So, you’re taking the plunge in 2012. You will go off on your own. At the very least, you’ll be a solopreneur- but you may have aspirations to start a true enterprise and, therefore, become an entrepreneur. It’s not just a a business plan and a rolodex, you’ll need, however.
You need to determine if you will incorporate (that includes forming an LLC). Yes, even (especially?) solopreneurs need to consider this. Let’s start a some simple reason- protection of your personal assets! There are many other tax related reasons to incorporate- but they can be very specific to you and your (potential) operations and situations. You should find a very savvy consultant to help you, (Of course, we are available- any day but Saturday.)
You should begin your operations using an accounting system. Now, don’t go out and buy QuickBooks, right away. It’s a good enough system- but it may be overkill for your needs- or miss some things you will need. For example, if you are not going to have inventory (of products to sell), Quicken Home and Business is probably a better choice to suit your needs. It’s very easy to use, prepares invoices for your needs, and provides reasonable reporting capabilities. If you need to track your time, you may want to choose PCLaw (reasonably priced for smaller firms) or TimeSlips (which then means you must also buy an accounting system for true accounting purposes, a second program). These are the sort of questions you need to address right away- long before anyone from the IRS comes knocking and wants to audit your tax return.
You also should have put aside some money for the dry spells that can come along. You will be a most singular entity if you open your doors on 3 January 2012 and have work and funds rolling in the door for 12 months in a row.
Which is also the reason why – in spite of everything you read- that you should not hone your offerings to a single concept. It is possible to have a small niche- but you will need to offer your potential clients (customers) enough of an offering that you can stay reasonably busy. (Most entities should consider 70% engagement a rousing success. The rest of the time will be spent on marketing and business management. You may even find you need to hire additional staff if you are able to operate at the 70% level, since there may not be enough time for marketing and networking left over. Remember to price your services/offerings to take that into account. It’s not 2080 hours upon which you base your rates, but 1450, to afford time for vacation, marketing, and business affairs.
You also should designate a region in your house (or rent office space) for your work. One that is devoted to your activities, with filing and working space. There are going to be nights when you won’t want to clean up, when you stop working (or when you just need to STOP- take a walk or listen to music or watch TV). This space is also deductible to you on your taxes (a portion of the rent or mortgage- including utilities), if it is a dedicated one.
You will also need a web site. No, don’t expect it to bring in new clients for you. It may do so, but from our experience that is not universal (it’s actually pretty singular). But, you need the website for substantiation for those potential clients you meet via networking or marketing- for them to feel more secure or to insure that your capabilities meet their requirements. (Remember that idea about the too-tightly bound niche!)
Finally, you need a schedule. And, you need to get dressed for work (not a tux, silly- but real clothes). Don’t just sleep late and work whenever. Science has shown that wearing ripped jeans versus standard attire lowers your productivity. You need to have a schedule to insure you have time for working, networking, and marketing. And, a set time each week to monitor your business (accounting, key performance indicators [KPI]) and to bill for your efforts. Oh, you can break the schedule, for your own purposes, but the schedule will make sure you get your work and marketing done.
Go forth and profit!
Great tips Roy!
I guess you covered up everything for the newbies wanting to start off afresh in the coming year. Those surely are wonderful tips to take care of 🙂
I do remember the time when I had started writing as a freelance writer, and hardly knew anything much about making blogs or websites. It took me a lot of time to learn about things, and it is only recently that I realized the importance of shifting my blog to wordpress from blogspot. So, it is never too late to learn and pick up things 🙂
Thanks for sharing and the wonderful reminders.
Happy Holidays to you and yours as well 🙂
Harleena Singh recently posted..My Wish List and Resolutions
Harleena:
May 2012 provide more opportunities and results than 2011 afforded.
Thanks for your comments- and I agree that the second we stop learning is the second we stop growing…
Roy
Roy- These are all helpful tips that every entrepreneur needs to read. I couldn’t agree more about creating an LLC. I finally did that after hearing an attorney speak about small businesses she had to protect in lawsuits. There’s no question that a website is invaluable but some people still aren’t convinced and refuse to have one. I’m going to pass this post along to some people I know who are starting businesses this next year. Great info!
Lisa Kanarek recently posted..Get Thinner Files in Just Minutes a Day
Glad you liked it- and knew about the value of incorporation- for protection AND tax situations.
Thanks for visiting and commenting.
Roy
Now if people only get their mindset right and do it step by step. Success takes planning and understanding. Thanks Roy
Roberta recently posted..Stuck wanting a Perfect Christmas?
Ah, the old “one foot in front of another” advice. Amazing how universal those instructions are, Roberta!
Wonderful list of considerations and tips here Roy. Every person who thinks they are ready to strike out on their own should review this! 🙂
Bonnie recently posted..A Different Kind of Reflection
Thanks, Bonnie!
Glad you liked the “verbal” list 🙂
Roy
Excellent post, Roy. The business side is something that many new freelancers are not really ready for. Some do not think of themselves as business owners. To help drive the point home for myself, I started listing Business Owner on the online forms asking for titles. A gesture, true, but it helped me remember that very important detail. 🙂
Tweeting this one!
Cathy Miller recently posted..Is Your Hamster Wheel Business Communication Getting You Nowhere?
Glad you liked it, Cathy!
And, that is a big issue. Freelancers don’t understand they are in business. Until the tax bill comes- and, then, it’s kind of late to right the ship. Or, worse yet, a lawsuit that imperils their personal possessions….
Roy
A real easy to understand, step by step approach to setting up a business. Really good information you share here Roy. I am glad you mention that small biz owners do not necessarily have to go out and get Quick Books right away – I did that, spent tons of money, hired a bookkeeper as I didn’t understand the software and it wasn’t economical for my business at the time.
A great tip is to ‘grow’ with your busness. Keep it simple, smart and streamline. Use tools that you know at first and then grow into others that will be more beneficial for the amount of business you are doing. Outsourcing is a huge way to spend a little, but get a lot in return. My team is mostly outsourced, but I love each one of them as they provide valuable services for me and my business.
Also be sure to talk with that savvy consultant about forming an LLC or Corporation. Again, I was misled and spent a lot of money where I really didn’t need to form the LLC until much later after my business (jewelry biz at the time) started making the proper income/profit to justify the expense. But it does provide protection as you mention Roy — and I leave that up to you the expert on giving advice on that.
This is a really good article to hand out to any new or newly formed business. Thanks for sharing your tips and advice Roy.
Lynn Brown recently posted..Measuring Your Social Media ROI for Facebook and Twitter
It is so easy to give canned advice- but rarely woth the paper or screen space it is accorded.
Glad you found the post to remind you of what and where you were when you began. That was my goal- to provide useful advice to everyone- BUT from where they are currebtly sitting- not where I want them to be.
Roy