Small Business Owners

[Dex]

Any small business owners out there? What advice would you give to someone just starting out? I'm keeping my steady well paying full time job until I gain enough clients and experience. I have very low overhead because I work from home and don't employ anyone else for now. Any information would be greatly appreciated. Thanks.

 

Also my mom is a CPA and she's helping me out as well.

 

EDIT: My mother is a degreed accountant but not a CPA. She has referred me to to her CPA.

[Paa Langfart]

Dont let your boss know.  He may see a conflict of interest and fire you.

[PandaPancake]

Keep business and personal finances separate. Keep good records. Photocopy receipts.

[sharkkiller]

I would suggest that if you are investing your own money, make it a loan to the business. Do all of the paperwork then set up a payment plan with interest. It will help keep you personal finances separate from the business. Don't just put money into the business without paper trail.

[Dex]

3 minutes ago, sharkkiller said:

I would suggest that if you are investing your own money, make it a loan to the business. Do all of the paperwork then set up a payment plan with interest. It will help keep you personal finances separate from the business. Don't just put money into the business without paper trail.

 

2 hours ago, PandaPancake said:

Keep business and personal finances separate. Keep good records. Photocopy receipts.

Two great posts and as I said my mom is a CPA and private bookkeeper so she has me squared away. I opened a business account with TD Bank and have a business credit card as well. I keep track of mileage for when I make business trips and keep all of my receipts in a bin for the end of the year. Fortunately I had the cash upfront to start the business and didn't need to take out a loan. Basically my overhead right now is $8 a month for my business checking account and what is costs to renew my domain and host my website.

[ladypanther]

What type of business?

[Dex]

1 hour ago, ladypanther said:

What type of business?

Video production and social media management.

[Anybodyhome]

I actually found a local city grant that paid for 50% of my start up costs specifically towards communications and tech. So I had a professional web design company design my web page, hosting and took care of the smart phone account as well. This was 6 years ago and the grant essentially took care of $1500 worth of work.

I also set up a PO Box for billing and mail purposes so I wouldn't have to publish my home address.

[SmokinwithWilly]

My rule of thumb is never let one client exceed 20% of your income. Big clients are great, but if you lose them it hurts... bad. Also, learn to shop for equipment at the rollover for new products. When I purchase equipment, I always wait until the new line comes out so I can get the last new big thing at 40% or less of previous retail with warranties in place.

Lastly, make sure that you set up your company with proper tax stuff in place. And don't listen to the IRS at all.  I consulted an IRS agent when I set up my business and they gave me the wrong information. When I went back to the IRS because the information with their letterhead on it, they told me I should have consulted a professional. Your mom being a CPA should help tremendously. 

The hardest thing for me to learn was how to say no. There will come a time when you can't take on every job no matter how much you want to. Be ready for it, and it won't be quite so bad.  

[PhillyB]

dex, i'm doing the same thing as you actually. i've been in the process of founding a media group for the past two months, a combination digital publishing company and a film production company, run as separate DBAs under the same LLC.

but yeah if you haven't already i would register as an LLC, especially if you have any kind of assets. if you drop knock someone's head off with a jib crane they'll only be able to sue you for the assets owned by the company, not by you personally, so they can't take your car or your house.

[Dex]

On 6/26/2016 at 7:25 PM, SmokinwithWilly said:

My rule of thumb is never let one client exceed 20% of your income. Big clients are great, but if you lose them it hurts... bad. Also, learn to shop for equipment at the rollover for new products. When I purchase equipment, I always wait until the new line comes out so I can get the last new big thing at 40% or less of previous retail with warranties in place.

Lastly, make sure that you set up your company with proper tax stuff in place. And don't listen to the IRS at all.  I consulted an IRS agent when I set up my business and they gave me the wrong information. When I went back to the IRS because the information with their letterhead on it, they told me I should have consulted a professional. Your mom being a CPA should help tremendously. 

The hardest thing for me to learn was how to say no. There will come a time when you can't take on every job no matter how much you want to. Be ready for it, and it won't be quite so bad.  

I'll still be working at my current full time job until I'm ready to go off on my own. I make good money and my company health insurance is cheap. I'm also saving for a house with my girlfriend so I see myself building my business over the next year while also staying at my full time job. It will make it tough but I feel like its the responsible thing to do.

[h0llywood]

#1 thing I've learned sounds so cliche but don't trust anybody. Relationships are important but when it comes to money, people can be shady and heartless mothers fugers. Look out for yourself. You are your own fiduciary.

Get a box from a CMRA (commercial mail receiving agency) or shipping place as opposed to a PO Box. You can lease one for around $200 a year. You can get a physical address with a "suite" number instead of a PO Box. This makes you look more established than competitors with PO Boxes to some clients. Find a CMRA in your neighborhood or preferably not too far.

If you get into a partnership, make sure you document everything. I mean everything. No offense, I would even write a contract with your mother. CYA.

Invest in an awesome business card and website. Say goodbye to geocities and use a modern touch to identify with your target market. 

Plan for growth. Yeah it's nice to get new clients but how can you handle the growth without people to do the work? 

Constant contact or some sort of mass marketing. 

Be a professional. Don't sound like an amateur or like you just opened last week (even if it's true). Convey confidence and if not fake it til you make it. 

Depending on how you invoice, get prepayments/deposits, have them sign a contract and have a credit card on file should they fail to pay. Starting out, you don't want to get hosed. 

Establish your accounting policies/terms for AR/AP. DOR, net 10, 30, 60. 

CASH FLOW WILL MAKE OR BREAK YOU 

And I think that's it for now. Go Lakers.

[pantherfan49]

Nice tips in this thread.

Don't agree with the "never let anyone be more than 20% of your revenue" statement.  Sure, I'd like to avoid that too but I'm not going to tell my bigger clients to go away.  And sometimes a small client grows to be a big one.  The way to minimize your risk is to continue growing the business to make the pie bigger. 

Presentation is everything.  A good website with good SEO goes a long way.

And responsiveness, particularly in the initial engagement is key.  When a new client reaches out to you, you best get back to them within the hour.  No kidding. 

As Big Cat indicated, being a business owner is rarely a 9-5 job.  And you have to do just about everything. 

Be prepared for some nasty tax consequences.  You will be paying many of the taxes that your employer pays now and you will get a chance to see just how much the Feds tax from you. 

 

[Dex]

49 minutes ago, pantherfan49 said:

Nice tips in this thread.

Don't agree with the "never let anyone be more than 20% of your revenue" statement.  Sure, I'd like to avoid that too but I'm not going to tell my bigger clients to go away.  And sometimes a small client grows to be a big one.  The way to minimize your risk is to continue growing the business to make the pie bigger. 

Presentation is everything.  A good website with good SEO goes a long way.

And responsiveness, particularly in the initial engagement is key.  When a new client reaches out to you, you best get back to them within the hour.  No kidding. 

As Big Cat indicated, being a business owner is rarely a 9-5 job.  And you have to do just about everything. 

Be prepared for some nasty tax consequences.  You will be paying many of the taxes that your employer pays now and you will get a chance to see just how much the Feds tax from you. 

 

You should think small business owners get tax breaks. Murica.