First off, can I say how awesome you guys are for the support of my new podcast ‘We All Have One’?! From the outpouring of love on our Instagram account to the review section, I TRULY TRULY appreciate it! Please keep the reviews coming (here) if you haven’t left one already because it helps us climb the ranks on the podcast lists and means exciting things for the future of the show!
If you hadn’t heard that I started a podcast, well…I did…and I’m freaking EXCITED about it! You can learn more about it here but The ‘We All Have One’ is a podcast that isn’t afraid to discuss the stories we all have – even the really messy ones. From business ideas to overbearing-in-laws to dreams of leaving your uninspiring job, come along for epic stories alongside tangible advice for succeeding and surviving through life’s unfiltered moments.
Episode 1 was all about starting a business and determining a business from a hobby (which is damn hard to do – but I got you). You can listen to that show here or read the blog post on it here, but today’s post is all about Episode Number 2, baby.
Ahhh yes, Episode 2 is still talking about starting a business but we’re getting INTO it in this one. Literally any dude on the street can decide he wants to start a business, but actually GETTING STARTED is a whole other story. There are laws, budgets, insurance, crises, payroll, and about a million other things to think about – well, if you’re smart about it. You also need to figure out your salary – and there’s a really awesome exercise that will help you do this on the show!
I’ve seen one too many businesses end up failing because they didn’t start strong bones of a business. They didn’t take the time to get processes in place before jumping in, and ultimately that can kill your company (and your sanity, hopes and dreams).
So start dem processes, people! And I know you’re probably a little freaked out – it’s OK. You should be. It’s a lot. And I’m here to walk you through it in Episode 2.
Since this episode does get a bit technical, I wanted to cover some details in blog format, too. This way after listening you can jump back here and reference what you need. Also, please know that a lot of the nitty gritty will need to be done on your own time. What I mean by that is talking to professionals who kick ass at the stuff we’re chatting about (accountants, payroll companies, insurance agents, etc.).
I’m giving you a very broad overview here so that you don’t go into business blind. It’s up to you to get the pieces in place from here. You’ve got this!
I share my (unaffiliated) love for ADP in this show but wanted to link it for you guys here, too. I’ve used them for 15+ and they rock for payroll. Reach out to them and they can get you started and walk you through everything. (Other options: Intuit or Gusto)
Tip: Avoid using cash and instead make sure you run all transactions through the checking account or a company credit card. This will give you an easy electronic record of every transaction. Also, don’t hand over access to your bank accounts; you need to review every transaction going in and out. I would do this every morning so the transactions were recent and easy to ask someone about. If you wait and do this monthly or quarterly often individuals won’t be able to recall specific transactions easily, it also might be too late and a real problem could have started.
In the show, I talk about 3 types of business classifications (LLC, sole proprietor, and S Corp). A lawyer or CPA can guide you here, but this resource from the IRS is awesome for doing some of the legwork yourself. You’ll find that as a biz owner, you have to figure out so much shit on your own, so this is a good place to start.
It’ll be different for everyone, but most businesses are very simple and most are sole proprietorships.
The easiest way to get into business is as a sole proprietor. A sole proprietor doesn’t have any partners to worry about, nor a corporate identity to hide behind. As a sole proprietor, is just you. If a lawsuit comes your direction, you face the liability. Under a sole proprietorship, profits from the business and your personal income are treated the same by the IRS.
A partnership is a totally different in terms of operations, but from the point of view of the IRS they are practically the same. Any profit generated through a partnership is treated as personal income.
A limited liability company (LLC) cannot be a sole proprietor, but an individual can do business as an LLC. If you are a sole proprietor, you own and operate your own business, but it is not a corporation. A limited liability company is a business structure that is not a corporation and not a sole proprietorship, it has members.
While we’re on the topic of registering as an LLC, I recently had to do this and used this service which was fan-freaking-tastic. It literally took 20 minutes and it holds your hand through the entire process AND sets you up with a FEIN number (which a lawyer will charge you $$$$ to do). The minimal fee you pay for this service is definitely cheaper than a lawyer, lemme tell ya. The service also has a super user-friendly way to make sure you stay compliant with annual paperwork and ya, definitely check it out if you’re needing to register your company.
Bottom line: Consider the type of business you’ll be building, what kind of assets you have, how risky you want to be (pro tip: don’t be risky in serious stuff involving the IRS or legal action), etc. Again, head here to start learning more about what type of licensing you may need.
If you take anything from this show, I hope you take this: YOU NEED FREAKING BUSINESS INSURANCE. Yes, you with that tini tiny store. Yes, you who thinks you can get by without you. Ya can’t! Or you’ll be sorry once shit hits the fan or something crazy happens and you’re out of business because you don’t have insurance.
It’s a hefty fee, I totallyyyy get it, but it’s crucial to the longevity of your company.
Before choosing a claim off the internet or billboard, do your research. PLEASE DO YOUR RESEARCH. Just like it’s important to find a doctor that you jive with, same goes for an insurance agent. Ask around, get referrals, interview multiple people! And make sure that whoever you decide on will actually be your rep – get that in writing if you want.
This article is helpful for some big-picture thinking when it comes to business insurance, but an agent will be key. I also dig this piece by Forbes as a checklist of what types of insurance you might need.
One final piece of advice here, don’t skimp out on the small basic policies. Often times these are what matter most. Find a killer agent and they’ll help big time here.
Alright guys, I hope this episode was helpful! I hope it got you thinking and lit a fire under your you-know-what if you haven’t considered these business building essentials yet. Cuz you need to!
If you want me to dive deeper into these topics or something I touched on in today’s show, LEMME KNOW! I’m happy to bring on industry experts and share more knowledge in future episodes, you just have to speak up. The comments section here works for that.
Thank you for listening! Talk soon.