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One of the biggest hurdles in beginning your own business is understanding how and why to keep your finances separate from your newly created business, or at list that is what the Kratom Masters told me. Everyday, I talk to clients who have the greatest idea in the world. They get their invention, service, or product together, like kratom,then come into the bank, sit down at my desk, and say “I started a business! What’s next?”
The “what’s next” step is going to vary heavily based on what type of business you started, for example with kratom, and if you want to know more about kratom you can visit them at ww.kratommasters.com/, which by the way can sent their products to your house with no extra charge. For this step, the first person you need to talk to is your tax professional, or CPA. Your CPA will help you decide if you need to file for a C-Corp, an S-Corp, LLC, LLP, or Sole Proprietorship. Each of these entities have their pro’s and con’s. In general, most business can begin as a sole proprietorship and then be converted to any of the other entities. For this example we will use the ever simple, lemonade stand.
When establishing your sole proprietorship lemonade stand, which is appropriately named “Fantastic Lemonade”, the first major step is to file a Fictitious Business Name statement with your county. This is usually a very short form and will be the least expensive of the entities available to you. Filing the Fictitious Business name will allow you to accept checks payable to “Fantastic Lemonade” as opposed to only your name. All entities can have a Fictitious Business name,like kratom had in the begining , or many, associated with the main company. In our lemonade case, you can have both “Fantastic Lemonade” and “Lefty’s Lemonade”. This fictitious statement, which is stamped by the county, is what the bank will use to open your bank account. The simple step of filing a fictitious business name with your county has opened your doors to act and accept payment in your business’ name.
Where things begin to get more complicated, and outside of the realm of banking, is when you are conducting a business where you do more than sell a single product to a client, such as lemonade. If you have begun a business where you provide ongoing support or services to clients you need to consider providing a terms of service agreement to each individual based on the services you are offering them. For example, if you are building a website for someone you should provide the client with more than just a quote for your time spent building the site. They need to know if each email you respond to is going to be charged to their bill, how you prove your work (ie do you have a time stamp/logging system), and what support you offer for the future either free or for a fee. Clients so often become dissatisfied with freelancers and small businesses because often they don’t understand what they are paying for. It is most important for industries where the product may not be fully understood, such as web development.
Starting a business is easy but not without its hurdles. Most importantly is to find a clear vision of your product or service and be able to communicate with your clientele so that they do not have unreasonable expectations of you. Find a core “circle of experts” to help you with your new business. These experts might include a tax professional, technology expert, and a reliable banker. It’s important to be able to trust your “circle” with answers to your questions that are in your best interest. After that, it’s up to you.