Setting up your MITS Business

Congratulations on your new MITS business and welcome to the wonderful world of being your own boss! This guide contains some common steps to set up your new business. In the weeks before or after your MITS training, please work to complete these tasks.

You do NOT need to obtain a business phone or business email, create your Google Business Profile or any other business listings, create social media accounts, set up QuickBooks, or start your website. We are working on that for you or will provide instructions on how to do certain items at the appropriate time.

Note:  Nothing in this article should be construed as legal or tax advice. Before starting any steps in this article, we recommend that you speak with your attorney, tax advisor, and other professionals who can guide you through this process. There may be other steps not listed in this article that may be required in your specific territory to begin operations.

1. Understand our naming conventions.

(Estimated time < 10 mins)

Each of the following names can match or be different. All names except your ‘Territory ID and Territory  Name’ are defined by you.

Territory ID and Territory Name: We define this for you so that we have uniformity across all our franchise locations.

Legal Entity Name: This is the name of the organization you form under the laws of a federal, state, or provincial government. It must not match your Territory Name or DBA Name.  For more information on how to select a legal structure for your business, please refer to Step 2 below.

IMPORTANT:  Please do NOT register a Legal Entity Name that includes any part of our trademarked name or branded marks.  For example, you can set up your LLC as ‘John Smith’s Blind Ventures LLC” (or any name of your choosing), but you may not register it as “Made in the Shade of ABC, LLC”.  This is standard franchise law.  You should, however, use our trademarked name in your DBA Name.

DBA Name: This ‘Doing Business As’ name is what will be visible to the public. It should be different from your Legal Entity Name as it can include our trademarked name and branded marks, whereas the Legal Entity Name must not.

Domain Name: This name will serve as the address for your website (i.e. www.mitslocation.com) and email (i.e. info@mitslocation.com).

2. Choose a legal structure for your business.

(Estimated time < 2 weeks)

There are several types of legal structures to choose from, and while the following list is not exhaustive, it contains the most common forms of ownership of our franchisees.

• Sole proprietorship – an unincorporated business with only one owner. While this is the easiest structure to establish since it is not registered with the government, a significant disadvantage is that it does not protect from personal liability. This means that all liabilities extend from the business to the owner.
• Partnership – this structure is similar to a sole proprietorship but has multiple owners. Generally, a partnership does not protect from personal liability. However, there are certain forms of partnerships available such as limited partnerships which may offer personal liability protection for some partners and would need to be registered with your state or provincial government.
• Limited liability company (LLC) - a business structure in the U.S. that protects its owners from personal liability. This hybrid structure combines certain characteristics of a corporation with those of a partnership or sole proprietorship.
• Corporation - a legal entity that is separate and distinct from its owners. Under the law, corporations possess many of the same rights and responsibilities as individuals. This structure protects its owners from personal liability.

The majority of our franchisees are set up as Limited Liabilities Companies (LLCs), but there are reasons why other structures might be better suited for your unique needs.

Note: Please consult your attorney before selecting as this choice has important consequences.

3. Choose a tax structure for your business. 

(Estimated time < 4 hours)

There are different ways each of the entities described in Step 1 will be taxed:

• Disregarded pass-through entities (sole proprietorships, single-member LLCs, and qualified joint ventures) - these will not require a separate federal income tax return for your business and all profits and losses are passed through to your personal return.
• Separate pass-through entities (partnerships, multi-member LLCs, and S-Corps) - these will require a separate federal income tax return for the business, and all profits and losses are passed through to your personal return.
• Separate non-pass-through entities (C-Corps) - these will require a separate federal income tax return for the business and the business will be subject to corporate income tax.

A note on S-Corporation status – you may notice that S-Corp is not a legal entity in Step 1. Instead, it is a tax status that must be elected. A corporation can file Form 2553 to elect to be treated as an S-Corp for federal income tax purposes. An LLC, partnership, and other eligible entities must first file Form 8832 to be classified as a corporation and then file Form 2553 to make the S-Corp election.

Please consult your tax advisor before deciding on your business' tax structure.

4. Register your DBA Name (“Doing Business As”).

(Estimated time < 4 hours)

Also known as an ‘Assumed Name’ or ‘Fictitious Name’, a DBA will need to be registered with your state or provincial government. This DBA name will be visible to the public, but you will use the Entity Name of your business on all government forms and vendor applications.

If you selected a sole proprietorship as your legal structure, your business will be your given name (i.e. John Smith). If you want to operate under a different name, you may have to file a “fictitious name” or DBA (doing-business-as) registration form with your government agency. For example, if John Smith is a sole proprietor window-covering dealer and advertises his business as “Made in the Shade of ABC”, he would need to file a DBA form.

If you selected a partnership, LLC, or corporation as your legal structure, you will also need to file a DBA form to include our trademarked name or branded marks in your DBA Name. For example, you would need to register your DBA name as “Made in the Shade of ABC” if your entity name was John Smith’s Blind Ventures, LLC.

Note: Registering a DBA name will likely require a form filed with your state or provincial government. There are a few states, however, that do not require registration of a DBA name.

