10 steps to setting up a business in the United States
America has always carried the label of ‘the land of opportunities’. In fact, much of its success in becoming a world superpower in its short lifespan can be attested to the notion of being the place where if you have a dream and work hard, then anything is possible. This dream is actually what motivates thousands to travel every year to the United States and make their life there.
Many of these people have dreams of being an entrepreneur or developing their ideas or service into a viable business. It’s worth noting that the US is ranked 7th out of 189 countries on its ease of doing business according to data from World Bank Group. Also, according to the U.S. census bureau “Among companies that both exported and imported in 2013, small- and medium-sized companies accounted for 94.4 percent of such companies.” If that many people are doing it, then it must be pretty easy, right? So what exactly is required to start a business in the US?
Well firstly it’s important to note that this can be a tricky area to navigate. Especially for a non-resident however, there are some basic guidelines that can be followed to make sure you are on the right path. The following is a list of steps that can assist in the setting up process.
Step 1: Develop a business plan
- This will assist in preparing and executing ideas and strategies.
Step 2: Get advice from business owners and industry experts
- Research and speak to other owners in the field you are planning to occupy. The SBA provides excellent references for these
Step 3: Decide on a location
- As the saying goes it’s all about location, location, location. Do some research on your target market and on which location will suit your needs both financially and practically.
Step 4: Understanding and collecting finance
- Find business loans and grants that will reduce the amount of personal capital required.
Step 5: Choose the legal structure of the business
Knowing which form of business will best suit your needs:
- Sole Proprietorship
- S Corporation
- Limited Liability Company (LLC)
Step 6: Register the business name, also known as “Doing Business As” (DBA) name
Registering a business name will depend on which state in the US you plan to register your business. The Entrepreneur has a great article that highlights how to register a business name. Note that if a sole trader is doing business using their own name then they are not required to register that name.
Step 7: Apply for state and local taxes
- State taxes will vary according to the state your business will be registered. Business owners can get additional information about state taxes from the IRS website.
Step 8: Apply for necessary ID numbers such as Employer Identification Number (EIN) and Taxpayer Identification Number (TIN)
- You may apply online for an EIN on the IRS website.
Step 9: Get business licences and permits
- Every business in the US needs licences or permits depending on the state and on what you will be manufacturing or selling.
Step 10: Recognise employer responsibilities
- You should know and implement the responsibilities that an employer must adhere to in the US. Further in-depth information about employer responsibilities can be found from the United States Department of Labor website.
It is crucial to understand that these 10 steps are just an initial guideline for starting a business in the US. If you have limited to no experience entering a foreign market then it’s highly advisable to retain the services of a firm who can assist with the transition.
This content originally published on QX Corporate Advisors News-Blog Section