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“I’m so bored.”

How many times a week do you utter that phrase? If it’s at least once, you’re in the same boat as roughly 63% of people. And according to the same report that drew that conclusion, how bored you are depends on several factors — like location and other demographics. But chances are, we all have at least one common outlook on boredom: It can be remedied by the internet.

That often manifests itself via mobile, where 90% of our time is spent on apps. And under the app umbrella, here’s how our time is broken down:

• Messaging and social: 68%
• Entertainment (which includes apps like YouTube): 44%
• Gaming: 33%

To add further insight, 70% of that time on mobile social apps is spent consuming media. What do these factors indicate? All in all, we use our mobile devices to stay amused. 

App developers are no dummies, either. The most strategic ones know that this boredom can be capitalized to earn revenue. But how does that work? Well, much of it has to do with psychology and — we hate to say it — how our brains are wired for addiction. We examined the research done in this area, and tracked down some of the apps that best monetized it.

The Psychology of Boredom

Why We Get Bored

A Chicken-and-Egg Scenario

Despite our use of mobile apps to relieve boredom, that might be what’s causing it in the first place. Researchers at Temple University have found that our increased attachment to mobile devices is making us less patient and more impulsive — both of which can precede a lower tolerance for lack of stimulation. It’s harder for us to sit still, because the technology is always there for us to check and scroll. And the more we use it, the less time we can spend resisting it.

That’s corroborated by findings of cognitive neuroscientist James Danckert, whose research has led him to think of “boredom as a deficiency in self-regulation,” he explains. “It’s a difficulty of engaging with tasks in your environment. The more self-control you have, the less likely you are to be bored.” And what’s another word for a lack of self-control? “Impulsive” — a trait more of us seem to be experiencing with increased mobile use.

Why We Use Mobile to Alleviate Boredom Anyway

“People will work very hard to relieve boredom,” writes Maggie Koerth-Baker for Scientific American — which is why, she says, we indulge in impulsive behavior, like binge-eating or other unhealthy activities, in order to alleviate it. But she goes on to explain that the answer to that often lies in novelty, using the example of an educational computer program designed for students with higher boredom levels, which insults the user every time a question is answered incorrectly.

Granted, we don’t spend all of our time on mobile devices being insulted — despite that common nature of social media — but it does provide a certain sense of novelty. It’s an instant remedy for inactivity that allows us to consume media, win games, and communicate with others. And our addiction to these devices — which is rampant enough to have actually earned a name: Nomophobia — works just like any other. We begin to need more of it in order to be satisfied.

And, in a nutshell, that’s how app developers monetize what they create — by leveraging our addiction. But which apps did it best? Have a look at our top picks.

3 Apps for Boredom That Became Big Money Makers

1) Tinder

Source: World Vector Logo

When Time magazine profiled the founders of Tinder in 2014, author Laura Stampler summarized the dating app flawlessly:

Users are shown photos of nearby potential matches and can swipe right to ‘like’ and left for ‘nope.’ Mutual right swipes result in a match, followed by the prompt to either send a message or ‘keep playing.’ This ‘Keep playing! Keep playing!’ mantra has led to an epidemic of 500 million swipes (and 5 million matches) a day.”

Notice the language Stampler uses here: “Epidemic.” Even if you’re not particularly interested in dating, the swiping becomes addicting — an inevitability to which I fell victim during my own days of singledom. I found myself swiping while standing on a subway platform, sitting in a waiting room, or even when watching mindless television. It became a way to occupy time, more than it was a way to meet people.

Perhaps that widespread behavior led to the unveiling of Tinder Plus: A paid version of the app with such premium features as being able to go back when you accidentally swiped the wrong way (“Rewind”), or being able to view potential matches outside of a certain local radius (“Passport”). Plus, it gives you the option to go ad-free. But there’s a catch — Tinder Plus costs twice as much if you’re over 30, which has rubbed a lot of people the wrong way.

I can see how these features might be appealing, especially when my own swiping increased. Before I deleted the app — which is a story for another day — the more I used the it, the less intrigued I was becoming with my potential matches. I was becoming bored. But I was also addicted to it, under the false belief that the more I swiped, the more likely I was to have that boredom alleviated. It aligns with psychology explained above. If I hadn’t deleted the app, my boredom may have motivated me to pay up for the ability to expand my options.

Today, Tinder has 1.7 paid members, illustrating the willingness of people to pay for more novelty.

