10 – Steps to Creating Your New Business or Non-Profit

I am often asked, “How hard is it to start a new business … non-profit”? I tell them, “It’s not hard; but there are a number of basic tasks to accomplish”. At some point, a bank, a client, your accountant is going to ask for one or more of the following items. It only makes sense that if you are going to prepare one of these items, then you might as well prepare all of them, at the same time, right from the beginning.
1. Create a Vision Statement – no more than 4-6 sentences that describe the future results of the business or non-profit; consider these thoughts: define where you are going, the future state of what you want to achieve over time; define what it will look like when you get there; create a way to evaluate achievement.
2. Create a Mission Statement – no more than 4-6 sentences that define the present state or purpose of the organization; addresses what it does; who it does it for, and; how it does what it does. It describes the action needed to get to your vision.
3. Obtain an EIN from the IRS, you can do this on-line; See Link: https://sa2.www4.irs.gov/modiein/individual/index.jsp.
4. Once you have your EIN, fill out a W-9 form with your company name and EIN number and file it away. Your clients will request this form when you submit you first invoice. See Link: http://www.irs.gov/pub/irs-pdf/fw9.pdf.
5. Form an incorporating board; this does not need to be your final working board of directors. Most incorporating boards aren’t. You and two friends, family members or business associates will do.
6. Create Articles of Incorporation, have the incorporating Board adopt them, and file with your State and Local governments as required. The articles must state your purpose. Most governments have on-line forms you can complete and ways to upload your document if you prepared ahead of time. A Google search will yield lots of samples.
7. Use your EIN and Articles of Incorporation to open a company checking account. Don’t use your personal account.
8. Obtain an occupational or business license from your State and/or Local government as required.
9. In your first Board meeting, also have the Board adopt By-Laws and a Conflict of Interest Statements. Samples of these are also all over the Internet.
10. If you are a Non-Profit, prepare and file with the IRS Form 1023, Application for tax-exempt status. Don’t receive tax-exempt donations until IRS approves. If you are a retailer or other business subject to sales tax collections, get registered with the State or Local government that oversee the collection and distribution of sales tax collections.

2 responses to “10 – Steps to Creating Your New Business or Non-Profit

  1. There is definately a lot to find out about this issue.
    I love all the points you’ve made.

  2. Paul Davidson

    Great article. Thanks for the info, you made it easy to understand. BTW, if anyone needs to fill out a form 1023, I found a blank form here http://goo.gl/FyA98x. This site PDFfiller also has some tutorials on how to fill it out and a few related tax forms that you might find useful.

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