It is every American’s dream. To own and operate their own business, to be their own boss, to be in charge of their life! Every new business is started by someone who gets an ‘entrepreneurial seizure’. That is, they believe they have an idea for a service or product that is better than, faster than and of better quality than what some others can do. In a fury, they quit a job and start their own business haphazardly and end up getting in a jam because they didn’t follow the natural order of beginning their own business. This article will explore what those steps are, and how, if they are done correctly will greatly benefit the one taking them.
I. Check your State’s Business Website for possible conflicts in naming your business.
When you choose a name for your business it should be unique, and yet say something about what you do. Some have chosen the route of using humor to get their point across. “The System’s Down” for a computer AC repair st cloud Florida business, “He’s Not Here” for a bar infamous for refusing to tell wives where their husbands’ are. What you don’t want to do is give your business the same or almost the same name as another company. Check the local sites and make sure you can legally use the name you choose.
II. Get your EIN number.
It’s as easy as logging on to the IRS.gov website and filling out the online form to receive your EIN instantly, don’t check the box to wait for it to come in the mail, you want to get started ASAP, so make sure you get the number and print the page it appears on. You will need that number before you finish any of the next steps.
III. Incorporate your business. (What forms you will need.)
In order to incorporate correctly, a lot of people have used online help. It’s not cheap, but it is far cheaper than the possibility of making a mistake and having to dissolve a new corporation and begin again. Unless you have done this before, you can leave it to the experts and skip a few of the next steps entirely. The next question is what kind of incorporation do you need? You have two choices for an incorporated business. There is the S-Corp, by far, the most popular option because of the taxation advantages. And then there is the C-Corp, which does have its own advantages which the double taxation drawback can sometimes more than makes up for. The other option is not incorporating at all and sticking with either a sole proprietorship or partnership. Both are easier to deal with at year end and cheaper to get taxes prepared but can leave the business owner open to getting personal property taken if there were a bankruptcy or lawsuit. In my humble opinion, the form of business with the most headaches is a partnership and the best form is the S-Corp. But that’s just my opinion.
IV. Create your Article’s of Incorporation.
The cheap way to do this is to cut and paste another corporations’ Article’s of Incorporation and replace their name with yours. You can do this legally, but as I am not a lawyer, I would take the safe road mentioned previously and get an expert to do it for me.
V. Create your company’s by-laws.
Let’s face it; before I started my own business, I wasn’t sure what someone would be looking for in a company’s bylaws. It basically spells out the days for board meetings and who will succeed who should there ever be a vacancy. Again, I would prefer to put something like this in the hands of someone who does it regularly as they will know who to ask what and put it together for you professionally. A lot of online services have popped up; make sure you deal with a reliable one if you go that route.
VI. Open your business bank account.
This is the step that most people START with. Then they learn that the business name they chose is taken, or that now they are incorporated, they need a different kind of bank account. The most important thing to remember with the business bank account is that it is supposed to forever be separate from your personal accounts. This is to protect the corporate veil, i.e. that layer of protection afforded to you in a potential lawsuit.
VII. Register with the state to pay for unemployment taxes, sales taxes, etc.
Each state will have its own site to pay taxes online, in Florida; before you register you are given a brief quiz about the kind of collecting you will do in your business. Are there vending machines involved or fuel subsidies? Etc. Most businesses will only have to worry about the SUTA or State Unemployment Tax. Paying online is important as the states are usually stricter than the federal in collections. Fines and penalties are what build a lot of bridges in this state.
VIII. Register with EFTPS to pay payroll taxes online.
Every pay day you have, you must set aside half of your employees’ payroll taxes out of your account and half deducted from your employee’s pay, along with the Federal Withholding. Using the online payment option at the EFTPS site means you won’t have to be sending checks that could get lost or late. Register now even if you don’t have employees yet and get your internet passwords written down.
IX. Build your company’s website.
These days a company without a website is not a company. Simply put, if you cannot point potential customers to a site featuring your work and some information about your business, those potential customers will go elsewhere. The internet today is what the Yellow Pages were 20 years ago. Often, if you get email, your internet provider will give you internet space for free. For example, EarthLink will give you a certain amount of space for free, and using the Trellis builder allows you to build, change, and update your site easily. Go to a hosting site, such as Go Daddy and pay for a redirect to your email free site. (Don’t pay for the hosting, just the redirect!)
X. READ articles on promoting your site through QuickBooks, Google, and Yahoo search engines.
I don’t know about you but my Yellow pages books are under my old couch, holding it up where the legs are uneven. When people are looking for services today, they use Google, Yahoo, or Craigslist. A lot of advertising can be done through your QuickBooks software by clicking on the Google Marketing Tools icon. Read all you can about successful people using these sites. It is not necessary to pay for a pay per click campaign when you use some FREE common sense steps to market your business to your clientele.
XI. Start your marketing campaign. (Business cards, postcards, etc)
If you are struggling to put together the green after paying to incorporate, etc you may not exactly have the ability to market your business with essentials. (Business Cards, Post Cards, Brochures, etc.) All of these can be found for reasonable prices online, I use Vistaprint as the specials they have with 250 free cards, 500 free postcards, etc have filled out my marketing ammo for nothing but shipping. I prefer not to use the Office big box stores as they don’t sell quantities less than 5000 and I took a while to find a professional design that worked for me, you will too, don’t worry about that.
XII. Build your clientele.
Remember that if you are following this step by step, you are still gainfully employed somewhere. You have to build a clientele slowly, possibly spending your first year as a part time corporate president, until you have enough regular clientele that you can comfortably ease up on your day job. Your clientele are more than just a source of immediate income, they have friends, relatives and neighbors that you don’t have. So on to the next step.
XIII. Ask your satisfied clientele for referrals.
A satisfied client can gloat on you; just make sure that you deliver the goods when they do. Then, you have two satisfied clients. Ask them to fill out referral forms so you can tap into their market and do the same for them as well.
XIV. Finally, as soon as the money is rolling in regularly quit your day job.
You didn’t start this business thinking that you want two jobs forever. As soon as you can pay your bills comfortably, and perhaps have somewhat of a surplus in your business account, fire your boss! Use the spare time you have now to promote your business and its’ services with the following tips.
1. Join a local chamber of commerce. – My membership at the Kissimmee chamber has paid for itself a hundredfold and more. Become an active participant and join a leads group. You will get more clients out of the relationships you make than you will in making a hundred sales pitches.
2. Join a BNI – like a chamber of commerce, just less formal.
3. Volunteer time (or services) at the local YMCA; sponsor a team with shirts or equipment.
4. Spend that extra time you have with family, because as busy as you may get, you want to have the joy of watching your kids grow. And if you don’t have any kids, spend that extra time in making yourself more successful by taking time OUT of business and reinvigorating yourself. Take classes, go to seminars and LEARN!
Success is not a goal for the future. It is a journey, doing something you love doing and getting paid for it. I’ve met many a wealthy person who would trade it all to take that risk they never took and enjoy their lives and work all the more. Good luck all of you.
David Roberts, CFE, CQBPA, MBA, lives in Kissimmee, Florida with his four girls, three dogs, two snakes and one wife. He has been a member of the Association of Certified Fraud Examiners for five years and has been studying fraud for longer than that. He is the owner of Homesoon Accounting Services which specializes in Quickbooks Consultations, Tax Prep, and Fraud Prevention and Detection.