2) Pokémon GO

Source: YouTube

When I recently visited a friend out of town, I noticed that she would furiously go about business on her phone whenever we were walking somewhere. “Are you lost?” I asked her, assuming she was looking at a maps app.

“No,” she replied. “It’s Pokémon GO,” a game that allows people to “catch” game characters by traveling to real-life places, and reap the benefits online, via the app. It is, in its way, a form of VR.

I was surprised — mostly because I thought that the Pokémon GO craze had passed by Halloween, and this visit took place several months later. Was my company that boring? Or had my friend become addicted to a game that she initially began using out of curiosity and boredom?

I wasn’t the only one asking those kinds of questions, which explains why numerous psychology publications set out to explain how our brains process apps like this one. In fact, Internet Gaming Disorder has officially been classified by the Diagnostic and Statistical Manual of Mental Disorders as a type of addiction — one that “prompts a neurological response that influences feelings of pleasure and reward, and the result, in the extreme, is manifested as addictive behavior.”

That aligns with research showing that people more prone to boredom are also more inclined to fall victim to drug and alcohol abuse. And while it could be argued that addiction to a mobile app might not be as severe, it still follows the same psychological process and path of usership — more is required to reach satisfaction. That could be why the app experienced such monetary success when it began to provide in-app purchases, which ended up accounting for $2.3 million of revenue each day, and totaling $342 million by the end of 2016.

3) Candy Crush Saga

Source: Game Revolution

This example shows yet another instance of in-app purchases reaping huge financial rewards. Candy Crush Saga, owned by gaming giant King Digital, is a free app at first glance. It doesn’t cost anything to download, but its premium add-ons — like extra lives and other features that allegedly help you reach a higher score — are largely responsible for the app’s estimated $1,103,436 daily revenue.

But here’s the thing. When you win, reach a high score, or accomplish some other sort of game-playing feat — it activates the same part of your brain that cocaine does. That research also indicates that these “winning” actions trigger the same signals of pleasure that are produced by substances like methamphetamine, and follows psychological circuit behavior that’s also observed in heroin addicts.

Are we starting to get the picture?

I won’t bother repeating myself about the pattern of addiction and its too-much-is-never-enough behavioral implications, because it’s clear by now — $1,103,436 in daily revenue is not just the result of people trying to find something fun to do. It’s evidence of what happens when mobile addiction leads to humans becoming more easily bored, and how that boredom exacerbates compulsive digital habits.

Is It a Question of Ethics, Then?

Unfortunately, there is no easy answer to that question — and perhaps it’s fodder for another blog post (let us know).

But it does go to show that marketers can capitalize on widespread boredom, even ethically. It’s an opportunity for SMBs and nonprofits, for example, to partner and raise awareness of each other. Perhaps, instead of in-app purchases, digital tools can be developed by these brands to promote in-app donations.

Let’s say a local real estate agency wants to try an initiative like this one. It could develop an app for listings and include a trivia game. Instead of asking people to pay for additional in-app features, it can encourage people to keep using the app by advertising a donation to a brand-relevant charity — like Habitat for Humanity — for every X number of downloads, or X number of users who receive a perfect score.

Boredom can be leveraged for good. It just requires a bit of creativity and strategy.

How have you addressed boredom with your mobile marketing? Let us know in the comments.

 

You love data. Nothing makes you — and your client — happier than a chart that shows just how great a campaign is performing. 

But collecting all that data each month, organizing it, creating charts, and writing up reports is draining your team’s time. 

Typically, agency staffers spend around four or five hours per client each month reporting on digital. So say you’re managing around 20 clients: Your effective hourly rate for each employee is $75, and it takes four hours to create each report. You’d save almost $5,000 per month if you automated this process. 

What’s worse? These reports are essential to the client, but she rarely spends more than a few minutes breezing over them — she wants confirmation that things are trending up and to the right. If they’re not, you’re going to need to address that over the phone or in-person. A report isn’t going to help her understand the context of the problem or how you’re going to fix things. 

To create reports quickly and easily for many different clients with different KPIs, consider using one of the below marketing reporting tools. These will help to reduce the amount of time you spend gathering data and creating reports so you can spend more time on the work that matters — building high-performing campaigns.

9 Client Marketing Reporting Tools for Agencies

1) Megalytic

Megalytic provides templates so that you can easily import your data from sources such as Google Analytics, AdWords, Facebook, a CSV file, and others.

