Actual Steps to Start a Business

Starting a business can be overwhelming at times if you don’t know where to start. And even more so if you’re getting bad advice from others. In this video, learn what Matt thinks is actually where you need to start.

There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this new series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!

Video Transcript: 

Business Advice Video:

Tell them the exact checklist. When you start a business and you start spending money, you need an LLC. Then you need an EIN – an employer identification number. Literally Google EIN IRS application. The first links that pop up are going to be scam ads. Do not click them because they’re gonna charge you and an EIN is free. It literally takes five minutes to set up. The bank is going to require your LLC paperwork and an EIN to get a bank account. That’s step three, a bank account. So we have LLC, EIN, bank account. You’re gonna get an accounting software like QuickBooks or at least a spreadsheet. LLC, EIN, bank account, Quickbooks. Those four steps for any business. I don’t care if this is your 10th business. You will need to do those four things.

Matt’s Reaction:

Okay so, yes sort of. I would suggest again if you’re getting started with something and you’re not sure it’s gonna work or how dedicated you are to it or how it’s gonna play out then you might wanna not start with an LLC. Once you create an LLC register with the IRS for an EIN guess what happens, they expect you to file a tax return for that. And even if you didn’t do anything they still expect you to file a tax return for that and that costs money and takes time and if you didn’t do anything you’re still out the time and money it costs to file that tax return. Even if it’s only one and you’re closing the business down. So you might wanna get started without an LLC, just testing the waters making sure what you’re doing is actually gonna work you’re gonna pursue it you wanna invest the money in it then at that point yes you can set up an entity.

But the second thing to think about is an LLC really the best option. A lot of times an S Corp is really the better tax advantage structure to set up or an LLC with an s election. It just depends. It depends what state you live in or if you’re not in the US but you’re doing business in the US or who’s involved in the business if you have partners etcetera etcetera. So just saying everybody should get an LLC as a blanket statement is not great advice. It’s probably good for 80% of situations but you may fall on that 20% where it’s actually not a good idea for you.

And then the last part of that, get QuickBooks. Yes, you can get QuickBooks but don’t fall under the impression that just by having QuickBooks that your accounting is either correct or usable. Really accounting is a whole profession people go to school for years to learn how to do it right. Intuit has sort of falsely implanted the idea with people that if you got the software then you’re probably doing fine. If you’re coding transactions, if you know you want to Staples, you put that in office supplies somehow that makes the books all right. But there’s actually a lot more to it than just doing those simple coding of bank transactions that QuickBooks makes it easy to do. The hard part they don’t handle at all and that’s where people get messed up. So start a business, yes. Think about whether or not you should be an LLC or something else when you’re ready to really take it seriously. And get some advice to figure out if LLC is really the right structure for you then get an EIN, get a bank account, and then when you get your bookkeeping started you really probably wanna check in and make sure that that bookkeeping is being done right. Cause I guarantee you if the books are wrong and the tax return’s gonna be wrong and that is not a good place to be.