Starting a new sole proprietor business has never been easier. First of all, small business owners can make their own hours, and decide on what type of product or service they’d like to offer. Taking the next step to becoming a self-sufficient new business start-up can be accomplished with a few easy steps.
All one needs to get started is to file a fictitious business name statement, obtain an employer identification number, and open a new business bank account. The steps to starting a new business are listed below.
Decide on a Fictitious Business Name
Sole proprietors in general like to incorporate part of their specialty into their business’ name, such as Joe’s Radiator Service, or Mary Smith’s Floral Shop, or perhaps Jane’s Unique Wine and Cheese Gift Baskets. There are several steps one should take in selecting a business name.
- Conduct a business name search-Visit your local county clerk’s office and search through your county’s database of business names and select a name not already in use.
- Prepare a Fictitious Business Name Statement-Sole proprietors should list their names doing business as a type of business, for example: Jane Smith DBA: Jane’s Unique Wine and Cheese Gift Baskets. Most county clerk offices provide computers to type fictitious business statements right in their office.
- Include a spouse in the business name-If the business owner wants to include their spouse, the registry should list husband and wife doing business as a type of business, for example: Jane Smith and Joe Smith DBA: Jane’s Unique Wine and Cheese Gift Baskets.
- File and publish the fictitious business name statement- In most counties, it is required that new businesses pay a newspaper to publish their fictitious business name in the legal section of their local newspaper.
Obtaining a Federal Tax Identification Number
Most sole proprietor business owners use their own social security numbers for business tax purposes. This is especially true for at home, start-up businesses with little or no start up costs, and few employees.
For sole proprietors wanting to have employees, or for those that may expand rapidly, it is a good idea to obtain an tax identification number or employee identification number (EIN) from the IRS. Many online organizations offer easy applications in obtaining a Tax Id number, but it is recommended to first consult the Internal Revenue Service.
Starting a New Business Bank Account
Sole proprietor business accounts are easy to set up, but first the business owner needs to make sure that they have all of the documentation for his business before going into the bank. All business owners must appear personally at the bank to sign the signature cards and provide identification. The documents needed to open a sole proprietorship bank account are:
- Driver’s License for all account holders.
- Social Security Number for all account holders.
- Tax Identification Number for the business.
- Copy of Filed Fictitious Business Name Statement stamped by the County Clerk’s Office.
- Proof of Fictitious Business Name Publication in your area’s local newspaper.
- Opening deposit.
The bank will open up a sole proprietorship account and will determine your needs for online banking, ATM cards, retirement savings, lines of credit, and business checks. If your business has a particular logo, the bank can usually print your logo on your checks for an additional fee.
Remember that starting a new business may seem like an overwhelming endeavor to take on, but it’s really simple. Once the business fictitious name filing and employer identification number filing are out of the way, all one needs to do is to publish the business’ name in the newspaper and open a new business bank account.
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Donna Kehl - Educator, researcher, culinary artist and wine enthusiast writing about food, wine, travel, family, and educational issues.
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