Starting and operating a business is a daunting endeavor. According to the most recent data from the U.S. Bureau of Labor Statistics, nearly 1 in 5 businesses fail within the first year. On the other hand, the rewards of having a successful business are numerous. They range from financial stability and personal satisfaction to job creation and a positive economic impact.
Therefore, entrepreneurs must have a thorough understanding of the market, a well-developed business plan, and enough capital to launch and sustain their venture. Noelle Randall, an expert in business, real estate, and finance, discusses the five most important things every business needs to run smoothly.
Top Five Business Essentials for a Successful Business
1. Register The Business
Registering a business as an LLC, S-Corp, or C-Corp with the appropriate government agencies is crucial. However, many people tend to forget it. Registering as an LLC creates a separate entity from the owner, thereby protecting personal assets in the event of a lawsuit.
Additionally, dissolving the business becomes more manageable, and the business owner can transfer ownership without being personally affected. A registered business also raises the chances of obtaining funding. "Investors are unlikely to invest in a company that is not legally registered," says Noelle.
2. Secure an Employer Identification Number (EIN)
After registering a business, the next important step is obtaining an EIN. An EIN is similar to someone's social security number. Noelle shares that a business can get their EIN from IRS.gov for free. Businesses use EIN to pay taxes or even apply for credit cards. With an EIN, businesses can open a bank account in their business name and keep all their business funds separate from personal finances.
3. Open a Business Bank Account
Some business owners believe that a separate business bank account is optional and that their personal accounts can handle all financial transactions. However, Noelle disagrees and says that every business owner should have a dedicated business bank account. Having a different account keeps business funds separate from personal funds. Additionally, having a business bank account increases the likelihood of attracting lenders to provide financial support for the business.
4. Open a Merchant Account for Online Payments
Merchant processing accounts, such as Paypal, Stripe, and Quickbooks, offer businesses the ability to accept credit cards and check payments into their business accounts. "This is very important as many customers nowadays pay for service via credit cards or through merchant processing payment options," adds Noelle. In addition, merchants who process payments can also lend money to businesses based on their credit card processing and service usage.
5. Create a Website for the Business
Having a website is essential for modern businesses because it acts as a gateway for customers and is a critical factor in establishing credibility and winning the trust of potential customers. Noelle notes that in some cases, investors will examine a business's website to learn more about its products and services before making an investment decision.
Partnering with Banking Expert
Noelle emphasizes that these five elements are essential to creating a successful business. She also suggests that entrepreneurs open their bank accounts with the assistance of a trustworthy and strategic banking partner. North One Bank, a national bank that facilitates business transactions across the United States, is an excellent option. It provides a comprehensive solution for managing business finances, making everything a business requires readily accessible.