It took me over three years to launch my business.
First, I couldn’t figure out what I wanted to do. Should I sell a product or service? What did I love doing? What was I good at? I him’d and haw’d for months, manically having a new idea every day. (God bless my roommates, because I’m pretty sure they heard every idea that popped into my head.) I knew how to market, build systems and position myself – but I had no idea what to sell.
Then once I figured out what I was good at, what I had to offer and what people would pay money for, I got cold feet. Because owning your own business is SCARY friends. You are praying to God that you get clients, that people want to pay you and that you can figure out things like social media, scaling and implementing marketing plans.
There are a ton of resources out there to teach you how to do these things – ideation, pricing, marketing, etc. But there is no one really talking about the nitty gritty that really keeps people from launching their own businesses. The logistical stuff, you know?
Here are three things they don’t teach you when launching your own business and what I learned from doing it on my own:
The IRS is scary. How do I do taxes?
Yes, the IRS is super scary. Getting audited is scary. Setting aside money for tax time is super not fun. Quite frankly, it makes you shake your fist at the government because you have to write a check for thousands of dollars as opposed to it mysteriously leaving your paycheck. Out of sight, out of mind you know? The idea of doing my own taxes was really overwhelming.
Luckily, there are really great tools out there to keep you organized. From Quickbooks to Xero – there are so many resources nowadays to keep yourself organized and not freak out come tax time. If you’re thinking of launching your own business, I highly recommend working with an accountant (mine is awesome!) and investing in one of these systems. For the very beginning stages, I just used an excel spreadsheet and that was just fine. Don’t get overwhelmed by all the choices. Just start with a simple excel spreadsheet and keep track of your revenue, expenses and taxes.
I’m a single chick. What am I going to do about health insurance?
Woof. This is the #1 thing that kept me from going full-time. I was SO overwhelmed by the prospect of finding my own health insurance, because I’d heard such horror stories. And the state of our health care system…don’t even get my started. I now get why so many people are outraged.
I would advise finding a great rep (you should reach out to mine and tell her I sent you!) who can explain what is available to you. Typically, finding something on the private market is cheaper than Obamacare, especially if you are healthy and only use your insurance for check ups. I would also plan ahead and not wait until the last minute like I did to understand your options and get covered. 🙂
How do I protect myself and my business?
Again, the legal parts of starting a business are really frustrating and confusing, especially if you do not understand legal jargon to save your life. I used LegalZoom, but I’ve been told it’s better to go through a local small business lawyer. They can tell you what your state requires and what pieces you need to have in place to be covered against liability.
When I launched my business, I originally started as a sole proprietorship and then registered my company as an LLC once I went full-time. It gave me protection against someone going after my personal assets, and it is also a simple enough structure that it doesn’t get too complicated at tax time. Again, I would consult your accountant and lawyer. They should be able to tell you what to do.
How do I pay myself?
This seems like a silly question, but I needed someone to spell it out for me. At the advice of my accountant, I opened up a separate business bank account where all of my income and expenses associated to my business would go. From there, I was able to see how much money I was bringing in, how much I needed to deduct for taxes and expenses and the amount leftover to account for my salary and profit. Based off projections derived from previous months, I decided on a specific salary I would give myself that I “direct deposit” into my personal account once a month.
This is where budgeting has become more important than ever! Honestly, this is the hardest part of owning a business. You have to be incredibly disciplined with your money, be clear where you want your dollars to go and make sure you are still paying yourself enough to sustain your business. Once you get a system down, it gets easier. Here are two books that talk about money management in your business and in your personal life. I highly recommend!