How to (Officially) Start an Online Coaching Business
Being a person of action always starts with a plan: step-by-step items that you can complete that, when done, will help you meet your goal. Starting a business is no different. While the whole process may seem daunting, officially starting a business is easier than you might think and an essential step to professional coaching. This article breaks down starting a business into just three steps. Each step is easy enough to be completed in less than a day.
Three Steps to Start a Business
Step 1: Create a Business Entity (LLC)
The first step towards starting a business is to establish a legal entity. While not strictly necessary, forming a limited liability company (LLC) offers flexibility and protection that most small businesses want.
To create an LLC, you need to file Articles of Organization with the appropriate state agency. You can find the agency and the necessary documents online with a simple search. Typically, your state agency will also have you perform a search of existing businesses in your state to make sure that your business name is not already taken. It’s also wise to search the US Trademark Office to ensure your name doesn’t conflict with existing trademarks. (Note, however, that just because a trademark exists doesn’t mean you can’t use it, only that the mark is protected in certain usages that will be specified on the US Trademark website.) Once you have confirmed the availability of your business name, you can proceed to register your LLC by filing the Articles of Organization. Follow the instructions provided by your state’s filing agency, which may refer to it as “Register a Business” or “File Articles of Organization for a Limited Liability Company.” If required by your state, register as an agent as well.
Step 2: Apply for an Employer Identification Number (EIN)
An Employer Identification Number (EIN) serves as a social security number for your business. It’s necessary for tax purposes, opening a business bank account, and hiring employees. Applying for an EIN is straightforward and can be done online through the IRS website. Visit the IRS website and click on “Apply for an Employer Identification Number (EIN) online.” The online application process is easy, free, and quick. Answer the questions as accurately as possible, and try not to overthink them. Once you have your EIN, you’ll have an essential identifier for your business operations.
Step 3: Open a Business Bank Account
With your Articles of Organization and EIN in hand, it’s time to open a business bank account. A separate business bank account is crucial for proper financial management. Contact various banks to compare business account options and select one that suits your needs. When visiting the bank, bring your identification, Articles of Organization, and, in some cases, an Operating Agreement (if applicable).
Operating agreements outline ownership percentages and responsibilities, particularly if you have partners.
Once your business bank account is set up, ensure that all business revenue and expenses are routed through it. Deposit all coaching revenue, whether it’s in the form of checks, ACH payments, PayPal, Venmo, or Cash App, into your business checking account. Similarly, spend all coaching and business-related expenses from your business bank account. This practice allows you to track your income and expenses accurately, ensuring that business-related costs are deducted from your income during tax calculations.
By following these three steps, you’ll be well on your way to launching your business successfully. To streamline your journey further, consider using the Turnkey Coaching App, a comprehensive platform that simplifies payment collection, business management, and client acquisition for online coaching businesses. Take action, start today, and put your feet on the path to being a business owner and entrepreneur.