What does it mean to be a sole proprietor?

So, you’ve decided to give it a go. You’re pulling the trigger. You are ready to go from idea to a real business.

There are steps you should take if you are going to conduct business, on your own, as a sole proprietor. I know I mentioned before that you don’t have to register or file an application to be a sole proprietor, which is true.

But, in order to work with banks and have a business checking account, you’ll want to file for what’s generally called a DBA, or “Doing Business As” name for your business. You’ll do this at the County Clerk or County Registrar’s office.

Before you go to do this, you get to do one of the fun things in your journey… come up with a name for your business.

From a branding perspective, try to choose a name that communicates what you do and will resonate with your potential customers. You need to come up with multiple options, in case your name conflicts with a previously registered business. Once you have a couple of ideas for your business name written down, either jump in the car and head down to the County Registrar or go online to your County Clerk’s website to register that business name so that you can start “Doing Business As”.

In Texas you are filing an Assumed Name Application/DBA. In other states this may be called a ‘Fictitious Name’, ‘Assumed Name’ or ‘Trade Name’. But they all mean the same thing. The Assumed Name filing simply provides documentation that you are doing business and you intend to make financial transactions under the assumed name filed, not under your personal name.

Depending on the county or state you live in, this can be as simple as a form that you fill out and pay a small filing fee. I live in Dallas County and here you are provided a workstation and instructions on how to search all current business names and make sure that no one else is using your proposed business name. If your county provides this search online, you can determine if your name is available before you go to the Clerk’s office.

Whatever you do, don’t try to accomplish this step at 4PM on a Friday afternoon. Make sure you have plenty of time to go through all the steps required by the County or State Registrar/Clerk.

With your Assumed Name/DBA Application submitted and accepted by the County, you now have a legal document that states who you are and the name you are doing business under. With that document you can provide it to the bank and you will be able to open a business checking account and conduct business as ‘Your Name’ doing business as ‘Your company name’. You will use your DBA name on all business documents and in all advertising, marketing and branding activities.

Remember, keep track of the cost of filing your DBA and any other costs incurred, as these all count as expenses for your business. From this point on make sure that all business transactions should take place in your business bank account.

Now you are starting your business the right way with a business bank account separate from your personal account, allowing you to use this new business account to easily keep track of ALL of your business transactions and allow you to promote your business name, not your personal name.