With help for small businesses all around, it’s tempting to jump into the start-up pool. And, as long as you’ve got as much organization as enthusiasm, the water is fine.
Q: After being on a job hunt for the past three months, I’ve realized that I don’t want to be a corporate guy anymore. Lately, I’ve been thinking about opening my own business, offering tech support and computer repair. But just the thought of starting my own company is overwhelming. Where should I start? I have limited funds, and I don’t want to make any expensive mistakes in trying to do it right.
A: First of all, congratulations on making such a bold decision and having the courage to go forward with it. In the midst of hammering out the details of your business, from legal issues to tax concerns, it can be difficult to remember your initial enthusiasm. So, along the way, just remember that starting your own business can be a zesty, fulfilling enterprise, and that passion for one’s occupation goes a long way toward building a successful company.
Now, let’s get down to specifics. With limited funds, you’ll have to keep your start-up costs minimal, which usually translates to working from home. Setting up a spare room that you use only for business is the best scenario, since you can deduct part of your mortgage or rent and also some utilities.
In revamping this room from guest-friendly to business casual, be very careful to have everything in the room be business-related. Stories abound about IRS audits of home offices that result in a loss of deductions. One business owner saw his home-office deduction wiped out because his kids had adopted part of the space as their playroom.
Having an area that’s business-only is important, too, for keeping you in the right frame of mind. You’re there to work and make your company a success, and the fewer distractions, the better.
Once you decide where you’ll be setting up shop, it’s time to evaluate your goals. This may sound deceptively easy, since you may be tempted to say, “Well, I want to make money and be my own boss.”
Although both of those goals are important, there are others that need to be addressed:
— How long can you run the business without needing other income from a part-time job?
— How comfortable are you with unpredictability?
— Do you feel that you have enough knowledge in the field you’ve chosen, by having certifications or job experience, or will you have to do additional training before you open shop?
If you’ve got the funding, the expertise, and you’re ready to make the commitment despite unpredictable income, then you’re probably ready to launch into this full-time. However, if you’re already fretting about money, or feel like you should get some certifications first, you may want to start a business part-time and work for another company part-time to lessen your anxiety.
If you’ve decided to make the leap with both feet in, and you know your base of operation, you get to start working on the really fun stuff: deciding what kind of legal structure your company will have, whether you should write a business plan, what kind of insurance you should get, and how you’re going to do accounting tasks. Just looking at this basic list may bring back that feeling of being overwhelmed, but don’t worry. Even if you don’t know about this stuff yet, there are many people who do, and they’re ready and willing to help.
In other words, although you’ve chosen to go solo, that doesn’t mean you should go it alone. Take some of the funding you’ve built up and hire an attorney who’s familiar with small-business needs. Not only can good lawyers tell you the difference between a sole proprietorship and a corporation, they can also help you as the business grows, giving insight into zoning issues and business plans. They don’t come cheap, but trying to tackle thorny legal challenges on your own could be much more expensive than paying attorney fees.
With the legal issues taken care of, dig deeper into those pockets for at least one more professional: an accountant. True, there’s a bevy of small-business software that can track expenses, do taxes, and create budgets. But even the most advanced application in the world can’t give you advice on retirement funds, business trip expenses, or marketing costs.
That doesn’t mean you shouldn’t keep your own books; knowing where you stand is important. However, having someone who can interpret the financials is invaluable. For high-level strategy advice, also check out the Service Corps of Retired Executives, an organization designed to help people just like you. Best of all, the counseling and advice they provide is free.
With sound advice, a good place to work, and enthusiasm about your new endeavor, you should go far on your small business journey. Good luck on taking those first steps.