Building a financial foundation is the key to keeping your business operating long term. There is no denying it... we all have to answer to the IRS. It's way better to send your annual income reports confidentially with the support of a well-balanced financial foundation.
From SS's experience, the task of "building" a financial foundation is a "goal" for most business owners. The business owners we have worked with [while building their websites] haven't completed these tasks yet. Some business owners have explained they haven't completed these steps because they're fearful it will be too expensive or too complicated.
At Stack Strategies, we have a goal of helping small business owners thrive independently. We LOVE being in business for ourselves with the pure intention of taking control of our future. YOU can take control of your future, too! In order to do that, you must do your due diligence as a business owner and organize your business finances. The sooner the better!
Before we go on, we wanted to take a moment to mention that Stack Strategies is in no way a financial advisor. Stack Strategies Company is a registered marketing consulting company! You can/should always consult a banking representative, account, lawyer or other legal representative to ask specific business questions. SS is writing this blog post to simply sharing our experience in building Stack Strategies Company's financial foundation.
To build a small business financial foundation can take time, energy and, sometimes, a lot of effort. It is an on-going process. When you start formally building your business, the benefits are endless. These three steps are the answer for how to build a financial foundation for your small business...
1. Start with registering your business with your Secretary of State's Office
To register your business with your state is to formally obtain your LLC, company, corporation or other type of business. Choosing the right business type is important to your long-term goals. Discussing the type of business you want to be is best done with a legal team. If you have no where to turn, Stack Strategies recommends Legal Shield for all business start ups. They can help guide you to the right business type and file and launch your business for a fee.
If you're already sure of registering your business as a LLC, you can easily complete your paperwork on your state's secretary of state site without having to go through a legal team. Depending on the nature of your business, your state may require additional licensing (such as a Seller of __________ License). Be sure to visit your state's ".gov" site, and not an ad that's disguised as your state's site.
Once you register your business, you have access to obtain important documents like the "Certificate of Good Standing" which certifies your business's registration. Sometimes, to get access to these documents, there is a small fee that must be paid prior to downloading the file.
2. Obtain your EIN Number with the IRS
Once your business is registered in your state, it's time to federally register the business. To be federally registered is to have an EIN (Employer Identification Number). This nine-digit number is worthy of comparison to your business's social security number.
You can only apply for an EIN for your business once. Once assigned an EIN number, that is the only one you will be assigned. Be sure to write your EIN down and keep it in safe, secure place. You should, also, receive a letter from the IRS with this number. No one should ask you to see this letter. It's more/less confidential similar to your SSN card. You will, however, be asked to provide your number when applying for a bank account and whenever you're applying to earn an income through your business.
You can apply online for an EIN number with the IRS here: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
Be careful not to "google it" and click on an ad that's disguised as the IRS. The only place this should be done is through the IRS portal directly.
3. Get a Business Bank Account
The next step in building your financial foundation is getting a real business bank account. This is not a PayPal bank account or a Cash App card. It's a real business checking account that you will use to manage your business's income and expenses in one place. Depending on the nature of your business, you may want to choose a nationally recognized financial institution. Stack Strategies LOVES using Chase's Business Checking Account for its convenience. Chase's online system is easy to use and allows you to accept money via direct deposit, ACH and a payable link (similar to PayPal) without the hidden fees.
Applying for a business checking account with Chase can be done online. You'll just need your business's information, your information, a copy of your Good Standing Certificate (see registering with the Secretary of State above) and your EIN number. Chase may follow up by phone and/or email. Then, your new business checking account will be ready for use! Your business debit card will be sent via mail.
Once you've completed these three main steps, your small business is getting financially OFFICIAL. Once you have an EIN number, you can apply to become an affiliate of companies and earn a commission from promoting their products. You could, potentially, apply for small business grants. You could, also potentially, apply for business loans and funding. The sky is truly the limit once you have your foundational steps completed.
To learn more about growing your small business, let's talk about ways to utilize your financial foundation. These elements are critical prior to building a website or developing your marketing skills. We must crawl before we walk and walk before we run.
Happy business building, fellow business owners! Until next time!
Stack Strategies Co. is an online digital marketing company based in Cleveland, Ohio. Stack Strategies creates custom WIX websites, travel agent websites with Travefy, and email automations and digital tools on a variety of platforms! SS leads the way in small business marketing by sharing tips and tricks on our Behind the Strategies Marketing Blog. Connect with us on Facebook, Instagram, Pinterest, and Alignable for business-building inspiration. Or contact SS for your next project!