Starting your own business is both exciting and scary. Maybe you have a great idea or maybe you’re tired of the daily grind at your 9-5 job and are ready to do things on your own. Whatever the reason, there’s a lot to think about when starting your first business, but don’t worry! I’ve broken it down into five steps that you can follow.
Make a Plan.
No matter how small you think your business is, create a business plan. It will be your roadmap that helps you stay on track and keep things organized, even when the going gets tough.
Below are some questions to ask yourself as you draft your plan:
- What is the goal of your business?
- Who is your target audience
- Does your product/service solve any issues for certain people? If so, be specific
- What makes you different?
- What is your mission statement?
- What makes you/your business stand out?
- What are the objectives of your business?
- Will you want/need employees or contractors?
- Where will you be working? From home? In an office?
- Will you need supplies, if so, how much are they and do you have a supplier?
- What business expenses do you know and/or expect to have (software, website, advertising, etc.)?
- What services/products are you selling and for what price?
- Did you create a financial plan?
- Do you have a budget?
Make it legal.
The first thing you’ll need to do is make sure your business is legal. To do that, you’ll want to register your business with the state and the IRS, file paperwork with the county clerk’s office, and possibly even get registered with local government.
If you choose to be a sole-proprietor, you don’t need to file anything with the federal government, but some state and city governments do require that you tell them! (A lot of people forget about needing to inform cities, though each city has different rules so look on your city website!) If you are using your own name, you do not need a DBA (Doing Business As). If you want a business name different from your legal name, you will need to get a DBA, even as a sole proprietor.
Though not required for sole-proprietors, I recommend everyone getting an EIN. I say this because you will need to give a SSN or EIN to anyone who contracts you and makes you fill out a W-9. Not everyone is careful with these documents, and your SSN will be floating around. Get an EIN number so you know your SSN is safe.
If you choose to be an LLC, note that you will be taxed as a sole proprietor unless you submit paperwork to be taxed as an S or C-corp.
Get your finances in order.
Finance is the foundation of any business: you need to figure out how to pay your bills and get your business off the ground. Here’s what you should do:
- Get a business bank account & credit card. Setting up a separate bank account for your company will make it easier to track expenses and get paid, and if you’re an LLC/corporation, is also very important so that you do not “co-mingle” funds. The credit card is great to put all expenses on as it offers more protection than a checking account and also gives you the chance to get cash back or rewards points, just ensure you pay it off on time 🙂 It also helps if you ever have an issue with taxes or audits, since this makes it clear that everything related to the business is separate from personal finances and can help prove that all tax rules have been followed (which ensures better chances of avoiding fees).
- Savings account: Open up a designated savings account so that you can put money aside for taxes. If you will owe more than $1k in taxes at the end of the year it is important to pay estimated taxes throughout the year.
- Figure out how you want to track your income & expenses. Starting with a spreadsheet or software. QuickBooks Simple Start is a great option to begin with, but if you are not expecting much income in the first months/years, a spreadsheet works just as well. Here is a free one that you can use to get started.
- Keep important paperwork in order. File everything from your articles of incorporation and invoices to tax documents in a file or folder labeled appropriately so that you can easily find what you need when it comes time for filing taxes or issuing invoices.
- Store all relevant information in one place (like Google Drive)
- Create an email account specifically for your business so no important emails get lost
- Use a calendar. Don’t let your plans and tasks slip between the cracks.
- Use a time management system like Todoist, Wunderlist, or Trello to keep track of what needs to be done when it needs to be done by—and do it!
- Figure out a workflow that works for you and your business. Workflows for new clients, new contractors, billing, etc. are great to put into place NOW. For all liability agreements, contracts/agreements, etc. I love to use Dubsado as I can automate this how I want.
- Think of branding colors/font you want to use for your company
- Create a website to market what you are selling. I started with SquareSpace but switched over to Showit (and LOVE it!). You can find a referral code here.
- Set-up SEO. It doesn’t have to be perfect from the get-go, you can always make it better.
- Want to be on social media? Create an instagram, facebook, tiktok, or whatever platform you are passionate about or interested in.
I hope these 5 tips help you get started! Owning and running a side business/small business is so rewarding, but can also be a bit overwhelming, so please reach out if you have any questions and/or would like to book a strategy call with me to go over anything.
Hey, I'm Lotte, and welcome to my blog, She Means Business.
I'm an expert bookkeeper and business/operations manager who loves supporting female entrepreneurs so they get their time back. Over the past 5 years I've supported dozens of women through my services, and I hope this blog can help you. Browse & Enjoy!