One of the most asked and basic questions I have gotten over the years as a business consultant goes something like this: ‘How do I get my business set up and get all the licenses I need?’ That question is often followed up with a concern about taxes or payroll and the perceived difficulty in doing all of this. Since the regulations to set up and maintain a business are set by local, state and federal legislation, there is a perceived challenge is assuring compliance. After all, few people connect the word government and easy together.
When I am talking to someone with an idea they want to pursue as a start-up business venture, I have been trained to careful listen to their words. If they are most concerned about how to register the business, file taxes, and being legit, I know they are new to the startup game. And that is a fine. But the reality is that it is vastly easier to set up a business and abide by the requirements, taxes, and so on, than offering a product or service that enough people will buy at price point that makes you a profit.
But, hey, you still have to legally set up a business and make the appropriate choices to protect your interests and your future customers. And laying that solid foundation in the beginning frees you to direct your energy to make great strides in your venture.
Luckily, Ohio is making some good progress to make it easier to set up a new venture. That includes the ability to file an LLC electronically, and many electronic filing options through websites of the Ohio Business Gateway, Ohio Department of Taxation, and the Ohio Secretary of State. I much prefer to do as much electronically as possible because its saves time. And time, specifically how you use it, is the main asset key to the success of your venture.
For the vast majority of startup ventures in Ohio, the main items to complete the set up are:
Legal Entity: Basically you will choose between a sole proprietorship, LLC (Limited Liability Company), or a Corporation (C or S). First, you have to determine the name of the entity (ie: what name you assign to your new venture). The filing fees for these are $50 up to $125.
Tax ID: This is your federal tax identification number, otherwise known as your EIN. There is no cost to obtain this and the IRS website makes it fast and easy.
Vendors License: If you will be selling tangible items directly, you will likely need a vendor’s license. Some services are also taxable. A vendor’s license is $25.
Other foundation items for startup include choosing your financial and recordkeeping system/method, obtaining a business banking account, and methods to receive sales income (credit, check, online payments). Liability insurance may be a requirement in some instances, and a good choice in others. You may also need industry specific licenses for services such as heating/cooling repairs, electrical, plumbing, medical practices, and selling financial products.
So the good news is there are plenty of resources to make it easy to start your venture to assure compliance, and arguably more important, lesson your initial worries. That way, you are freed up to focus your valuable energy and efforts towards developing your products or services. So rather than worrying about the setup and maintenance of the venture, ask for help. There are plenty of stakeholders across Ohio that want you to be successful, and will help you navigate the regulations. The Ohio SBDC has a detailed, comprehensive guide on Starting a Business in Ohio, here.