How to Legally Start a Business - 8 Steps

hey Jim Hart back at you here from our

own lawn today I want to talk to you

about the eight things that you need to

do when you're just first starting out

with your business now this might be a

home-based business that might be

something else but these are the eight

things that you need to do so pay

attention let's get to the quick

disclaimer so my name is Jim Hart I'm

the founding attorney here at Hawthorn

law and I've been putting out videos for

the past several years on all things

related to starting and building an

online business and we've done

everything from LLC's to trademarks to

other ways to protect your intellectual

property to stupid videos about myself

you can check them out anyway

today what I want to talk to you about

are the eight things that you need to do

if you're versed just starting out in

business so you you know maybe you came

to this channel cuz you're worried about

an LLC but but today I want to talk

about is this the time to start an LLC

we're gonna get right into that here

right now all right so there's so many

people that are out there starting

home-based businesses these days and a

lot of them frankly you're probably

doing it wrong and so today I want to

kind of debunk some of the things that

you need to think about if you're first

starting out with your home-based

business this might be everything from

an e-commerce business to you know a

blog to a YouTube channel you're

starting and hoping to make money from

to a consulting business - you know

maybe you were working for a company and

then you decided to stop working and you

went home and and you're trying to

figure something else something else

that you want to do to make money

whatever it is today I want to talk to

you about taking that idea that you have

for that business and and what you need

to do legally to protect that idea and

how to build it into something truly

special that can help earn an income for

you and your family and and so that

hopefully you don't have to go back to

that night into five job because if

you're watching this video chances are

you probably don't want to be at that

nine-to-five job if you're already there

am I right about that all right so hold

on a second coffee break I got a Keurig

machine from my business I don't have a

home-based business I've got a law firm

I love this thing I got it on sale Black

Friday boom alright so first thing you

need to do when you're starting out your

business is you have to

and this is gonna sound stupid but you

have to pick a name for your business

this is the the most important thing

when you're just getting started if

you're trying to build a brand you might

want to come up with something unique or

different I've used this example before

but the woman that started Spanx she

came up with that name she did all the

things that she needed to do to protect

that business name before she actually

launches the public so first thing you

got to do before you start protecting

the name is you got to come up with a

thing so that's number one and when

you're starting to think about coming up

for a name one of the things you may

want to think about doing is is doing a

search of all the online platforms to

make sure that nobody else is using that

name and so you're gonna want to search

Google you're going to search the US

Patent and Trademark Office website you

want to do a search on Facebook you want

to search on all the social media

platforms are out there and you want to

make sure that the name that you're

choosing for your business is actually

available so that you can use that name

and then you can start claiming all

those properties as well all those

online properties the other great place

you want to check is every state has a

Secretary of State I know you shouldn't

be confusing this with the Secretary of

State the United States on a federal

level every state has a Secretary of

State and the then Secretary of State is

typically responsible for managing the

corporate records for that state and so

you want to check their their website

they usually have an online database

regardless of what state you're in and

make sure that the name you're choosing

is not already taken in that state in

the state where you live or in the state

where you're going to be doing your

business if you're overseas or something

assuming that your name is available you

want to go ahead and register as a DBA

that's a doing business as in your state

and the reason we want to do that is so

that when it comes time to actually form

an LLC or a corporation or something

else that you want to do that name will

be reserved and nobody else would have

come in and taking it other thing you

may want to think about doing is filing

what's called an intent to use

application with the you

a trademark office now you can't

actually get a trademark until you're

actually using the name or the logo or

whatever it is in commerce in other

words that you're selling products with

that name you can't register a trademark

and how you're doing that

so if at this point since you're only in

the exploratory stage and you're just

coming up with a name you may want to

think about if you came up with

something that's really great you want

to go ahead and register that with the

US Patent and Trademark Office and

you're gonna file what's called an

intent to use application that it's

going to tell them that you intend to

use this name in commerce in the future

and you're basically reserving that name

number two you want to go ahead and open

up your business bank account this is

really important because this is how

you're going to keep track of all your

business expenses and any income you may

earn at this point you don't need to go

ahead and apply for an employer

identification number with the IRS just

yet you can open up this business bank

account in your name with the DBA that

you're using and just use your own

personal Social Security card or just

tell the bank you're opening up as a

sole proprietorship so you can go ahead

and do that now before you've actually

formed an LLC or corporate int and then

what you want to do is you want to

deposit some of your own personal money

into that bank account and you can use

that bank account then you can get a

debit card and you can use that to pay

for all the supplies web properties get

your blog started whatever you need to

do you can you can invest in the

business personally and then you can use

that money to basically pay for all your

startup costs whatever those might be

you can also use that account to start

receiving things like affiliate sales

from you know ShareASale or Amazon

