The First Year: A Comprehensive Guide To The First Year of Your New Small Business (Part 2 of 2)
In Part 1 of our comprehensive guide, we gave you the lowdown on preliminary new biz stuff. Just to recap, it was researching, creating a business plan, deciding on your structure, figuring out your financial sitch, and finding the perfect name.
Now, we’ll show you how to smash the final steps. We cover everything from legally registering your business and getting the proper paperwork and systems in order to promoting the h*** outta your company, hiring on a team, and much, much more.
Yo, this is the grand finale!
Let’s finish this comprehensive guide to the first year of your new small business so you can totally rock it from here on, shall we?
Register Your Business Name
So, you have your name, and you wanna make it Beyonce official. We’d love it if it’d be as simple as just putting a ring on it 💍 But this is the government, and things aren’t that easy (or fun) 🙄
We’re breaking this section into the three steps you need to know to register a business name. Have your business structure handy for this section, too.
Daylight’s a wasting. Let’s get going!
1. Make sure the business name is available
Remember Ash Smith, the web developer, from Part 1 of our guide? We’re gonna drop him in real quick here. Imagine he spent many nights tossing and turning about whether he should name his company Websites by Ash or Ash Develops. In the end, he finally settled for Websites by Ash. It’s simple, easy to remember, unique, and reflects his future business plans.
So he thinks 💭 My work is done. The name is mine.
Because it would be bummer if someone legally owned the rights to that name and already formed a company with it. Not to mention having the name splayed across social media, promoting that other person’s brand. Reality check: Make sure your business name is available before registering it.
This is what we mean:
Do a business name search. Start by searching for your business name in your state’s Secretary of State website. If someone already snatched it within your state, your filing will be denied.
Do a domain name search. Check domain (URL) and username availability across over hundreds of sites at once - including social media platforms - using a tool like Namechk. (It’s free. No excuses.)
Do a federal trademark check. If you want to expand your business nationally or online, keep in mind that just registering locally will not offer you brand protection outside of your state. This is where a trademark comes in. The U.S. Trademark Electronic Search System will help you see if your name is still available.
Search the web. You’ve checked locally. You’ve checked nationally. It’d still be good to cover your bases and check out what’s online. Doing this will also help you see what other similar competitors are doing.
2. Determine your business structure’s needs
Just how different business entities have varying liability and taxation rules, they also have different naming requirements.
Here are the naming needs for the common business structures we mentioned in Part 1:
Being the simplest of them all, you don’t need to register your business name on the state level - nor federal, for that matter.
Also known as an assumed name, a DBA allows new businesses to operate under a name other than their legal business names.
Similar to a sole proprietorship, general partnerships operate under the personal names of the partners. To do otherwise, the partners also have to file a DBA.
Corporations require a unique name that complies with certain naming requirements, such as:
The name must include any of the following words (or their abbreviation): corporation, company, incorporated, or limited.
The name has to be distinguishable from other existing businesses in the state.
The name can’t include words that could lead to association/ confusion with government agencies (like FBI, State Department, Treasury, etc.).
Like corporations, LLCs also require a unique name that meets certain requirements, such as:
The name must include the phrase “limited liability corporation” or one of its abbreviations (L.L.C. or LLC).
The name can’t include words that could lead to association/ confusion with government agencies (like FBI, State Department, Treasury, etc.).
The name will need additional paperwork done and a licensed professional in the field if containing restricted words (Bank, Attorney, University, etc.).
With your unique business name that meets all requirements, Mark Cuban from Shark Tank 🦈 and you are ready to continue.
3. Register your business name with the state
Registering your business name is part of the filing process to declare your business entity a legal company. Depending on where you live, there will be state-specific hoops you’ll have to jump through in order to legally register your business name. We’re going to cover some of the high-level basics to get you going.
File a name reservation
If you’re still on the fence about filing for your LLC or corporation, we recommend this option for you before going any further. Filing a name reservation helps you lock down your unique name for future use. Ya know, for when you’re ready to make things official. Keep in mind that this step isn’t required in order to open a new company or file for a DBA. It just gives you extra security that your name will be there for you while you get your ducks in a row.
