Updated: Nov 5
Another issue of the local Carbon Valley Life is out! There's lots of great content, but we especially hope you'll turn to page 34 to read Margrit's tips to those thinking about striking out and starting their own business. Or, just read on because it's excerpted here:
Pandemic got you thinking about starting a new business and being your own boss? You are not alone. According to information from the US Census Bureau, new business filings for self-employed business owners are up significantly this year and especially so in the last several weeks.
For the solo or small business entrepreneur in Colorado, the initial steps to forming a business are quick and cheap. The Colorado Secretary of State’s website has easily accessible online forms and the initial filing fee is currently $50. Obtaining the federal EIN is free and takes only a few minutes of time online.
But, there’s more to it than that. As you start to give shape to your business, there are a number of things you’ll need to stay on top of. Here, I’m talking about risk management and legal and tax compliance, the things you should be thinking about and be doing to protect the business that you have worked so hard to develop. As some examples:
Business name (Have you chosen a name that does not tread on another business’s?)
Choice of entity (Have you carefully considered what form of entity you should have from a liability protection and tax perspective?)
Entity governance documents (Do you have them, especially if you are going into business with others?)
Licensing and permitting (Have you obtained all the necessary permits and licensing that is required for your business?)
Insurance (Do you have appropriate insurance in place to protect your business against risks?)
Intellectual property (Are there trade name or copyright protections you should have in place?)
Bookkeeping/accounting systems (Do you have adequate procedures in place?)
Employees (If you have people working for you, have you properly classified them as employees or contractors, and are you compliant with applicable employment laws?)
This list may sound daunting. But you need not and should not do this alone. Even if you are a solo business owner, you still do have a team behind you. Your team is made up of your professional advisors and business partners. They have the knowledge and expertise to guide you when you have questions. Develop strong relationships with this team early on, even if your initial budget doesn’t permit full use of their services. This early foundation will serve you well in the long run as your business grows. Your professional advisors are good at what they do. Let them do their work so you don’t have to. This will free up your time to do what you are good at. This will also give you the comfort of knowing that your business affairs are in order. Who are these people on your team? Consider the following, although there may be more:
If you aren’t sure where to start, how much help you need or can afford from each of these professionals, set up a time to meet with them. For professional advisors like accountants and lawyers, consider hiring one for an hour or two consultation to teach you best practices and help you focus and prioritize your needs. For example, I am a lawyer, but I’m not an accountant or a tax preparer. When I decided to start my law firm, I sat down with my business accountant for an hour armed with questions. I walked away with a solid foundation for a good working relationship.
Successful businesses consult at appropriate times with their professional advisors. They make sure their bases are covered, get timely advice, and as a result have taken appropriate steps to manage risk and in turn provide great service and experience to their customers.
Good luck with your pandemic-timed business!
Note: Individual circumstances and state laws vary. This post is not intended and should not be relied on as legal advice for your particular circumstance. If you are in need of legal assistance, seek legal counsel.