The start of a new year always lends itself to dreaming – of new heights to achieve personally, new places to travel, new financial goals to set, and so much more. No matter how 2018 went for you, 2019 is a completely new canvas, and you have an opportunity to paint your brightest and boldest colors.
So why not start up that business you’ve always dreamt of? If you’ve been dreaming of leaving your day job and diving into something new, perhaps 2019 is the year to take the plunge!
After many years of hard work gaining experience and knowledge it should be easy to start, shouldn’t it? Not really…starting a new business is exciting, but the path is also fraught with many details – small and large – that can seem tedious at best and overwhelming at worst.
If you decide to move forward, you could be on your way to making your dreams become a reality, creating the life you want and doing the things you love. But where to start? Below we’ve provided a 10 critical steps and knowledge points to help you get going.
Note that this list is specifically focused on Seattle-area Construction companies, but in many industries and locales there are likely some equivalent actions you will need to take, no matter the type of business you are starting. Now is the time to turn that dreaming into action!!!
Choose a Business Structure – Sole Proprietor, Partnership, Corporation, or LLC? There are specific tax implications for each option. We suggest meeting with a CPA who can walk you through the pros and cons of each to help you decide which option is best for you.
Apply for an Employer Identification Number (EIN) with the IRS – This number will allow you to open bank accounts for the business, apply for state business licenses, pay employer taxes, and file tax returns.
Register your Business with the Secretary of State – This is necessary if your new business will be a partnership, corporation, or llc.
Apply for a Washington State Business License – This will allow you to conduct business in the state. This application is where you will specify if you plan on hiring employees. If so, once you file this application, the two entities that handle unemployment insurance (Employment Security Department) and workers compensation (WA L&I) will be notified automatically and you will be assigned account numbers from each entity. Also, if you know you will be doing business in specific cities, you have the option to add city license endorsements while filing this application. Not all cities offer their licenses through this service, so check beforehand to see if your city has a separate application.
Purchase Bond & Liability Insurance – WA L&I requires contractors to have a surety bond for either $12,000 (General Contractor) or $6,000 (Specialty Contractor). Liability insurance coverage can be a $50,000 property damage policy and $200,000 public liability policy OR a $250,000 combined single limit policy. You can find more information here.
Complete Contractor Registration – This allows you to work as a licensed contractor in the state. Take your completed registration application and proof of your bond & insurance to any L&I office to have it notarized and processed.
Apply for City Licenses & Permits– Many cities in WA require you have a city license to conduct business there. Access WA is a helpful site that links to each city’s web page directly.
City of Seattle – Seattle has specific labor laws that are different than the state laws. If you will have employees working in Seattle, here is where you can find information on their requirements.
Apply for Reseller Permit – This allows you to purchase materials purchased for direct resale without paying sales tax.
B&O and Sales Tax – Understanding the requirements specific to your industry is critical to be sure you are charging your customers the correct sales tax rates. DOR has provided a guide for contractors to understand their requirements.