File a DBA
In all honesty, a DBA is mainly good for branding purposes.
As we mentioned earlier, sole proprietorships and general partnerships file for them when they don’t want to operate under their personal names. Corporations and LLCs can also use them, but to diversify their brands. Either way, it’s recommended that only businesses with low profit and risk file for them.
Form an LLC
When your LLC is filed with your state, your business name will be registered.
Name your LLC. We’ve covered how to do this. Soooo, I guess we’re done with this step. Just make sure you follow aforementioned requirements 👍🏽
Choose a registered agent. This is an individual or company that sends and receives legal paperwork on behalf of your company. S/he must be a resident of the state in which you’re filing or a corporation allowed to legally do business in the state.
File formation documents. This could also be called Articles of Organization, Certificate of Organization, or Certificate of Formation. It depends on your state.
Create an Operating Agreement. This isn’t always required to form an LLC, but it’s a good idea to have one as it outlines the ownership structure and membership roles.
Get an EIN. An EIN, or employer identification number, is the equivalent of a social security number for your LLC. You need it for things like opening business bank accounts and hiring employees later on. Get it for free through the IRS.
Form a corporation
Similar to an LLC, when you file your corporation in your state, your business name is automatically registered.
Name your corporation. Again, best practices are up above. Review them so you avoid the headache.
Choose a registered agent. This individual or business entity in your state of operation will receive legal and government documents on your behalf. You must appoint one when registering your corporation.
Elect your corporation's Initial Directors and Share Structure. Basically, initial directors oversee your corporation until the first shareholders’ meeting. Shares of stock are structured into classes, each holding different rights and privileges for those who own them. (We talked about this in Part 1. Don’t get glassy-eyed on me here 😒)
File formation documents. These documents cover the basics of your newly created corporation, such as its name and address; registered agent’s name and address; and number of shares the company can issue.
Get an EIN. Just like with an LLC, your EIN, also known as a federal tax identification number, is used to open business bank accounts; file state and federal taxes; and hire employees.
A lot of this may be new to you, and a bit confusing. But we want to let you know you’re doing a great job riding along with us 😍🤗 (And you can always come back to problem areas later.)
Hang in here with us as we reach the final stretch.
These last steps could be the difference between your booming success or getting sued and going bottoms up 😱 (We wish we were kidding, but we’re not.)
Look into Licenses, Permits, and Insurance
Even though we’re covering online businesses in this guide, online small businesses still need protection. After all, we’re dealing with the real world. It’s better to be safe than sorry.
Let’s start with licenses and permits
Licenses and permits come from state and federal agencies, depending on your business’ location, activities, and government rules. Most of you reading this won’t fall under the business activities that need federal licenses and permits, but the same can’t be said for the state level. States usually regulate a wider range of activities in comparison to the federal government 🗽
General business license. This license allows you to engage in general business activities within your local city or county. Along with this, check local zoning ordinances, fancy talk meaning to see if you can run your business legally in your neighborhood.
Professional license. Those who work in professional services - psychology, engineering, law, medicine, etc. - will need a license to operate their business, even if it’s online.
Health and safety permits. These permits are more so for if you plan on having customers and clients frequent your home to conduct business. If you just sell goods and services online (with no inventory at your house), you most likely won’t need this.
Sign permit. Size, types, locations, and lighting of business signs are all approved by local ordinances. If you want to post a sign, double check with your apartment complex, condo, or wherever you live first.
Sales tax license. This may or may not be a part of the general business license, depending on where you live. This is definitely a license you need because it could cost you tremendously if you operate without it.
In short, industry requirements often vary by state. Be proactive, and visit your state’s website to see which ones you need.
Consider insuring yourself
Your personal and business assets are protected when you get business insurance. Even if you’ve filed an LLC or corporation, insurance fills in any unforeseeable gaps after registering for your company.