The tool has a library of widgets, such as ecommerce sales by geography, AdWords conversions, social referrals, etc., that you can easily add to your reports for more in-depth details. You can also set up reports to be automatically sent to a specific list of individuals, and then track to make sure they landed in the recipient’s inbox. 

2) Databox

Databox enables agencies automate the client reporting process by compiling data from many popular marketing software and services — including HubSpot Marketing, HubSpot CRM, Google Analytics, Adwords, Facebook ads, Twitter, Linkedin Company Pages and Instagram. After connecting your client’s services, Databox becomes the single place where your agency’s team can set goals, monitor progress, calculate ROI numbers and receive alerts when things aren’t going to plan.

Databox offers pre-configured reports (like the one below that features data pulled from HubSpot CRM and HubSpot marketing), and the option to build your own custom reports via their designer. You can view your data across multiple devices, including your mobile phone, desktop, TV, and via Slack.

3) RavenTools

RavenTools is useful for agencies and their clients who need a few more reporting features. There’s a research center for analyzing competitors or target sites, the ability to schedule social media updates, a tracker for link building campaigns, and an SEO auditor.

There’s also a useful feature for analyzing your client’s site against those of their competitors — you can compare backlinks, domain authority, load time, page speed, and other metrics. The report feature has drag-and-drop functionality and makes it easy to add the results of the tests and research performed through RavenTools additional features to your reporting documents. 

4) TapAnalytics

This tool works with more than 100 service providers to pull in data quickly without the help of a support team or IT pro. It has a ton of customizable widgets you can use to drill down into specific metrics, uncover problem areas, or show improvements in a client’s marketing efforts — all tailored to the specific needs of the client.

It also provides user permissions and roles to protect your client’s data from being viewed by people who shouldn’t have access to the account, and agencies can create an overview dashboard that shows all of the agency’s clients in one screen, making it easy for leadership to quickly determine problem areas and which accounts need extra attention. In addition, it can be fully white-labeled and provides a feature for adding a service charge (a percentage markup of your choosing) to a client’s campaign. 

5) Wordsmith for Marketing

This white-labeled tool turns analytics data into a written report that highlights the results of your digital marketing efforts. You simply connect your Google Analytics or Adwords accounts, and schedule when you would like the report to be sent to the client’s account manager.

During the review, you can add in notes and suggestions for improvements prior to it being sent to the client. The tool is created by Automated Insights, a platform that the Associated Press is using to write more than 4,000 quarterly earnings reports without humans.

6) DataHero

DataHero integrates with cloud services beyond those focused on marketing, such as ZenDesk, GitHub, Eventbrite, and more, so you can customize your reporting to the specific campaign needs and activities of your various clients. 

With this reporting tool, you can upload data or choose the data to import, and it gives you suggestions on the right chart to visualize your data. DataHero then gives you the option to manipulate and add data to the chart, making it easier to create insightful and useful charts for your client’s review. (Disclosure: DataHero is a HubSpot integration partner.)

7) DashThis

For agencies that want the client experience to remain with their brand, DashThis provides a custom URL and a fully white-labeled account. The tool integrates with a ton of platforms, including Instagram, Ahrefs, comScore, and Perfect Audience.

DashThis surveyed agencies and found that there were three main report types agencies and their clients wanted. They created templates reflecting these results that are simple to set up and perfect for keeping track of performance each month.

DashThis is primarily a dashboard tool, rather than reporting, so use this for keeping clients or your team up-to-date on performance throughout the month. However, you can send notifications and a report summary or create a PDF from the chosen dashboard. 

8) Dasheroo

Dasheroo gives agencies the ability to create client teams with different levels of permissions so that data stays secure between multiple accounts. It includes templates to help you create charts more quickly, and it has an interesting feature called a mashup, where it will compare two different metrics so it’s easier to spot trends and issues. 

9) Klipfolio

This cloud app lets users to build customized business performance dashboards that sync in real-time across multiple devices — including TV monitors, web browsers, and mobile devices. For agencies looking to get a high-level view of their clients’ performance from numerous data sources, Klipfolio delivers a wide variety of options to connect both on-site and cloud-based sources. 

What tools do you use to speed up monthly reporting? Let us know in the comments below!

Editor’s Note: This post was originally published in April 2016 and has been updated for freshness, accuracy, and comprehensiveness.

Maybe you have a great business idea. Or perhaps you’re fascinated with the process of starting a business and building it from the ground up, and want to learn how it’s done.

