What to know before starting an LLC

Starting an LLC can be overwhelming when you're stuck on what to do next. While every business is a little different, here are eight items every small business owner can work on to ensure your business has a strong start:

1. Have a basic business plan. You don’t necessarily need a huge document, but you should understand what you’re selling, who your customers are, your competition, and how you plan to make money.

2. Choose a name that’s available. Your LLC name needs to meet your state’s requirements and be distinguishable from other registered businesses.

3. Know who your registered agent will be. Every LLC needs a registered agent to receive legal and official documents on the business’s behalf. You can be your own registered agent, or you can appoint someone else, but this person needs to be available at a set address during business hours so if you can’t commit to that, we recommend using a registered agent service.

4. Research licenses and permits. Depending on what you do and where you operate, requirements may exist at the local, state, and/or federal level.

5. Think about how the LLC will operate. Will it be member-managed or manager-managed? Who owns what percentage? How will decisions be made? An operating agreement can document these details and is required in some states.

6. Plan to separate your finances. Keeping business and personal money separate makes bookkeeping and tax time easier and helps reinforce the LLC as a separate entity.

7. Understand your tax options. LLC taxation can vary depending on the number of members and elections you make. This is an area where talking to a qualified tax professional can be especially valuable.

8. Think beyond formation. Building business credit, finding funding, maintaining compliance, and keeping good records all become part of running the business once the LLC exists.

Starting a business comes with a lot of decisions before you’ve even opened the doors. If you’re stuck on “What should I be doing next?”, ZenBusiness Velo™ can help you work through business questions, get personalized guidance, and help you build as you move from idea to formation and beyond: https://vist.ly/5gbn9

*Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.