file taxes, regardless of your business structure. The IRS conducts tax audits and requires various documents from you, so it’s important to keep complete records.
The IRS usually asks for documents to support the income, credits, or deductions that you claimed on your tax return. Organizing these records will speed up the process and prevent any misunderstandings or missing documents.
Get Accounting Support
When it comes to running a business, no matter how large, you may want to consider a professional’s help. Not only will you want help in the event of a tax audit, annual filings, etc., but you may also benefit from accounting services to help your business grow.
We offer a no-obligation accounting assessment to review your bookkeeping, accounting, and tax needs. Once you hear from a licensed CPA, you can decide if you want to stick with us to blossom.
Run Your Business Right With ZenBusiness
ZenBusiness is prepared to help you every step of the way when running a business. Although there are many steps to create and maintain your business, rest assured that you are not alone. With the myriad of helpful tools that we offer, we can help your business grow with you.
Starting and maintaining a business can take the fun out of owning a business. With ZenBusiness, we put the power back in your hands.
We use the most modern technology and automation to provide you with fast, low-cost services to get the job done. We’re here to help you grow. Read our Grow Your Business page to move your business forward.
At ZenBusiness, we’re a passionate team dedicated to helping entrepreneurs realize their dreams. We strive to make business formation affordable and easy to help owners make the plunge into creating and growing their businesses.