Depending on your specific situation, you may even be required to purchase insurance. This is what happens with full-time employees because you have to pay workers’ compensation, unemployment, disability, and all that jazz.
Either way, it’s just good to have, especially if s*** gets real…
🤕 General liability insurance protects against financial loss because of physical injury, property damage, defending lawsuits, medical costs, libel, slander, all that good stuff. It’s a catch-all for any business.
🦽 Product liability insurance protects you from losing money because of a defective product that led to injury or physical harm. It’s for businesses who manufacture, wholesale, distribute, and retail a product.
💸 Professional liability insurance protects you from financial loss due to malpractice, errors, and negligence. It’s for any business that provides services to customers.
🏨 Commercial property insurance is for those with a bunch of property and physical assets. It helps ease costs due to property damage from fire, smoke, wind, vandalism, and more.
🏡 Home-based business insurance can be added to one’s homeowner’s insurance. It offers protection for some business equipment and liability coverage for third-party injuries.
⭐ Business owner’s policy is the best of all worlds. It’s ideal for small business owners, especially home-based ones. It takes the guesswork out of insurance, combining all the typical coverage options into one.
As a general rule, insure what you can’t pay for out of pocket.
🤔 Think: What sorts of things will your business be at risk for? Lawsuits? Natural disasters?
While accounting and bookkeeping services can be outsourced, it may be better for you to check out software programs that keep track of finances, like Bench, Bill, Freshbooks, Quickbooks, or Wave.
We even took the guesswork out of some of it for you. Check out our Product Review - Accounting Software: Freshbooks vs. Wave.
Promote the S*** Outta Your New Business
You’ve researched. You’ve created the plan. You’ve registered and filed for your business. Your licenses, permits, and insurance are up to speed, AND you’ve set up backend systems so you can do your business thang.
Now it gets to the fun part… marketing and promotion! You’ve gotta get your name out there to keep those leads turning into customers, loyal clients, and brand advocates.
We’ll walk you through some key steps in this phase:
Build a website
Let me guess. You’re probably thinking 💭 But why do I need to get a website if I can just use social media for free??? Social media is rented ground. You don’t own anything published there.
If one day the social media gods decide to lock your account because a group of trolls teamed up and said they should, how are you going to make money? We don’t know either.
Now that you’re convinced you need one, let’s continue on to best practices for creating your website:
👀 Check out competitors’ sites. You should have done this in the research phase of this guide allllll the way back in Part 1. If you skipped it, here it is again… coming back to haunt you 👻 But for real, checking out their sites can help you see what is and isn’t working and give you some decent ideas.
🖇 Create a wireframe. This is website speak for creating the template and writing the copy for your site. It helps improve user experience. Our friends over at DreamHost have cooked up a nifty article for you about how to wireframe a website.
🔍 Optimize it for SEO. There’s a reason why there are SEO specialists in this world. The field is extremely extensive. Explaining it all to you would be too much for us rn. So, we’ve enlisted help from the team at Ahrefs to give you the SEO basics for success.
💅🏽 Make it aesthetically pleasing. We shouldn’t need to tell you this, but a couple things here are worth mentioning. Keep your site clean, simple, and straightforward. Place the menu bar prominently at the top, and learn a bit about how colors play a role in marketing.
Just like everything else in getting your business running, you don’t have to go it alone.
You just have to plug in your website copy to their premade templates and woolah! You’ve got yourself a spiffy new site. The only thing left for you to do would be to publish high-quality, original content.
Set up your business’ social media accounts
Having done the buyer persona already in Part 1, you’ll know where your target customers are hanging out online. And from following our process to register your business, you found the perfect social media handles.
📄 Start with a plan. Set measurable objectives for what you want to achieve across all platforms, and create a content calendar for the month. Also, always follow the 80/20 rule. 80% of what you publish is to educate, inform, or entertain. Only 20% should promote your business.
💜 Build relationships. Gone are the days of cold selling. Take your audience “out to dinner” before you sell to them 🤣🤭 Talk to those who engage with you. Establish trust, build a loyal following, and gain new, free exposure.
