The fortune of America is built through the unbroken efforts of different sets of people including entrepreneurs and immigrants. Immigration provides America with the best of the best from around the world coming to the country to seek freedom and in exchange contribute to its growth. America provides for both residents and non-resident foreign nationals to start a business with relevant types of visa.
Though, because of influx of immigrants into the United States, the country does not lack new ideas to grow its economy and social life for the good of everyone; this is why starting a business in the US is highly regulated. However, there are different ways you can start a business as an immigrant, especially if you are so inclined.
The goal of this discussion is informing you on what to do to start a successful business in the U.S. as an immigrant and also to let you know your limitations to guide going contrary to the law as a budding American. By immigrant, I am referring to someone having relevant documents to live in the US, not on a temporary basis which gives that person the privilege to do business or to work in the country. If you are on a temporary, non-immigrant visa, please upgrade your immigration status before considering going into business otherwise you might have to choose to do business as a non-resident which does not allow you to earn a salary in the U.S.
Having said that; let’s start you on how you can start a business; I will conclude with tips on finance options for your startup and discuss some limitations to watch out for in your entrepreneurial journey.
What you need to start a business as an immigrant in America?
Many immigrants are interested in knowing if they can start a business in the U.S. and my findings show that the country allows you to do that. In fact, starting a business in America for immigrants is not different than what a citizen needs to do if they are starting a business. It is often said that the best and fastest way to obtain your green card in the U.S. is to start a business.
By starting a business, you are contributing to the country’s economy more than you are doing as an employee; here are the steps you need to take to start a business in America:
Research and decide on the type of business you want to start. Before starting a business, you need to identify a market gap and conduct thorough research to make sure it is worth investing time and money on doing.
1. Determine your business’s legal structure. The legal structure of your company has more than meets the eye because it will be the basis of your relationship with the law and the economy. Do you want a sole proprietorship, a partnership, an LLC, a corporation or a C corporation, etc., type of business?
2. Register a business name. Before you register a business name, you need to decide the state you want to domicile your business and remember that different states do have certain benefits that can help your business both in short and long-term. Once you decided the location of your business, you can register a business name. Don’t worry, filing in a state does not limit you in any way, you can do business anywhere in the U.S. if you want, but the State you choose can mean a significant difference in your taxation and other perks for your survival as a startup.
3. Get your Tax Identification Number (TIN). Before you can do anything after registering your business name, you need a TIN from IRS which is required to open a bank account and transact other businesses relating to your new company.
4. Get a business office. If your type of business needs a physical location, take time to find the right place for your business to nest. You are free to use your residential address as a contact if your service runs a virtual operation but only needs a physical address for contact sake.
5. Register with local and state tax bodies. The opportunity to generate income through taxes is what makes a business a high priority for any government; you need to register your business with the local and state taxes authorities as a legal requirement for running a business in the U.S.
6. Register for business licenses and permits. The type of business you intend to offer will determine the trade license and permits to obtain. If you are starting an African restaurant, you need appropriate trade license and business permits in your locality to run the business. Your business registration notwithstanding, you cannot start a business unless you obtain local permit and trade license.
7. Build your business management system. Your business success depends on how you manage it which includes defining employee responsibilities, business financing, compensation, and insurance plan according to the requirements of the law.
The above is all you need to start a business; however, financing your business is another challenge you need to overcome. Here are tips of finance options to consider:
Tips on finance option for startup
There are dozens of finance options for startups, but I will tip you on a few I know won’t come with headaches; I hope you will find them interesting.
Your fund as an investor is the most important option you have to kick-start your business. No matter how brilliant your business ideal and model is, you will hardly find anyone to invest in you unless you foot the initial bills of giving reality to your business. Your savings can come by planning ahead and put aside some funds for your business take off.
Family and friends
No matter how bad, there will be one or two people around you who will believe in your idea and be ready to invest in you. With your savings leading the way to show people what you can do, your family and friends are the best next funding source to explore. If you have done your business plan correctly and know how much you need, do a small business presentation to discuss with trusted relations for funding.
For a short-term funding need, you can use a third-party finance option such as kickstarter.com to raise funds for your business. This will require you to set your financing goal and state how much you need to raise and when you need it and get close relations friends and family to pledge support. This is a project based funding and may help you to keep going in business.
Getting finance from angel investor can be a relief if you succeed because they invest in your business for equity stake; meaning they will own part of your business. But mind you, they are not doing this for profit, but to get you started because they believe in your vision and business idea. The challenge for you is finding one and convincing them you are worth their investment.
Small business loan
There are business friendly institutions like Small Business administration (SBA) or financial institution small business desk who offer loan facilities to startups. You need to find such resources and understand the procedure to apply for a small business loan.
Credit card/bank loan
You need caution using this option. However, it can be a source of quick financial intervention when you are facing a business deadline and need funding twice as fast. You must be ready to abide by their long list of conditions and make sure to pay back more quickly too to build your creditworthiness.
Limitations to watch out for as a business owner in America
Running a business is not a tea party; you have a plethora of legal issues and decisions to make from time to time which without you risk a faceoff with the law. Here are five crucial challenges to overcome to survive in the U.S. business terrain:
Licensing and permits
Obtaining proper license and permits are legal requirements, and it is your duty as a business to find out what documents to get according to business laws in your location. You can find out this information from the business office in your local and state government.
While it is your right to hire and fire, you need to do it right. Otherwise, you may land in problems you never imagined possible. The right thing to do to address this is to, clearly, spell out terms of employment and disciplinary actions you can take; work with your attorney to develop the terms of engagement and have your employees acknowledge it by signing relevant acceptance papers that will save you from litigation if you have to fire upon violation.
When hiring staff, make sure you employ only people with the legal document to work in the U.S.; under no circumstance must you offer employment to people without clearance to work as represented by work permit visa of various types provided to non-US citizens to work in America. Remember, it is your responsibility to conduct independent background check on each staff to employ beyond the papers they present to you. If you failed to do this, the US immigration is in the habit of conducting surprise immigration audit, don’t be found wanting!
Proper business accounting
Even though it’s your business, you need to keep an appropriate record of the transaction for accounting purposes. Proper bookkeeping and accounting will save you from tax complications when your business book is scrutinized.
Make sure to follow national employment guideline when hiring your employee and don’t get caught in issues relating to sexual harassment, age discrimination, and ethnicity bias. If you are found wanting in any of these issues may get you into serious trouble in the U.S.
Mikhail is a content creator, a digital marketer, and an entrepreneur. He studied Political Science at the University of Ilorin Nigeria.