11 Things You Should Know About Starting Your Own Business
When I left a full-time position to work as a freelancer, I took it seriously. I immediately filed for an LLC and signed up for Quikbooks. I remember a friend’s husband being surprised that I went so hard right out of the gate, but I tend to do things all the way or not at all.
After a year of owning my own business, there are 11 important things I wish I would have known. I want you to know them rather than learn the hard way; although, you’ll learn plenty of other things the hard way.
1. Find a solid accountant.
Do not pass Go and do not collect $200. Go straight to an accountant. Ask freelancer friends for their recommendations or hell just Yelp it. It’s annoying, no one likes calling around for a money professional, but it would have saved me something like 25 hours of now unbillable time. S/he will tell you how to setup your business account, when you need to file taxes, how to keep yourself in order so that when tax season hits you aren’t crying in a litter of checks, account statements and invoice reports.
Ask her/his advice on: what kind of business to open (LLC, S Corp, C Corp?), and whether you can open an IRA (savings plan) or if it should be a SEP (Single Employer Plan) to save $$ for your retirement. No one’s offering you a 401k anymore darling!
2. Ask your friends for a nice, reputable lawyer.
S/he will file for your LLC or whatever kind of business you choose to open.
3. You have to pay quarterly taxes.
There isn’t an option to just pay a huge sum of money at the end of the year, like I thought. How do you figure out your quarterly taxes? Ask your accountant! Or, estimate 25% of your income for the quarter and send to the federal government. And hey, don’t forget about those state taxes.
a. Note: If you Google it. It will come. There’s a form to fill out with your federal and state taxes. Just Google it.
4. Rectify your business account monthly, but mark invoices as paid as soon as you get a payment.
I attempted to let Quikbooks rectify my accounts for me by connecting my business checking account with the online software, but I only decided to do that about 3 months in. Guess whose account ledger was a mess? MINE. I spent about 18 hours trying to sort through and make my Quikbooks perfectly match my bank account, but I never did.
What I know now is that I should just take the responsibility on myself and at the end of every month, make sure my Quikbooks matches my bank statement. (Or, I have a friend who pays someone to do just that every month. Whatever works for you!)
5. For the love of God, buy folders.
Even if it’s just 4. Mark one for incoming checks, outgoing checks, insurance and business documents (like your EIN number).
6. Get a printer with a scanner.
It’s been a year since I made the decision that no one needs printers anymore and I’ve spent the entire time in regret. You’ll need it for tax stuff, expense reports, and whole host of other things. I have to rely on the kindness of friends and family. Don’t be like me.
7. There’s an extra permit for businesses out there – at least for Ohio. You can ask your lawyer about that, too.
8. You will get too busy to take care of your annoying paperwork and fixing your site. Do it now while you’re a little slow. You’ll praise yourself later.
9. Buy the best insurance you can afford.
I’ve always thought of myself as healthy. What I didn’t consider was those ails and aches that turn into two doctor visits, and a random ER run because Urgent Care won’t admit you. I spent 7 months fighting with my insurance company to cover a bill. I lost about 20 hours just to waiting on hold. Find good insurance and triple check that your doctor is covered before you even make an appointment.
10. Your W9 matters.
Figure out if you’re really an S Corp or a C Corp and make sure your EIN number is perfect. Check it twice and don’t be afraid to ask your lawyer. Conversely, don’t be afraid to tell a client if you’ve made a mistake.
11. Beware the scams.
Once you have your business address out in the world, many a person will mail you things saying you need to pay them money for something (a permit maybe). If Googling the sender doesn’t help, call your lawyer. You have one already right? Now use her/his help!