You may dream of the financial freedom and lifestyle you can create with your business. But first, you must start at the start.
It’s like Glenda the Good Witch said in The Wizard of Oz, “You start at the start and then follow the Yellow Brick Road.”
Cost: $40 to Be Legal & $20 for Marketing
1. Get a Business License as Sole Proprietor ($40)
Choose a business name. If you are going to call your enterprise something other than your name, you’ll need to apply for a DBA (Doing Business As). (Cost $15)
Later, you’ll want to form an LLC, S Corp or C Corp. As you begin your low-start-up-cost business, the cost for legal entities ($400) will eat up your entire budget.
You’ll need money for other stuff first!
2. Check if there are license, permits, or registrations you need.
What requirement must you meet for your type of business in your state or municipality?
There may be tests you must pass, and classes to prepare you to pass. You may be required to get a permit or registration, along with an application, these can cost hundreds to thousands of dollars.
Where there are requirements, there are stiff penalties for non-compliance.
3. Open a Business Bank Account. ($0)
Business funds must not to co-mingled with personal funds.
Look for a bank with no minimum deposit and no monthly fees. You may want to try a credit union instead of a bank. You can join some credit unions even if you don’t seem to qualify. As long as you have a friend who is a member, you can join NavyFederal.org.
4. Prepare to Pay Business Taxes Properly.
These include income tax, self-employment taxes, and for some businesses, sales tax. If you have employees, you are required to collect tax for them and send it to the IRS and state.
Business tax payments are required to be estimated and paid quarterly.
5. Do Bookkeeping.
This prepares you for paying your business taxes. Learn what’s required for your industry and location and set up bookkeeping systems for all documents and transactions.
To get on track and stay on track, software can help.
6. Protect Your Intellectual Property (IP).
As a small business owner, you may not have invented products or processes to protect. But most likely you do have writing, graphics, designs, and/or video scripts and products that you own the rights to – if you protect them. You may need trademark or copyright protection.
While we’re on the subject, do not use others’ IP illegally. Images, graphics, music, text, and more are owned by those who created them. Just because it’s on the internet does not mean it’s free for you to use. And “royalty free” doesn’t mean its free for you to use.
Hold Onto Your Money. Focus on Getting Money Coming IN, not Going Out.
7. Classify Workers Properly.
It’s important to learn the legalities involved with employees versus independent contractors. If you do not adhere to legal guidelines with these, you may have to pay penalties, back wages, and more. Even if you believe you are justified in having workers as “independent contractors,” you may end up in an expensive court proceeding.
8. Do You Need Worker's Compensation Insurance? ($0)
You don’t need worker’s comp until you have employees. It’s best to begin solo.
Worker’s Compensation Insurance is required in all states except Texas. This insurance covers medical and legal costs associated with work-related employee injuries and illnesses. Check the requirements in your state.
9. Do You Need General Liability Insurance?
General Liability Insurance is required for some types of businesses. For example, housekeeping, in-home care, lawn care, and more should have liability insurance and clients may require it before they let you in their home or on their property. This insurance gives both clients and companies providing work peace of mind, and trust
10. Establish Your Privacy Policy ($0)
You are required to post your privacy policy on your website to let visitors know how any information about them will or will not be used.
To lessen issues with payment acceptance and financial privacy, it may be best to use a platform like PayPal, Stripe, or Venmo. You never collect clients’ credit card information, so there’s no possible liability for you.
11. Use Email Marketing Legally. ($0)
WE ALL HATE SPAM!
Your email marketing helps you gain a following and market to them. But, the opt-in and opt-out processes you use are regulated. Reputable email platforms make you adhere to good practices. For example, you can’t purchase a list to send spam emails to.
12. Begin to Get The Word Out. ($20)
Business Cards (Design for free and VistaPrint.com $20/ 250 or staples.com $16/ 250) are very good to have for any face-to-face business or networking.
Flyers can be great for letting people in your target area know how you can help.
Flyers can be 4-up on a page. ($20 for 100+) Use colored paper and black ink. Distribute these on home doors or at commercial prospect locations. Leave them at libraries, community centers, and other places they allow it. Most cities do not allow you to put flyers on cars. Don’t do that or you may get a fine.