I always knew I wanted to be an entrepreneur. At seven years old, I learned how to calculate money. I was writing business plans at 9. I did not know then that becoming the next Uber, Chobani, or Spanx would mean starting as the only employee. That realization didn't bother me, but it did require a sense of ownership and acceptance that many new entrepreneurs don't think they deserve.
When you read business articles, they will give you the spiel that you have to set yourself as a Limited Liability Company (LLC), Subchapter Corp (S Corp), or a C corporation (C Corp) but that doesn't necessarily have to be your immediate path. For example, I started with a business license from my local government. Having the business license was great because it ensured I had the business name I wanted and established an official record of my use of that name. It also informed my state that I was doing business under a professional title. Each state and its municipalities have different requirements for setting up a business license or "Doing Business As," or DBA certificate. There are fees to file, but they are usually nominal and worth the investment.
I then called the IRS for a Federal Employer Identification Number (FEIN). Those two steps established me as a credible business in my state and the official identity it deserved. You can get a FEIN by calling the IRS hotline or applying online. It is 100% free to apply for it. A FEIN number is useful because it means you can do business without providing a social security number to vendors or clients.
In the long run, it paid off to set up my business this way because when I applied for loans, business credit cards, certifications, and more, I had documentation and evidence of a legitimate business. Even when I tried moving into an S-Corp, I was able to keep my business name and the FEIN. Eventually, I became a Limited Liability Company (LLC) and kept my business name and FEIN.
Even though my business evolved, it started small. However, size should not mean a lack of. You can still have the credentials to establish your business. So be as official as you can be and set yourself up for success.
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