For instance, where do you get money to fund your new business? What’s your company mission? Who’s your target customer, and what tactics and messaging should you use to reach them? Where can you find someone to build your website? Should you even be spending time on social?

When you start an online business, there are thousands of questions that need answering. You’ll quickly find that coming up with the idea for a business is the easy part. Actually executing on that idea is where it gets interesting.

Execution is what differentiates a great thinker from an entrepreneur.

Everyone wants more visitors, more qualified leads, and more revenue. But starting a business isn’t one of those “If you build it, they will come” situations. In order to build a successful company, you’ll need to create and fine-tune a business plan, assess your finances, complete all the legal paperwork, pick your partners, choose the best tools and systems to help you get your marketing and sales off the ground … and a whole lot more.

We’re here to guide you through that process. On this page, you’ll find a library of the best free tools and resources to help you start selling and marketing your business. Keep scrolling, and you’ll find a guide on how to start a business, from the paperwork and finances to defining your business goals to building and growing your business online.

Free Tools & Resources for Startups

Before we dive into our list, we want to make sure you know about our scholarship program HubSpot for Startups. It’s a 90% scholarship for seed-stage startups that includes all of HubSpot’s software and tools to help you acquire customers and grow, as well as unlimited technical support and access to HubSpot’s community of thousands of founders worldwide, You can learn more and apply to the HubSpot for Startups program here.

Now, let’s get into HubSpot’s best free marketing and sales tools and resources, followed by a complete guide for how to set up and finance your business.

The Best Free Marketing Resources

Marketing Plan: A Blueprint for Start-Ups

A 20-page guide that covers how to build a sales and marketing machine, which demand generation activities with the biggest return on investment, and more.

HubSpot Marketing Free

Our free marketing tool that gives you insight into what every lead does before and after they fill out a form. It includes built-in analytics that make it easy to learn which pages, offers, and traffic sources are driving the most conversions for you.

Website Grader

Enter your website URL and email address, and we’ll send you a detailed grade on your website’s performance, mobile, SEO, and security, along with detailed tips and resources for making impactful improvements on your website.

Press Release Templates

Downloadable press release templates you can customize, along with a corresponding guide to building a press release and promotion plan.

Case Study Templates

Downloadable case study templates that show you a sample case study structure from top to bottom, along with business case study examples, tips on finding the right candidates, advice on how to reach out to them, and sample interview questions to inform your case study content.

386+ Content Creation Templates

Free templates for all your visual content creation needs when you’re first starting a business. The kit includes 100 social media image templates, 8 PowerPoint presentation templates, 50 call-to-action templates, 15 infographic templates, 5 ebook templates, 5 blog post templates, and more.

How to Create Email Newsletters

A guide with tips for writing, designing, optimizing, and measuring a successful email newsletter — including some awesome, real-life examples of great email newsletters.

The Best Free Sales Resources

Email Signature Generator

A free tool that creates a professional email signature you can easily add to your Gmail, Outlook, Apple Mail, Yahoo Mail, or any other email provider.

21 Sales Email Templates

A list of 21 email templates that have been used with great success by real companies like us here at HubSpot, as well as folks at Troops, Chet Holmes International, FEED Agency, and Groove. These email templates have closed a $100,000 deal, seen an 80% response rate within 24 hours after a phone call, and received a 33% response rate after the prospect went dark.

Sales Call Scripts

An easy-to-follow sales call checklist that can help you build rapport and develop trust, understand the prospect’s pain points, identify key decision-makers, and secure a follow-up meeting.

Daniel Pink’s Sell Like a Human Video Series

A monthly video series where Sales Expert Daniel Pink and special guests will solve your biggest sales challenges in under 30 minutes.

Sales Process Template

A simple, easy-to-follow sales process template to help managers coach their inside sales reps into following a proven, standardized process from discovery to close. It also includes which key activities sales reps must follow to keep deals moving forward, and important sales strategies for increasing productivity, efficiency, and data visibility.

Sales Close Rate

Compare your sales close rate against your industry competitors using data from over 8,900 companies segmented by 28 industries.

Sales Email Copywriting Course

The language and tone you use in your sales emails can make or break your sales deals. This course was created by Joanna Wiebe, the creator of Copy Hackers and the original conversion copywriter. In it, she covers how to write sales emails that help you close more deals.