affiliate or wherever you might be

getting affiliate sales from you can

deposit that money into that account so

that's a great way to do that number

three is you want to go ahead and

incorporate your business so now this

you're gonna do after you've actually

validated your idea actually

after you're actually starting to earn

some revenue from the business then at

that point you want to go ahead and

incorporate the business and now I do

have an often awesome video that I will

post on the differences between the

various legal entities you might want to

think about so check that out after

you're done with this video and and that

will help you figure out which corporate

entity you want to use whether it's

going to be an LLC or corporation or

something else maybe a partnership

alright number four the next thing you

want to do is you want to check and make

sure you don't have to get any type of

special license in your state or the

locality where you're living and

operating your business some states and

our cities or counties or whatever may

require you to get what's called a

privileged license or business license

or something like that or you may have

to register in some other way with your

local taxing authority so let them know

that you're operating a business this is

especially true if you're operating the

business out of your home and you may in

just need to do that now chances are

that's not gonna be necessary but for a

lot of people it could be necessary like

let's say you're doing a coaching

business or you started a gym or you did

something like that there could be

certain health regulations that you

would have to follow you know for me as

a lawyer I have to apply for a

privileged license each year and those

are just that's just part of the cost of

doing business so that's something that

you need to do so you want to make sure

that you comply with all the local rules

and statutes and whatever where you live

and make sure you're getting

permits and licenses so that you can

actually lawfully run your business

otherwise you can get yourself in big

trouble all right I think I'm on number

four or five I don't remember I'm kind

of losing track here I missed number

dime like my little worksheet and so the

next thing you want to do is make sure

that you get your contracts in place so

this is especially important if you're

going to be bringing on clients you want

to have a client contract and you're

going to be hiring independent

contractors you won't have a contract

for them if you're going to be doing a

web-based service you want to make sure

you have terms and conditions and a

privacy policy on your website if you're

going to be having some sort of

membership program you want to make sure

you have a contract for that these are

all really important things that you're

going to need to incorporate into your

business and so you want to make sure

you have these in place hint my DIY

legal program will give you access to my

membership site that has examples of all

these types of contracts in it and so

you may want to check that out all right

the next step is to purchase adequate

insurance now this is something that's

really important is something that's

often overlooked but it's really not

that expensive when I started my law

practice here I had to get insurance for

that and well several types of insurance

I have professional liability insurance

that's the really expensive one chances

are you won't need but you can also get

what's called an umbrella policy or a

general liability policy and I have that

in place also for the building the right

thing here in case something would

happen in a door in case somebody would

come in here and get hurt in this

building I have a 1 million dollar

policy it's not that expensive is

somewhere between three and four hundred

dollars a year really not a big deal but

if you're operating a business where

you're gonna have people over to say

your house or someplace else or you're

going to be doing work for them you want

to make sure you have some sort of

liability policy in place in case you

make a mistake when you hear about

people that are bonded and insured

that's what they mean they've got a bond

they post a bond in case something bad

happens and they're also insured to

cover that also check and make sure if

you have more than three in North

Carolina if you have more than three

full time employees you need to get

workers comp insurance other states the

requirements may vary so you want to

check that - if you have full-time

employees if you just have independent

contractors not a big deal but be

careful because IRS does look at

independent contractors very carefully

and if you have somebody as an

independent contractor who's actually an

employee the IRS is not going to look -

- happily on that so be very careful

about that as well alright and the last

step is start to build your professional

team this is where you're going to start

to hire a minister ativ assistant to

help you out with the day-to-day

operations of your business you may want

hire a virtual assistant to help you

with your website or your marketing or

social media or something like that you

want to might wanna think through are

hiring a local marketing assistant that

can help you put on events and network

with other people and do seminars and

things like that to get the word about

about what you do I know a lot of us

start out and we really want to build

this online business but chances are you

have more than enough business where you

are locally when you start out tapping

into those local networks and doing a

lot of prospecting locally is probably

the best way to go about at least bring

dollars in the door

initially that's something I want to

think about but then start to build your

team as you get busier and busier you

bring out more clients you're gonna want

team members to help you service those

clients so that you can do more

marketing and bring on even more

business alright so I hope you liked

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for today so hopefully you have a great

day folks also don't forget leave a

comment below if you've got a question

or something that you need more clear

clarity on please feel free to leave a

comment and we'd be happy to answer that

I do try to respond to everybody's

comments as quickly as I can so have a

great week have a great day and we will

talk to you next time peace out folks

take care oh one other thing don't

forget to download my cheat sheet go

down in the description check that out

also if you want to check out the DIY

the leave all I think there's link down

there for that too and see you next time