Getting Started in the “Working from Home World” Part II

Alright, you’ve looked at your savings account, chosen your business name, and hopefully at least outlined your business plan. A new chapter is beginning in your life. You should feel powerful and ready to take on the world..

Sole Proprietorship or LLC?

The next step is to decide your tax entity. Figure out whether you want to operate as a sole proprietorship or a corporation. Sole proprietorships are easier to set up and a little more inexpensive to operate. You use your own Social Security Number for all business transactions and tax materials. LLCs (Limited Liability Corporations) require more work to set up and typically need the help of a professional. The fees and taxes are a little higher, however; an LLC separates your personal assets from your business assets. That means if someone sues your business, your home and personal assets are, for the most part, protected.

Another benefit of a LLC entity? A government contract work requires one. So, if you know that you will be bidding for government contract jobs, a LLC entity is a “no brainer”. There are positives and negatives to both types of businesses. Some entrepreneurs start as a sole proprietorship, and then once they have significant revenue, decide to switch to a LLC. This can be cumbersome in the long run. You will want research both options and contact a tax professional to decide which is best for you.

Becoming an Official Business Owner

You’ve developed your business plan and you have the perfect business name picked out.

After you decide on a name and tax entity, register it with your state. Depending on which state you reside in, you many need to register it in both your city and county. Don’t worry; your state revenue department will help you with that. Just go to your state’s revenue website. They will have instructions, locations and common questions and answers.

Once you’ve filled out the necessary forms and paid the necessary fees, it’s time to start working (and making some money).

Developing a Website

If you haven’t already, purchase a domain name to use for your company website. Your website will be essential to your success. It doesn’t matter if you’re selling products strictly on the Internet or if you’re a dog walker. Your online presence is extremely important. People will look for your services or skills online. If they can’t find you, they will give their business to a competitor that they can find. Once you have a domain name, you will need to set up your actual website with a hosting company.

I’ve heard that other business owners have had success with WIX. You can build a website with one of their many templates for free and then use your completed template with any hosting company you wish, or WIX will host it for a small fee. They even have free resources, such as: blog posts ranging from website planning to local marketing and a SEO tool to help choose words to make your website stand out. (Please note that I don’t use WIX for my blog-so I’m not getting paid for referrals).

Now What Do You Do? Start Working and Marketing

Alright, you’ve named your business, the state recognizes you as business owner and you have a website. Develop your portfolio, craft your products or bake your goods, and then spread the news. Market yourself until you can’t market anymore. Get on social media and attend local meetings. Marketing is essential. If people don’t know that you exist, you will never get their business.

Marketing is a whole other beast, so we will save that topic for another discussion. By now you should have a pretty broad idea of what this business venture entails. Are you ready to take on the “Working from Home World”? I hope you are, because the rewards of entrepreneurship are amazing.

Getting Started in the “Working from Home World” Part I

You’ve figured out your passion (and possibly found your niche).

Now what?

You’ve got to make sure you can make money with it. Just because you like to bake doesn’t mean that you would enjoy (or be successful at) owning a bakery. Research, and then research some more. A business owner has many hats to wear. You’ve got to manage and market your business, all while taking care of customer service, sales and invoices. After you get started, it will be easier to hire people to help you, but you’ve got to be able to afford to pay yourself before you hire other people.

I would suggest that you save enough money for 6 months’ living expenses. That might take a little sacrifice, but it will help keep your sanity in check later. It will take some time for your business to generate revenue, and you don’t want to have to quit right when your business is ready to soar.

Your business is not a hobby.  The US government considers your venture a hobby if you are not actively trying to make money or if your profits are $400 or less. You want to make more than $400 a year.

So, let’s turn your idea into a business.

Developing a Business Plan

You know what you want to do and you’ve got some great ideas. Now you need to make sure you get those ideas down on paper. If you need a loan, a well-developed business plan is essential. Many ideas that I’ve written about don’t require many, if any, start-up costs. Eventually you may want to expand, but you probably want to start a business now, without having to raise or borrow capital. Even if you don’t need a loan, a business plan will help keep you and your business on track. Without a business plan, you will wander around aimlessly, doing whatever sounds good at the moment. You can visit score.org (more about them later) for great information on how to write one. Have a plan for your business. Set it up for success and you will be successful.

Naming Your Business

Think of a name for your business. This may be a little harder than you first imagine. You have to make sure no one else has the same name that you do, otherwise getting a website for your business will be a little harder than it should be. A quick Google search will let you know if your perfect business name is already someone else’s perfect business name.

If you want to appear higher in search results, try incorporating what your business does into your business name. For instance, a copywriter might want a name like, “Quality Writing,” instead of using just their first and last name. People will search the Internet for “quality writing,” but until you’re well known, people aren’t going to be searching for you by your first and last name. If you’re only marketing your local area, this isn’t quite as important because you won’t have as much competition as an online store. However, if you plan to conduct all business on the Internet, a search engine-friendly name will help people find you.

Break Time

I’ve given you quite a bit of material to digest. You might want to take some time to think about your savings account, your business name, and your business plan. The first steps are very important and shouldn’t be rushed or hurried. A successful business begins with a strong foundation.

Continue reading Part II of this blog for the final steps of becoming a business owner.