A lot of people in business have a sort of disease. It’s sometimes called “putting the cart before the horse” or simply “procrastinating.” But let’s get one thing straight: just because you have customers and ideas doesn’t mean you have a business. Sure, you might even be making money. But if you don’t have a long term plan, you run the risk of being dead in the water.
Here’s what you need to be doing, in order.
- Incorporation & Admin
- Marketing
- Sales
- Product Delivery
- Customer Service
© Flickr User jakeandlindsay
Over the course of this series, I’ll be talking about each of these items in turn. But let’s start with the first thing every business owner needs to do incorporate.
Too many business owners make the classic mistake of starting out, trying to building a business with their own money, co-mingling their personal finances, visiting customer sites, and paying people as employees. This creates a tax and liability nightmare down the road.
In most states, you can establish a Limited Liability Corporation (LLC) for a small fee. Tons of guides exist online that explain how to do it. You can call an attorney for help, or just call the local Secretary of State.
Next, go to a bank and open up a new checking account for your business. The banker should be happy to help you with this and should be interested in your LLC paperwork. You might consider going to a totally different bank so that you aren’t tempted to confuse your finances.
Once that’s done, you’re ready to get started. Only spend money on your business through your business account, and only take payments through that account. And now it’s time to get an accountant who can advise you about local, state, and federal taxes.
Don’t skip these steps. It’s essential to start right. Too many business owners never take these actions, and have to pay for it later.
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