So you have a great product or business idea, but you don’t know where to start. Once you’ve decided to go all-in and have some of the hard questions about starting your business out of the way, it’s time to make it official. Read on to learn how you can establish your business so you can bring your product to market.
1. Pick the best legal structure for your business
For most suppliers, this means choosing between being a sole proprietorship, an LLC (Limited Liability Company), or a corporation. Very briefly, here is the run-down on each entity:
Sole Proprietorship: You’re the Lone Ranger. You’re one person running your business and are personally responsible for all the debt, taxes, and liability associated with the business. If you are the only employee this could be the best option for you. If there are multiple founders, a formal partnership is another similar option.
LLC: This is a very common business set-up which allows you to separate yourself from most personal debt and liability. By creating this independent legal entity you also have great tax flexibility because you can choose how you’re taxed (as a sole proprietor, partnership, or corporation). This is also an ideal choice if there aren’t external investors or too many owners in the business.
Corporation: Similar to an LLC, this independent legal entity affords you personal protection from liability. Because a corporation ownership structure is made up of shares and therefore shareholders, this entity is recommended for larger businesses.
2. Register your business
Both LLCs and Corporations require you to file formation documents with your state. This means completing all business licenses and business permits. You’ll also need to set-up your tax information, including getting an EIN (employee identification number).
If you’re a sole proprietor, you don’t need to register yourself as a business, all activities are directly yours.
If you don’t know where to go to establish your business, check out our partners over at LegalZoom. They can help you form any of the above and more.
2.5 Name your business
It may sound obvious, but you’ll need to give your business a name. You’ll often hear this as your DBA or “doing business as…” Here’s a great article if you’re looking to learn more about naming your product and how it can impact your business.
3. Get the right permits
Regardless of your product type, there are a number of permits you’ll need to acquire.
For example, registering with the FDA is a crucial step if you have a food, beverage or body care product. Go here to register your food facility with the FDA to be compliant with the Bioterrorism Act of 2002 for starters. If you plan on selling alcoholic beverages, you will need certain federal permits (for tax purposes) with the U.S. Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB).
Whatever your product may be, be sure to find out about your state or country’s requirements to manufacture, distribute, export, and ultimately sell your products.
Once you have all the above in order -- paired of course with a compelling brand and marketing strategy -- you’re well on your way to selling your products and getting onto retail shelves.
About the Author
|A veteran at building customer success and support teams, Kevin is currently the VP of Customer Success at RangeMe. Kevin's two passions are playing in his band and seeing our amazing suppliers and buyers succeed on RangeMe!|