5. Apply for an Employer Identification Number (EIN).

(Estimated time < 30 mins)

An EIN or tax ID can be applied for with the IRS. An EIN is not technically required for sole proprietorships or single-member LLCs that do not have employees and are viewed as a disregarded entity, but it is still recommended that you obtain one. Otherwise, your social security number would need to be used on forms and other paperwork, which could be a security risk. An EIN will make it easier to open a business bank account and it will help keep your social security number private.

6.  Open a business checking account and business credit card.

This will help you separate business from personal finances, help maintain liability protection, help your business build a credit history, and allow for tax processes.   The requirements to open accounts varies by the bank you choose, but you will likely need your EIN, business registration documents, and personal identification.

7. Get set up with sales tax agencies.

(Estimated time < 2 hours)

If you are selling a retail product or providing a service subject to sales tax by your state, city, or county, you may need to collect sales tax, report it, and remit it to the appropriate government agency. All states except Alaska, Delaware, Montana, New Hampshire, and Oregon have a sales tax. However, many local governments in Alaska have their own local sales taxes, and the other four states impose sales-type taxes on specific transactions.

If your sales are in some way taxable to the end user, you will need what is variously called a “seller’s permit,” “certificate of authority,” or “resale license” issued by the sales tax agency in your jurisdiction. With this permit, you will be able to buy items you resell from wholesalers without paying sales tax. The sales tax would instead be collected when sold to the end user, if applicable.  

Note:  You may be required to provide a tax-exempt resale certificate when setting up your vendor accounts (next step).  

8. Set up your vendor accounts.

(Estimated time < 4 hours)

If you have not submitted all your vendor account applications, please do not delay! Your account is automatically approved as a new MITS dealer. The only individual consideration will be your credit terms. You will be charged sales tax until your resale tax permit is filed with each vendor, so as soon as you are assigned this permit number, please notify your vendors. 

IMPORTANT: Keep in mind that some of our vendors will not begin shipping samples until your account application is submitted and a new account is in place. If you delay submitting your application, your sample shipment might also be delayed! 

**Note: Make sure to use your LEGAL ENTITY NAME as your company name on every vendor application to ensure you are under the umbrella of our deep discounts. 

9. Obtain business licenses and permits.

(Estimated time < 4 hours)

Some states/provinces also require a business license or specific permits issued on the local, state, or even federal level. Your state, city, or county offices will be able to point you in the right direction. Here are some common permits that may be required for home businesses:

• General licenses
• Tax permits
• Occupational permit
• Zoning permit

10. Set up your office. 

(Estimated time < 1 week)

Although not required, we recommend getting a non-residential office established for better visibility online.  Some online business profiles may not let you list a residential address as your address online, and instead may only let you list a service area.  Whether operating from a commercial location or your home, you will still need to obtain office furniture and equipment to help you run the business efficiently once you open.

11. Obtain required insurance policies.

You need to have a general liability policy to cover from claims of bodily injury, property damage, personal injury, and other claims (specific requirements are below). You will get asked for proof of insurance mostly by commercial clients and general contractors as a request for a COI. The request is usually to be added as a certificate holder on the policy and the insurance agent (or you logging in to your account), will have the ability to add them on the policy with their information being on the certificate of insurance.

Specific insurance requirements

We require our franchisees to maintain the following coverages, and specific amounts required can be found in our current FDD:

• general liability insurance,
• umbrella liability, 
• general casualty insurance covering the full replacement cost of your vehicle, and
• employment practices liability insurance

This coverage must protect both Franchisee and Franchisor, and their officers, directors, partners, and employees, consultants, attorneys, and agents against any claims for loss, liability, personal injury, death, property damage, or any expense whatsoever arising out of or occurring upon or in connection with the Business. You may obtain additional insurance coverage as you feel necessary or as required by the laws in your area. You may purchase your insurance from any carrier rated A- or better subject to our approval, not to be unreasonably withheld. We must be named as an additional insured under each policy that we require, and you must provide us with proof of insurance that evidences the required coverage.

12. Keep an eye out for updates from Home Office Support.

We will continue to work with you through the entire onboarding process. As you are working through the steps above, we will be reaching out to you as our internal onboarding tasks are complete.  Specifically, we will be working behind the scenes to set up the following:  

• Microsoft 365 Business Standard - email and other Microsoft Office collaboration apps (for owners only, all other staff at your location will get Exchange Online licenses).
• Canva - our online graphic design tool to manage our brand materials.
• Website - a new design focused on SEO with form submissions, calendar integrations, blogs, and pages dedicated to you and your territory.
• Online business listings - Google Business Profile plus 25 other listings set up
• A request for a biography that will help us post about your new franchise and increase awareness of your new online business listings.
• QuickBooks - accounting software with custom chart of accounts, products and services specific to our industry, automated sales tax, and optional full-service bookkeeping provided by our Home Office.
• Other platforms and tools coming soon!

Final Word: Setting up your home office for your new MITS business is not as daunting a task as it might seem! As you progress through these steps, you will be well on your way to an organized, smooth-running business operation! Welcome to our Made in the Shade family! We wish you tremendous success in all your endeavors, as we pledge our support every step of the way!