What does it take to start a business? To be an entrepreneur? To succeed at being your own boss? The following text was excerpted from a presentation put together by Wil Shipley, and is available in its entirety as a 172KB PDF document. (HT: Zimran of winterspeak.com)
Part Trois: Starting Your Own Business
What are you, crazy?
Well, if you're getting set to start your own business, forgoing any "regular" job you have or might otherwise have, you might be! Wil Shipley asks the questions that define the risks willing to be undertaken by an entrepreneur (at least, in his vision):
Starting your own company
- Do you hate being told what to do?
- Do you like to lead?
- Do you like eating rice and beans?
- Do you mind living in a box, down by the river?
- You might be an entrepreneur!
But, isn't setting up a business hard? Wil provides insights from his experience:
“Forming a Company is Easy!”
- Me, againStep 1: Create an LLC
“Limited Liability Company”
- Very simple taxes for LLCs
- Incorporating keeps you from being sued and losing everything
- You will get sued
- Incorporating keeps your books clean
- You will get audited by the state
- File forms on-line, save a ton of money
- You can form an LLC for about $150
Step 2: Open a business bank account
Do not use your personal account
- Some banks focus on businesses
- You really want to use one of these banks
- Ask to speak to a business banker
- You’re going to start a relationship with this person
- This person might end up being your best asset
- Good business bankers say:
- “Your account is overdrawn; should I just cover it?”
- “Want some money?”
- “Need credit cards?”
- “Want those fees reversed?”
Step 3: Find accountants
- Accounts don’t keep your books
- You’re still going to have to track sales and expenditures yourself, every day
- Use QuickBooks
- KEEP YOUR BOOKS CLEAN
- Every penny you earn or spend has to be categorized
- The beauty is you get to write off some expenses when tax-time comes
- Omni wrote off giant TVs, pool tables, and pinball machines
- Accountants do:
- Give you advice on husbanding your money
- File your taxes
- Tell you what tax agencies you need to pay, and how to pay them
Taxes Suck
- State of Washington
- WA B&O - Business and Occupation
- City of Seattle
- Seattle Business License
- Seattle Occupation
- King County
- Monorail
- King County Occupation
- If you have employees
- Federal
- FUTA - Federal Unemployment
- FICA - Federal Income Tax
- Medicare
- Medicaid
- State
- SUIWA - State Unemployment
- WA L&I - Labor and Industries (disability)
Step 4: Retain some lawyers
Again: you will be sued
- Talk to friends and associates, get a recommendation
- Don’t have them form the company for you; that’s a waste of $1000
- Don’t pay them a lot up-front
- If they want a $5,000 “retainer,” then walk
- Find someone young and hungry
- Less than $100 / hour scares me
- More than $300 / hour scares me, as well
- I like finding young people at big firms
- Big firms are famous
- When you send nastigrams, they stick
That concludes what Wil feels is most important in establishing a new business. Although the bulk of the presentation revolves around Wil's programming business, the whole presentation is well worth reading, offering great insights on employee compensation, why you need lawyers and how to get a job working for "The Man," among others!
Labels: business
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