🖼 Share lots of images. Scroll-stopping posts are generally those with a visual component. Why? Everything enters through the eyes 👀 GIFs, memes, stock photos, videos. Have a hay day, but don’t skip those pics.
🔝 Choose quality over quantity. Choose a couple platforms where you can create quality content versus spreading crappy content over many. 86% of consumers say authenticity is important when deciding what brands they support. So no fake it ‘til you make it here. #sorrynotsorry
📆 Schedule content. We recommend you take that content calendar from earlier and block some time off to schedule your posts all in one go. This will save you time from having to worry about it on a daily basis.
👂🏽 Partake in social listening. Social listening is taking notice of and responding to mentions of your brand online. It’s not only reading up on what others are saying about you, but also taking action on the data you’ve collected. Several tools can help you do this with ease.
These best practices are universal across platforms. So, try not to get caught up on the hooplah of it all. What’s important is that you start posting. Pay attention to how your content performs, and adjust from there. It’s that easy.
Perfect your pitch
In an ideal world, clients and funds would roll in without us having to do anything. But, that’s just not how things work. Cold (or if you’re lucky, warm) outreach is just another part of the marketing and SALES process. Luckily, pitching doesn’t have to feel s***** if you do it right.
Establish authority. People have attention spans of goldfish. If you can drop some (big name) clients you’ve worked with, partnerships you’ve secured, etc., you’ll keep their attention for longer 👁🗨
Show off. Now is not the time where you keep your best for last. You want to show off all the goods. If you have a course you’re selling, link to your page of happy testimonials. If you’re a graphic designer, send them links to examples you’ve done within their industry.
Keep it short. When you pitch, you don’t have to have the idea 100% figured out. You’re just reaching out to get your foot in the door. So, your pitch should be two or three short paragraphs at most. Remember: goldfish 🐟
Give ideas. The more you give, the more you get. Let potential customers and clients know what they’d be paying for if they hired you for your services. Provide tactical - over theoretical - advice wherever possible.
Also, it’s time for you to start thinking about pitch decks for investors. Create a PowerPoint with 15-20 slides, explaining your company’s products, technology, team, etc. Pretty much anything you need to sell your story.
Do send a PDF version of the PowerPoint to investors before the meeting.
Do explain why the market opportunity is large.
Do tell a compelling story that really sells your passion and your business.
Do show the traction you’ve gained so far (# of customers, partnerships, etc.).
Do be consistent throughout the pitch deck (font, color, header styles, etc.).
Do plan to demo your product - if possible - during the presentation.
Do have something to be remembered by (video clip, catchy slogan, etc.).
Do include “Confidential and Proprietary. Copyright by [Name of Company]. [Year]. All Rights Reserved.” on the pitch deck cover page.
On the flip side, here are some pitch deck don'ts:
Don’t let the pitch deck go beyond 20 slides. Put extra info in an appendix.
Don’t go too deep into finances. They can ask about it later.
Don’t put everything in the slides. Add key info during the presentation.
Don’t use obscure industry jargon.
Don’t underestimate competition. It’s healthy to include them.
Don’t overdo the words on your slides, or they’ll be an eyesore.
Don’t have outdated info in the pitch deck. Update your deck regularly.
Just like that, your clients and investors will come rolling in.
Hire a Team
By the time you’ve grown your business to the level where you can’t keep up with incoming work, it’s time to outsource. Yes, we’re talking expansion, baby! A good way to know what you should outsource is to ask your customers what you’re good at, and then outsource the rest.
There are a couple things to keep in mind when hiring employees to make the process run smoother: Headhunt talent online One of the most effective ways to hire is by headhunting, also known as searching for talent.
Do you follow an insanely talented videographer on Twitch? 📹 Or a photographer who’s got all the best shots on IG? 📸
Do your fair share of stalking to see if they’ll make a good fit. Cross reference all of their social platforms, and read testimonials from actual paying clients.