The Best CRM

HubSpot CRM is the only free CRM that lets you manage your pipeline, automate the most tedious sales tasks, and make it easier to close deals quickly. You’ll end up doing more deals and less data entry. Plus, you can manage up to 1,000,000 contacts, users, and storage without any expiration date.

Now that we’ve covered the best tools and resources for starting a business, let’s get into how to actually start one.

How to Start a Business: A Complete Guide

Starting a business involves a whole lot of moving pieces, some more exciting than others. Brainstorming business names? Fun! Filing taxes? … Not so fun. The trick to successfully getting your business off the ground is to meticulously plan and organize your materials, prioritize properly, and stay on top of the status and performance of each and every one of these moving parts.

From registering with the government to getting the word out about your business to making key financial decisions, here’s an overview of what you’ll need to do to start a successful business.

The Legal Paperwork

Business Structure, Government Registration, Taxes & More

The not-so-romantic part of a starting a new business is all the paperwork and legal activities. This includes things like determining the legal structure of your business, nailing down your business name, registering with the government, and — depending on your business structure and industry —  getting a tax code, a business license, and/or a seller’s permit. 

Furthermore, businesses are regulated on the federal, the state, and sometimes even local level. It’s important to check what’s required on all three of those levels. When you register your business with the government, be sure you’re covering registration on all the levels required for your business’ location. Your business won’t be a legal entity without checking these boxes, so stay on top of it. 

Clearly, it can be overwhelming to figure out what legal steps you need to take for your particular case, so let’s break it down. Below, you’ll find a brief explanation of what goes into each one of these steps, along with links to helpful resources where you can dig in to the details. (Note: These steps are for starting a business in the U.S. only.) 

Legal Structure: The 4 Common Business Types

The legal structure of your business will determine what you need to do to register with the government, how you’re taxed, what risks you need to take on, and so on. Many people starting a business will choose to register either as a corporation or a Limited Liability Company (LLC) because those two structures will give owners limited liability protection. But, on the other hand, there’s a lot more paperwork and expense associated with a corporation or LLC.

Here’s a list of four common business structures, along with the pros and cons of each and how taxes work for each one.

1) Sole Proprietorship

Example: Freelance graphic design.

What it is: A sole proprietorship is a business that’s owned and run by one person, where the government makes no legal distinction between the person who owns the business and the business itself. It’s the simplest and most common way to operate the business, and the business can even have its own distinctive name if you register what’s called a Doing Business Name (DBA). We’ll get back to that in the “Naming Businesses” section.

Pros: It’s easy and inexpensive to create a sole proprietorship because there’s only one owner, and that owner has complete control over all business decisions. Tax preparation is also pretty simple since a sole proprietorship is not taxed separately from its owner

Cons: It can be dramatically more difficult to raise money and get investors or loans because there’s no legal structure that promises repayment if the business fails. Also, since the owner and the business are legally the same, the owner is personally liable for all the debts and obligations of the business.

How taxes work: The individual proprietor owns and manages the business and is responsible for all transactions, including debts and liabilities. Income and losses are taxed on the individual’s personal income tax return at ordinary rates. In addition, you are also subject to payroll taxes, or self-employment taxes, on the money you earn. (More on self-employment taxes later.) Find IRS tax forms here.

2) Partnership 

Example: Multiple doctors maintaining separate practices in the same building.

What it is: A partnership is a single business where two or more people share ownership, and each owner contributes to all aspects of the business as well as shares in the profits and losses of the business.

Pros: It’s generally pretty easy to form a business partnership, and it doesn’t tend to be super expensive, either. Having two or more people equally invested in the business’ success allows you to pool resources. It also means you have access to more than one person’s skill set and expertise.

Cons: Just like a sole proprietor, partners have full, shared liability if the business goes south. That also means that partners aren’t just liable for their own actions, but also the actions of their partner(s). There is a variant on partnerships called a limited liability partnership, or LLP, that protects against that — which is how most law firms are organized, for example.

Finally, when more than one person is involved in decisions, there’s room for disagreement — which means it’s important to have an explicit agreement over how the obligations and earnings will be split, especially if/when things go wrong.

How taxes work: To form a partnership, you have to register your business with your state, a process generally done through your Secretary of State’s office. Find IRS tax forms here. 

3) Limited Liability Company (LLC)

Example: A small design firm.

