What to consider when starting a business
Whether it’s a new year’s resolution or something you’ve been planning for a while, starting a new business is an exciting and, often, scary adventure. As a self-employed business owner myself, I know how it feels to leave the security of being employed by someone else so I could enjoy the freedom that comes with self-employment.
Over the years, I’ve written a lot of blogs about many aspects of owning a business, especially when it comes to finances. I thought that for my first blog in 2023, I would do a roundup of those blogs to give you a starter's guide to starting and running your own business.
Before starting a business, ask yourself these questions:
Is self-employment for me?
I tell people that there are three key traits you will need if you want to be self-employed. If you aren’t in a place in your life where you can embrace those traits, perhaps full-time self-employment is not a good idea right now.
Is the time right?
Perhaps you are already in traditional employment, but you have a side gig you know you’d prefer to be your full-time job eventually. These tips will help yo know if you should take your side gig and make it your full-time business.
What kind of organization do I have?
Revenue stream or business? That may sound like a weird question, but it’s a necessary discussion point. If you are already in business and do some side work that you think might be a separate business, it’s good to know the difference between a business and revenue stream. The blog will also help you decide if your side gig is just another revenue stream for your family or something that could be a full-time business.
Business or nonprofit? Once have that question answered, you need to decide what kind of entity your business will be. Believe it or not, one big question entrepreneurs wonder is if their idea would work better as a business or a non-profit organization. I offer some suggestions to help you decide if your business idea should be a business or a nonprofit.
Business type? If you decide that you for sure want to start your own full-time business, you will need to decide which filing status is best for you. This discussion should be with your tax preparer because they will know more about your specific situation, including the need for employees, inventory, etc. I you’ve been doing your taxes yourself, here are some tips on finding a tax preparer that is right for your needs.
Where do I go from here?
Once you decide that self-employment is for you, I recommend that you make sure to follow these new years resolutions for your business, no matter what time of year you start!
I will always suggest that as a business owner, you outsource what you can as soon as you can. That includes getting help starting your business from free local resources such as the Arkansas Small Business and Technology Development Center or Startup Junkie. Another potential valuable resource is SCORE.
Of course, as an accountant, most of my advice will be about managing your finances. First and foremost, you need to follow these three rules about your finances. I also would say that once you are established enough to start outsourcing, you consider outsourcing your accounting first. I suggest also following the tips in this blog about deciding if you should do your own taxes or not.
Deciding which business tasks you should do on your own and which you should outsource is another question to consider.
A few more tips
As you go along in your entrepreneurial journey, I suggest having a group of friends who are fellow business owners with whom you can bounce ideas off of each other. You won’t know all the answers, and that’s OK! It’s important to know where to go for help.
Being an entrepreneur is tough but very rewarding. I wrote about entrepreneur self-care a while back, including how to evaluate your business.
I know this is a lot of information to absorb, but you have people who can help! If you need help figuring out the bookkeeping and payroll side of your business, give me a call!