Do reference checks
This point can be skipped if you’ve already head hunted. But for those who want to go the more traditional route, this step is a must. In addition to the standard application the potential hire will fill out, make sure you verify the following:
Validity of educational degrees and schools attended
Prior jobs and responsibilities
Why they left past positions
Why they want to work with you and your business
Reference checks with whom they’ve worked
The point of doing all of this is not only to ensure truthfulness and accuracy, but also to make sure that they’ll be a good fit for your culture and business’ mission.
Finding talented individuals is half the struggle. Now, you need contracts and agreements to make sure things stay legal between all parties involved. Oral agreements are super standard, but we recommend you not. Just do the extra work so there are no misunderstandings.
The basic of the most basic employment agreements include:
Job title and role
Who the employee reports to
If the job is full- or part-time
Start and end dates (say if position can be terminated whenever without penalty)
Stock options (if your business structure is a corporation)
The deets on salary, benefits, bonuses, etc.
Obviously, those who play a more senior role in the business will receive a more detailed employment agreement letter. Likewise, you’ll want to make sure that what happens in the business, stays in the business 🤐 (a.k.a. a confidentiality agreement). Again, here are the high-level basics of what to include in a confidentiality agreement:
🖊 The employee can’t disclose any confidential info without authorization
🔐 The business owns all ideas, products, discoveries, etc. the employee creates during his/her employment
❌ There is no conflict of interest between the employee and any competitors of the company
📦 The employee has to return all company and intellectual property when the contract ends
Well… almost. We could spend days on these topics (there’s a reason why corporate lawyers are still in biz), but we’re not going to.
We don’t want to bore you, and hat’s not what this guide is about. But we do have to skim through the basics of protecting your intellectual property before sending you on your way. Not doing so could be the end of your business as you know it. (We’re not kidding. Having to file a lawsuit over this stuff is costly.)
Anyways, here’s a quick summary of the types of intellectual property protections available:
🔒 Patents. Patents are used to protect new ideas or processes, preventing anyone other than the owner from making, using, or selling the patented item. You’ll need a lawyer to help you draw up the application, which can be expensive and take several years.
™ Trademarks. The United States Patent and Trademark Office said it best (obvs). A trademark is a “word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.” In short, it’s a brand name (with or without a logo).
📄 Service marks. On the same note, service marks resemble trademarks, but they are used to identify the source of a service, not goods. They are often slogans. For example, the service mark of an interior designer could be “Feel at home.”
🎙 Copyrights. Copyrights protect how ideas are expressed and are used for artistic, literary, dramatic, and musical works. This includes movies, songs, novels, poetry, and the like. They give the owner exclusive rights to make copies of the work and distribute it.
🤫 Trade secrets. Trade secrets are competitive advantages for businesses. A trade system can be almost anything that’s confidential and exclusive to the company, from systems, programs, and procedures to formulas, strategies, or other information. (Coca-Cola’s recipe is a trade secret, for example.)
If you’re at the stage in your business where you feel like you need to consider protecting your intellectual property, get a better feel for the types and their related costs before diving head first.
Finally, Just Rock your Business!
Woohooooo! You made it to the end! 🥳
And last but not least, there’s nothing left for you to do but rock your business 🤘🏽
As you can see, you have your work cut out for you in this first year of your new small business. No one ever said it’d be easy (and if they did, they were a lyin’ 🤥), but for those who power through, the returns are endless. We wrote this to be the only resource you need, starting with researching and ending with expanding.
So, dive into each section more in-depth, and really put thought into everything. (The more effort you put in, the more you’ll get out. Just saying). Also, try not to get too caught up in the little things that come up along the way, yet always keep your end goal and your why in mind. This will help you weather the storm better when the going gets tough ⛈
Keep your eye on the prize. Keep grinding. You’ll be rocking it in no time.
Liked this comprehensive guide? There’s PLENTY more where that came from when you get early access to Boost. It’s the only work platform you’ll need to crush your goals for the coming year(s) of your new small business 👊🏽💥