A simple how-to guide for starting your business

From paperwork to partnerships, Carmen Perez walks you through the logistics of how to set up your own business on this episode of Getting Rich

影片文字轉錄稿

CARMEN PEREZ: What's up, everyone? I'm Carmen Perez, and this is "Getting Rich." And today, we're going to be talking all about starting your own business. From paperwork to partnerships, we're going to cover the logistics of how you can get your business off the ground.

[MUSIC PLAYING]

What kind of business you start depends on what you're selling and who you're selling it with. Let's start by going over the three basic types of small business structures. A sole proprietorship is the most common and simplest form of a business structure. It's perfect for one person because that means only one person is liable for the business. In short, if you succeed, you reap the benefits. But if things take a wrong turn, you're the only one that's liable.

A general partnership is pretty similar to a sole proprietorship. Only, the business is now between two or more people. The main difference is that the liability will now be shared by everyone. This is important to keep in mind when you're considering a business partner. You want someone that you can trust. Because if they disappear, your personal assets will be on the line in the worst-case scenario.

A limited liability company, or an LLC, is a business structure that protects the owners from personal responsibility for debts or liabilities, which is how corporations roll. But since you're probably not trying to start a corporation right away, an LLC is a nice way to keep the informal business structures of a sole proprietorship or general partnership with some added protection.

Now that you figured out what kind of business you want to run, it's time to hit the forms. Here's a checklist of what you'll need to get started. If you want your business to legally be protected, register a business name. If you don't want to go through all that, you can just start by buying a domain and getting your social accounts going.

If you're anything other than a sole proprietorship, you'll need to apply for an Employer Identification Number, better known as an EIN. This is like the Social Security Number for your business. So you can't file your taxes without it.

Look into licenses, permits, and any employer requirements if you plan on having people on your payroll. These can vary state by state, so it'll require a little research. It might feel like a lot, I know. But trust me. You don't want to get caught without these documents.

Get a bank account for your business. Even if you're a sole proprietorship, having a separate bank account and credit card for your business is key to separating work from life. Some business checking accounts are free, and some you have to pay for. But just because it's free doesn't mean it's the best account for your business. Sometimes, paying up front is worth it. Now let's meet our guest Jennifer. Jennifer, thank you so much for coming on the show.

JENNIFER NUNEZ: Thank you so much for having me, Carmen.

CARMEN PEREZ: Yeah, absolutely. So tell me a little bit more about yourself and about your business.

JENNIFER NUNEZ: Well my name is Jennifer Nunez. I am the founder and CEO of Light Maintenance Candle Co. It is an organic, soy-based candle company based in New York City that I created during the pandemic in 2020. And it's been going pretty well. It's been a little over a year now.

CARMEN PEREZ: That's incredible. What brings you on the show today?

JENNIFER NUNEZ: Being that this world of entrepreneurship is new to me, it has been challenging, this learning and teaching myself along the way. And when I heard about "Getting Rich," I said, you know what? This is the perfect opportunity to just learn more, soak it all in, and bring more awareness to what it is that I'm trying to do as well.

CARMEN PEREZ: It sounds like you are looking to try to grow your audience and get your message out in a more efficient and effective way to be able to grow your business. Is that right?

JENNIFER NUNEZ: Yes, absolutely.

CARMEN PEREZ: If you're starting to build your social media brand, that's something that you can definitely lean into. Educating people is a great way to start building community and building brand awareness because you're going to start having a level of authority in this space that no one else is really putting out there, right?

JENNIFER NUNEZ: That's very great advice because I find myself where I'll start in that way, like I would like for that to be the approach, and then I get lost not knowing what's my niche even though I feel like I know what it is, but once again, exuding that out to my consumers.

CARMEN PEREZ: All right, Jennifer, so quick question for you. How do you separate your personal expenses and your business expenses?

JENNIFER NUNEZ: So technically, I don't have them, at the moment, separated.

CARMEN PEREZ: I think it would be important-- and it is important-- for you to be able to separate those business and personal expenses. So at tax time, you are all set.

JENNIFER NUNEZ: Thank you. I will do that. It's about time that I separate the two.

CARMEN PEREZ: Well, Jennifer, thank you so much for coming on the show. I greatly appreciate you being here. And I wish you the best of luck with all your business endeavors.

JENNIFER NUNEZ: Thank you.

[MUSIC PLAYING]

CARMEN PEREZ: Starting a business may seem like a lot of work. But the trade-off to paving your own way in the world is pretty cool. If you're feeling stuck, here's some good advice to jumpstart your business. Don't get hung up on the name. If you have everything but the name, start filing under your starter name. When you settle on a name you'd like to use publicly, you can file for a Doing Business As or a DBA in minutes.

Use free resources. Facebook, Instagram, YouTube all offer free and pretty powerful marketing resources. Learning these will save you a ton of cash and help you grow your audience. Define your work and play. Now, before you file your first form, it's a good idea to map out what counts as a business expense and what counts as a personal one. Your small business can creep into your life as your network grows. So it's always good to make sure you understand the difference between a personal expense and a business expense. I'm Carmen Perez, and this is "Getting Rich."

[MUSIC PLAYING]