Starting A Business in Los Angeles, the slightly longer than it needs to be version:
Step 1
So many people have ideas that end up going nowhere simply because the concept of starting a business seems to be overwhelming. It’s actually really easy and I aim to show you how.
There are a couple of things you need to know about your own business before you get started. First, unless you go the route of incorporation (such as an LLC or C-Corp which I’ll explain later), a small business is just you with a different name.
In the next few posts, I’ll walk you through all of the steps it takes. In fact, if you start on this path first thing in the morning, you can have your own business by the end of the day.
Step 2
So here I am continuing my work on this series, and my friend Greg calls me yesterday to tell me that he needs to open a bank account for his design business. PERFECT! We’ll use Greg as a case study.
First thing… What are you going to call yourself. If you go with something that incorporates your name, such as Flower by Greg or Greg Productions you actually don’t really need to do much. Most banks will accept checks made out to companies with your name in it. But that’s not why we’re here.
Greg needs to file a Fictitious Business Name Statement which he can do via mail, or by visiting the Los Angeles County Registrar. They chose the URL www.lavote.net, presumably because someone else had stolen the other good names and made them into adult sites. Or it could just be that the most commonly known service provided by the Registrar is voting records and counting. On the front page, you’ll see a nice little picture of the current Registrar:
Isn’t that nice? You’ll also find a lot of information about marriage licenses, voting, death certificates, etc. That’s not why we’re here. Where you really want to be is here. The Registrar (which is also the County Clerk) did a really terrible job with this web page, and it becomes a major stumbling block for people who want to name their business. There are big blocks of text, randomly placed links and stern warnings in RED that don’t really mean much. I aim to sort this out for you.
Ok, so we know Greg needs a name for his new venture and that he also needs to file aFictitious Business Name Statement.
Before you move forward, you’re going to want to make sure no one else is using your business name. The Registrar website has a link to an Internet Search of Names. Here is where you find out if your new business name (that you spent all night coming up with) is taken or available.
When I type in just the name Greg, here are a few selected gems that pop out:
Greg A Carlson Enterprises
Greg and Jim’s Meat Co
Greg Fabuloux Enterprises
Greg Frost Mediation
Greg The Great Productions
Gregarious
And the list goes on and on and on. If you type in Greg’s Awesome Avatars… Guess what boys and girls? We’ve found a winner! Now, while you’re jumping around with glee that in LA County, no one has taken your name, you need to think of a few more things first.
Fictitious Business Name Statements aren’t the only means of getting yourself a business name. If you want to go the long complicated route, you can Incorporate. You Incorporate with the State of California and the Secretary of State has a listing of corporate entities that you can search. You’ll want to visit the California Business Portal(which incidentally is very well organized and lots of info on starting and maintaining a business) to conduct your search of corporations.
The California Business Search page lets you search for both Corporations and Limited Partnerships (LPs) and Limited Liability Companies (LLC). Be sure you search both categories! While technically you can have your own company in a county that shares a name with an LLC or Corporation, it’s not a good practice, so don’t do it.
Ok. Assuming you’ve come up with the name, and that you’ve searched high and low and found that you still have a bit of creativity left in you, you can go to the next step, Running the Gauntlet at the County Building.
Step 3
So if you’re this far, you have a name for your business that is unique only to you. You’re ready to fill out the paperwork!
First off, download the Application here.
One thing I should note at this point is that a Fictitious Business Name is also known as a DBA (Doing Business As). I’ll use the term interchangeably. The form is straightforward, and since it’s just you setting this up, you don’t need all sorts of complicated signatures. Those boxes are for a whole other day.
You’ll also notice multiple Section Four spaces. Unless you’re setting up a partnership, you don’t need to fill these out.
You can file 3 FBNs with the above form, and then attach additional forms if necessary. You pay $18 for the first name and $4 for each additional name. You’ll pay this fee when you get to the window.
And now to the title of this post. When you arrive at the County Clerk building, there will be tables, tents, chairs and lots of well dressed people out front milling about with clipboards. These people want to take advantage of you. Not in the good way either. They’re trying to be your best friend in order to have your FBN published in their paper. I should probably explain that part to you.
All new FBNs have to be filed in a ‘Newspaper of General Circulation’. Theoretically, this means that the public can check up on people filing those scary sounding Fictitious names. No one really checks. In fact, if you look at the list maintained by the County, you’ll see that you’ve never heard of most of these papers. I would guess that 90% of them exist solely for the purpose of publishing FBNs. That isn’t to say that they’re bad papers… They get the job done for you legally. But every penny that these ’sales people’ squeeze out of you is basically pure profit. I’ll come back to them in a minute.
So you’re walking in. Ignore these people. If they ask you why you came today, tell them it’s to get the death certificate of your brother/sister/parent/relative. That’ll shut ‘em up. Step inside of the poorly lit badly designed building and enjoy the smell of your Government at work. Look around for signs directing you to FBN filings. I’ve been there four times and it has been in a different office every time. If you get lost, ask for help. But do not ask anyone who you saw outside or who has even a remotely non-bureaucratic air about them - they will screw you. Once you find the office, step inside and be quiet.
The people who work behind the bullet proof glass now in front of you hate their jobs. I actually think the glass is to protect you, not them. First thing you’ll probably notice is the cornucopia of society that you are now part of, if only for a few minutes. Then you’ll see the giant hand written signs telling you that under no circumstances can you borrow a pen. Remember to bring a pen with you and don’t share it. That sign is there for a reason. I should probably also mention that it’s a good idea to print three copies of your completed application and to bring a blank one along. One of the few highlights of these employees’ day is when they point out an error in your application. Then you have to start over. They like that.
Once the paperwork is in order, and you’ve waited in line three times, it’s your turn to hand over your money. The employee will inspect your paperwork, give you a total and you pay them. They don’t really say anything, and most people simply leave. What you should do is step to the next window to pick up your copy of the filed documents. They will have placed a purple stamp in the upper right hand corner with today’s date. That means you’re gold. According to the county, you now have a Fictitious Business Name. Despite your dreams of financial freedom and Dom Perignon, there are a few steps left to the process.
Congratulations! You now have a stamped copy of your FBN statement. Now it needs to be published. And now would be the time to talk to these eager young sales people out front.
I warned you before not to talk to them. If you start up a conversation early, they “help” you by hand carrying your paperwork for you, and they even supply pens! They act like your friend the whole time and pretend that they’re volunteers or just like to help. But then, when it comes time to pay them to publish your FBN statement in their paper, they give you some ridiculous price.
Never pay more than $30.00 to have your FBN published. They usually start at $50 and go down from there. Tell them you’ll talk to someone else. Remind them that you were smart enough to get the purple stamp on your own and you’re certainly smart enough to find the best deal. One thing I will say - it does make sense to have these people publish your FBN, because it’s one less step for you to worry about later. Just don’t pay more than you absolutely have to.
After this little transaction, you’ll have two very important pieces of information. The first is your purple stamped FBN filing and the other is your receipt for publication. All you need now is to convince your bank that when you present a check to them made out to Greg’s Awesome Avatars, that they’ll actually give you the money.
Off to the bank!
Step 4
At this point, you’ve saved over $100 by doing this yourself. You’re at the last step and you can just see those million dollar checks coming your way. But if you don’t have a bank account setup, those checks might as well be kindling.
Setting up a new bank account shouldn’t be that big of a hassle, especially if you already have a banking relationship with said bank. Go to the bank in the mid morning or mid afternoon. Chances are you’ll be seen by a new account rep much quicker.
It should take about an hour and when you’re done, you’ll have your very own bank account!
Congratulations! You own your own business and you’re on the road to profit!
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