Expert Advice| 权威建议

Starting a US Business is a 3-Stage Process

December 15, 2012 5:16 pm | By John Gordon

Starting a business in the US is a 3 stage process: Determination, Planning and Action. For a US resident, the Determination stage means figuring out

  • What exactly do you want to do with your business? Will it be online, offline (“bricks and mortar”), or both? Is it important to be clustered around some type of hub (like tech startups in Silicon Valley, Boston, New York City and Austin, TX), or will it be a restaurant that serves a local neighborhood that can be just about anywhere?
  • Where to establish your US business? Is your current city, state, region the best place to get started? Is there another location with a better business environment? Is it time to try your new venture in a new part of the country? Is it important to be in a population center, or can it be in the suburbs or countryside?
  • Where to incorporate your US company? Should you incorporate in the same state where your business is located, or does another state like Delaware offer more benefits? Do you know how to find out the respective benefits?
  • Who do you need to round out your management team (if anyone)? If you need a co-founder, what can you offer (think cash, stock, options, glory)?
  • Your need for protecting your intellectual property: do you have a business process to protect? How valuable is your business or product name? For many startups, owning a patent is part of the valuation that a VC will consider. A distinguishing brand can be critical for standing out in a crowded marketplace.
  • Will you need to obtain any special licenses? This can vary by state and by industry.
  • Do you need staffing for the business to get started, or can you delay hiring for a while?
  • Will you need venture capital or other access to capital?
  • What is your need for marketing, supply chain and other support services?
  • Are there any tax incentives available, and what options are available to minimize your tax burden?

When the new business has worked though these points, and come up with the tentative answers, then it’s time to go the Planning Stage, where the founders will choose

  • The State of incorporation
  • Location of the business
  • Type of entity
  • Which bank to work with
  • An accountant to handle tax returns and keep an eye on finances
  • A lawyer to handle the legal end of things, including employment contract, non-disclosure agreements and shareholder agreements.

After the planning stage is done, it’s time for the Action Stage. These steps include:

  • Incorporating the new company
  • Hold the organizational meeting, confirming the owners and managers of the business, sorting who contributed what, who will be responsible for what, and who will own what
  • Obtain a federal tax number
  • Open a bank account
  • Lease office space
  • Hire employees
  • Start marketing and sales
  • Make stuff

For a non-US resident looking to set up a new business in the US, the Determination Stage has two additional steps, relating to America’s two most complicated sets of laws: tax and immigration:

  • What (if any) is the appropriate visa to apply for? Common working visa include L-1, E-2, E-3, H1B. Each type of visa has good and bad points, and each has conditions that may make the visa not available for you.
  • Which type of entity is most appropriate for you as a non-resident? Each type of entity has a tax consequence for non-residents that can be very expensive. While these problems can be fixed, it is much cheaper and far less stressful to set things up correctly from the beginning.

These are a lot of questions, but by answering them before you get started you will greatly increase your chances of business success. Do your best to come up with answers, and keep track of the areas that need more research.  Most of all, make sure this is something you want to do. Starting and running a business is a much bigger commitment than just working for someone else.  Make sure to have fun while building it up!

The writer of this article, John Gordon, is a graduate of the executive MBA program at Columbia University and the CEO of USA Corporate Services Inc., which offers services to entrepreneurs creating companies. For more information, see