What it is: LLCs are a type of business structure that’s more complex than sole proprietorships and partnerships, but less complex than corporations. They are called “pass-through entities” because they’re not subject to a separate level of tax. Most states don’t restrict ownership on LLCs, and so members can include individuals, corporations, and even other LLCs and foreign entities. Most states also permit “single-member” LLCs, those having only one owner.

Pros: Founders have a lot of flexibility when it comes to governance issues.

Cons: LLCs are often more complex than sole proprietorships or partnerships, which means higher initial costs, and certain venture capital funds are hesitant to invest in LLCs because of tax considerations and the aforementioned complexity. That being said, they’re simpler to operate than a corporation because they aren’t subject to as many formalities.

How taxes work: LLCs have the benefit of a “flow-through” tax treatment, meaning that the owners — not the LLC — are the ones who are taxed. Having only one level of tax imposed makes taxes easier. Find IRS tax forms here.

4) Corporation 

Example: Microsoft, Coca-Cola, Toyota Motor, and almost all well known businesses.

What it is: A legal entity that is separate and distinct from its owners, and has most of the rights and responsibilities that an individual possesses (to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes.) It’s more complex than the other business structures, and it’s generally suggested for larger, established companies with multiple employees.

Pros: They make seeking venture financing easy.

Cons: Because they’re complex than other business structures, they can have costly administrative fees, and more complicated tax and legal requirements.

How taxes work: Corporations are required to pay federal, state, and in some cases, local taxes. Any profit a corporation makes is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends, which creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation, but they are also not responsible directly for taxes on their earnings — just on the dividends they give to shareholders. Find IRS tax forms here.

Choosing & Registering Your Business Name

Establishing a business name is a little more complicated than making a list and picking your favorite. You’ll use the legal name of your business on all your government forms and applications, including your application for employer tax IDs, licenses, and permits.

If you’re using a name other than your personal name, then you need to register it with your state government so they know you’re doing business with a name other than your given name. 

First thing’s first: Before you register, you need to make sure the name you want is available in your state. Business names are registered on a state-by-state basis, so it’s possible that a company in another state could have the same name as yours. This is only concerning if there’s a trademark on the name. Do a Trademark search of your desired name to avoid expensive issues down the road.

Speaking of who’s using which names online, see if your desired domain names are available by doing an online domain search. Do the same with your desired social media handles. If the domain name and/or social media handles you want aren’t available, then some of you might consider changing your business name. 

For new corporations and LLCs: Your business name is automatically registered with your state when you register your business — so you don’t have to go through a separate process. There are rules for naming a corporation and LLC, which you can read about here.

For sole proprietorships, partnerships, and existing corporations and LLCs (if you want to do business with a name other than their registered name), you’ll need to register what’s called a “Doing Business As” (DBA) name. You can do so either by going to your county clerk’s office or with your state government, depending which state you’re in. Learn how to do that here.

Want to trademark your business name? A trademark protects words, names, symbols, and logos that distinguish goods and services. Filing for a trademark costs less than $300, and you can learn how to do it here.

All About Business Taxes

Business owners are obligated to pay specific federal taxes, and the amount of those taxes is determined by the form of business entity that you establish. All businesses except for partnerships need to file an annual income tax return. Partnerships file what’s called an information return. 

Any business that’s owned and operated in the United States needs an Employer Identification Number (EIN), which you can apply for on the IRS’ website here.

Once you’re registered, it’s time to figure out which taxes you’ll be responsible for.

Self-employment tax (SE tax) is a Social Security and Medicare tax for people who work for themselves, i.e. business owners. SE taxes require filing Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. (Note: There are special rules and exceptions for fishing crew members, notary public, and more, which you can read about on the IRS’ website here.)

When you have employees, you (as the employer) have certain employment tax responsibilities that you need to pay, as well as forms you need to file. Employment taxes include Social Security and Medicare taxes, federal income tax withholding, and federal unemployment (FUTA) tax. Learn more about employment taxes for small businesses on the IRS’ website here.

Excise taxes are also something you need to consider, depending what you sell, where you operate, and so on. For example, in the U.S., there’s a federal excise tax on certain trucks, truck tractors, and buses used on public highways. See which excise taxes you might be responsible for on the IRS’ website here. 

Seller’s Permit

If your business sells tangible property to the public either as a wholesaler or retailer, then in most states, you need to apply for a seller’s permit. “Tangible property” simply means physical items, like clothing, vehicles, toys, construction materials, and so on. In some states, a seller’s permit is required for service-oriented business, too, such as accountants, lawyers, and therapists.

