Let’s start with the legal side of things. Before you buy or invest in anything, you need to research your state’s rules and laws for starting a business. I’m going to give you information that was applicable for me, as I started my business in Arizona. This will be a good starting point for you, no matter what state in the USA you want to own a business, however you’ll need to look at your own state government’s website to verify accurate information for your state.

Here’s some fun legal verbiage I borrowed straight from the Arizona government’s website_

IMPORTANT – The following is only a suggestion of the sequence and type of steps that might be needed to start a business in Arizona. Your particular business, tax, or legal needs may require that you take different action or do things in a different order. The below information is only an overview, and is not intended to provide legal or tax advice or to be a complete resource. We recommend you consult with knowledgeable professionals such as an accountant and an attorney to determine the particular needs of your business.

 

Alright let’s get started.

 

1. Pick a name

This is number one and very, very important. Your name needs to mean something to you. I’ve started many businesses and none have been as successful as the ones with a name that feels like a piece of me.

It also needs to be unique and at the same time, relevant to your industry. Once you have a name, Google it. Are their other businesses in your industry with that name? Then you need to pick another one. Even if it’s very similar, you may still find yourself in a legal battle down the road. There can be major legal consequences for using the same business name as someone else. Not to mention, the state will reject your request to secure the name legally. After simply Googling it, if you don’t find anything similar, check with your state to verify there are not other businesses registered with that name.

In Arizona, you check using the Arizona Corporation Commission website. You can use this link to check if there are other businesses registered with that name_ http://ecorp.azcc.gov/

The United States of America is great in that we may all be a part of the Union, but states were meant to be separate. The federal government was originally intended to have very limited control over the people. States are local governments, we’re however meant to have a lot of control. So in many cases, you could actually have the same business name as another small business in another state, as long as they don’t have their business trademarked with the federal government. This makes sense for brick and mortar shops that are just local to one area. However, with the creation of e-commerce, this can become troublesome, as most businesses sell online to the entire US or even worldwide, even if they have a brick and mortar shop. So all that to say, I personally believe you’ll save yourself a lot of headaches and possibly legal consequences, if you pick a name that is unique. If you end up with a successful business, I suggest down the road to trademark your business name to prevent other people from using your unique name as well.

Before you actually register your name legally anywhere, follow step 2. Step 1 was all about CHECKING for name availability. You don’t want to end up securing a name legally, only to find out someone else owns the website with that name.

Keep it short. Long business names are harder to remember. Think of Starbucks, BuyBuy Baby, Lego and Disney. Short and simple. Not to mention, it gets really hard to fit long names onto a logo, branding, packaging and more.

You don’t always need to have WHAT you do or WHAT you offer in your name. My business, for example, is called Charlie Lou Baby. Why did I include baby? Because my business is the personal nickname of my son. If you saw Charlie Lou, you wouldn’t have any idea what we were about. But I never would have included what exactly we sold in the name. You won’t find me saying “Charlie Lou Baby Apparel & Linens” anywhere on our branding. However, on the flip side, I used to own a business that helped people with their resumes, interviews and find job fairs. It was called Interview Essentials. That’s it. No further verbiage on my branding or name. It was clear what the business was about based on those two words and I never felt the need to add Interview Essentials Resumes and Interview Training to my title, logo or anything else. Don’t forget that people will find out what you do and what you sell with one click to your website or social media. There is no need to overcomplicate your business name.

 

2. Purchase the domain name

Once you are completely decided on your business name, visit a site like Google Domains or GoDaddy, to purchase your domain name. You may have checked that the name is available legally, but now you need to see if the website name is available.

This is a personal opinion, but I would never choose a domain name that didn’t have the .com at the end. If you’re a nonprofit or state educational site, obviously you’ll have something like .org or .edu but for e-commerce, stick with .com. There is a certain stigma of unprofessionalism with sites that have odd domain names that end in something like .net or .me.

Keep it simple. Trying to avoid using the word shop, buy or anything but your exact legal name. My website is charlieloubaby.com. And I get A LOT of direct traffic to my site. “Direct” traffic usually means they typed it directly into the URL bar. Meaning, they probably saw one of my photos on Pinterest, came across one of my social media pages, looked at the tags of their baby’s clothes for a reminder of the business and wanted to order more or a friend mentioned it to them. Then they typed charlieloubaby.com into their URL. When you complicate your website name, it’s harder for people to find you, even when they are searching for you directly. People find me directly all the time because my website is always their first guess as to what our site should be. If you wanted to visit Starbucks website, what would you do? You would go to your URL, type in Starbucks.com and BAM, you’re there. If you went to your URL and typed that in and it wasn’t the correct website for Starbucks or it said Error_ No Website Found… wouldn’t you be confused? Would you maybe just give up and forget about it? You NEVER want to lose a sale that way.

 

3. Choose an entity type

Charlie Lou Baby is an LLC and I’ll just leave it at that and paste another blurb from the Arizona Corporation Commission.

Choose an entity type for the business (corporation, nonprofit corporation, or limited liability company (“LLC”)).

NOTE – “S” corp, “C” corp, and “501c3” corp are only federal tax designations – in Arizona you would just form a corporation or a nonprofit corporation. The Arizona Corporation Commission Corporations Division cannot tell you what type of entity you should form. An accountant can advise you concerning tax issues, or an attorney could advise you concerning liability, tax, and other issues, or there are many resources on the internet. A valuable resource is the Arizona Commerce Authority Small Business Services, http://www.azcommerce.com/.

 

4. Form your entity with your state

In Arizona, you’ll visit http://ecorp.azcc.gov/ and register the name as a trade name by submitting your formation documents. If you’re in another state, I’d just start by Googling “Register my business name in (your state)” and follow the state government’s guidelines. In AZ, your business name will be registered for 5 years. In Arizona, if you are forming an LLC, you will submit Articles of Organization. If you are forming a corporation, you will submit Articles of Incorporation. Before moving through the rest of the steps, waiting for your state to approve your paperwork.

 

5. File with your state’s department of revenue

Depending on your state, you might need to complete a transaction privilege tax application with your state’s Department of Revenue. In Arizona, here is the link_ www.azdor.gov

Essentially, you have to pay your state the taxes you collect from your sales. Aka sales tax. This can be complicated and I’m not going to get into it here, so ask your accountant about it. But this website can help you do things easier for sure_ taxjar.com (a lot of website creators have extensions to sync this application for you)

 

6. Register your business in the city or county that you reside

Even though your business may be online only, you still need to register with the city (or county if you are in an unincorporated area) so they can keep track of revenue. This is for transaction privilege tax purposes and also for any business or occupational licenses that the city requires.

 

7. Register for a federal EIN or TIN

Check the Internal Revenue Service (IRS) website www.irs.gov to obtain an EIN (employer identification number) or TIN (tax identification number).

 

8. Open a business bank account

It’s important to keep your personal expenses separate from your business expenses. You may find yourself in legal trouble if you don’t keep things separate.

 

9. Purchase business liability insurance

Protect yourself and your family by purchasing business insurance. It is worth it. I believe I pay about $40/month through State Farm to protect myself from lawsuits and if anything were to happen to my inventory or business tools.

 

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