Dear Ney Ney,
Now you understand how to decide on a business, understand the steps to start a business, and have an idea and a plan for your business. Before we talk about what you do inside your business I wanted to talk a little more about how you start your business.
The most important part of starting your business is just that, starting it. Many, many people plan and plan and plan their business, but never start it. It is good to have a plan and think about the things i have written about, but the most important thing you can do is to take action. The faster you can offer your service or build your product, get feedback on it from customers, and improve it, the better it will be and the faster it will grow.
What action to take depends on what kind of a business you decide to start. If you are creating a software product, then you probably need to either sit down and create the product yourself, or work with someone to build it for you. If you are starting a lawn care business you might need to go buy a lawnmower and some tools.
No matter what kind of business you are working in, advertising and sales is the biggest step you should take to get started. The easiest way to do this is to reach back out to the people you talked to when you were developing your idea and see if they are interested in becoming a customer. Often times you might offer them a discount for being an early client.
***The below portion of this blog post is about legal and tax ramifications related to starting a business. This is for informational purposes only in order to provide some additional background. I am not a lawyer or CPA, and you should seek advice and counsel from qualified professional lawyers and CPAs before making any decisions related to starting a business***
Many people worry about what type of entity, or structure, they should use to form their company. This means telling the government how they should test your business when it comes to who is responsible for what it does and how it should charge you and the business taxes. Some business entities are corporations, limited liability corporations (LLCs), and sole proprietorships.
When you form an entity, you are telling the government to look at your business as something separate from you. This can help protect you if a customer is upset with your service or product, or claims your product hurt them. When this happens, the person might go to the government and complain through a process called a lawsuit. Usually, but not always, the judge who reviews the complaint will punish the business, but not you.
Different entities also are treated differently when it comes to paying taxes. Corporations usually are taxed as if they are separate from you, and then you pay taxes on the money they pay you. Often with LLCs you don’t pay a corporate tax like a corporation, but do pay taxes on any money you personally receive.
A sole proprietorship means that you are operating your business in your name, without any of the legal or tax benefits that an entity may provide. It is easiest to start as a sole proprietorship for a small business and then form an entity if your business starts to grow, but only you, with the help of a lawyer and certified public accountant, can make that decision.
So, stop overthinking things and get started today!
I love you,
Dad