The seller’s permit allows you to collect sales tax from buyers. You’ll then pay that sales tax to the state each quarter by putting the sales tax permit number on the state’s tax payment form. 

You can register for a seller’s permit through your state’s Board of Equalization, Sales Tax Commission, or Franchise Tax Board. To help you find the appropriate offices, find your state on this IRS website. 

Business License

Almost every business needs some form of license or permit to operate legally — but the requirements vary, which can get confusing. Which specific licenses or permits does your business need? To figure that out, go to this SBA.gov website and select the state from which you’re operating your business. It’ll tell you the specific license and permit requirements in that state. 

Financing your Business

From the day you start building your business until the point where you can make a consistent profit, you need to finance your operation and growth with start-up capital.

Some founders can finance their business entirely on their own dime or through friends and family, which is called “bootstrapping.” This obviously gives the business owners a ton of flexibility for running the business, although it means taking on a larger financial risk — and when family’s involved, can lead to awkward holiday dinner conversations if things go wrong.

Many founders need external start-up capital to get their business off the ground. If that sounds like you, keep on reading to learn about six of the most common kinds of external capital you can raise.

1) Seed Financing 

If you’re looking for a relatively small amount of money, say, the investigation of a market opportunity or the development of the initial version of a product or service, then seed financing might be for you. Oftentimes, this money will come from the founders themselves, from friends and family, from angel investors, and even from potential customers.

There are many different kinds of seed financing, but the one you’ve probably heard of most is called seed round financing. In this case, someone will invest in your company in exchange for preferred stock. If your company gets sold or liquidated, then investors who hold preferred stock often have the right to get their investment back — and, in most cases, an additional return, called “preferred dividends” or “liquidation preferences” — before holders of common stock are paid. 

2) Accelerators

Accelerators are highly competitive programs that typically involve applying and then competing against other startups in a public pitch event or demo day. In addition to winning funding and seed capital, winners of these programs are also rewarded with mentorship and educational programs.

Although accelerators were originally mostly tech companies and centered around Silicon Valley, you can now find them all over the country and in all different industries. If this sounds like something you’d be interested in, here’s a list of the top accelerators in the United States to get you started.

3) Small Business Loan 

If you have a really rock-solid plan for how you’ll spend the money in place, then you might be able to convince a bank, a lender, a community development organization, or a micro-lending institution to grant you a loan. 

There are many different types of loans, including loans with the bank, real estate loans, equipment loans, and more. To successfully get one, you’re going to need to articulate exactly how you’ll spend every single penny — so make sure you have a solid business plan in place before you apply. You can learn more about SBA.gov’s loan programs here.

4) Crowdfunding

You might ask yourself, what about companies that get funding through platforms like Kickstarter and Indiegogo? That’s called crowdfunding, which is a newer way of funding a business. 

More importantly, it typically doesn’t entail giving partial ownership of the business away. Instead, it’s a way of getting funding not from potential co-owners, but from potential fans and customers who want to support the idea, but not necessarily own it. What you give donors in exchange is entirely up to you — and typically, people will come away with early access to a product, or a special version of a product, or a meet-and-greet with the founders.

When you crowdfund your business, you open an account on those platforms and publish a detailed description of your business, your goals, and how much money you need and why. From there, anyone with an internet connection can contribute money toward helping your business via an online donation. The better story you tell in your crowdfunding campaign website, the more likely you’ll be to get donations.

5) Venture Capital Financing

Only a very small percentage of businesses are either fit for venture capital or have access to it. All the other methods described earlier are available to the vast majority of new businesses.

If you’re looking for a significant amount of money to start your company and can prove you can quickly grow its value, then venture capital financing is probably the right move for you. However, even though venture capital financing is fashionable, it’s rarely available to startups. In fact, many people believe it should be avoided altogether unless you’ve got a billion dollar idea.

Venture capital financing usually means one or more venture capital firms make large investments in your company in exchange for preferred stock of the company — but, in addition to getting that preferred return like they would in series seed financing, venture capital investors also usually get governance rights, like a seat on the Board of Directors or approval rights on certain transactions. VC financing typically occurs when a company can demonstrate a significant business opportunity to quickly grow the value of the company but requires significant capital to do so.

Well, there you have it. We hope this post has helped give you a better idea of what it takes to start your own business — from setting up all the legal and tax paperwork, all the way to actually marketing and selling your product or service. The execution is up to you. Good luck out there!