Starting a business... had questions

[Korodic]

So I want to create a business that does home IT solutions to compete with other things in my area. How would I go about this? Currently I just get paid in cash under the table, and there is a zero liability understanding with my clients.

 

But how do I become an official business? Can I have workers who are independent contractors as well? (so I dont have to worry about balancing checkbooks and stuff).

 

The real issue here too, is this is currently equivalent to snow shoveling... We get clients on a break-fix system... It isn't every day I make $... so how do I become legal without the government eating all of the profit?

 

I'm a total noob at this and figured someone on here might have at least some idea if not the answer to how this works...

[Illiad86]

I'd really suggest you take a business class at your local tech school or college. Trying to start a business without even some basic knowledge could end in failure. It's not as easy as some people think.

[JimboUK]

Have you got enough work to make it worthwhile? You're going to have to start paying tax and insurance if you go legit. You can undercut others at the moment, it'll be a lot harder to that if you're going to be on a level playing field with the competition.

[tredmillion]

basically i'd distribute lots of posters and get lots of word of mouth around, advertise in local papers, anything you can, get a name as a quick professional and well priced service, to go legit your going to need to build a large customer base and a good name, your gonna have to have daily call outs and be doing more than 1 persons work for a while before you'd be in a position to hire another person, but then again it also depends on the terms of employment, you could give them a percentage of how much you make an hour from said call out.

 

as for actually registering your business you'd have to check your governments website on various tax rules, you'll probably have to get legal advice and advice from an accountant on how to go about setting up.

 

making the transition from cash in hand to legit business is not easy and is the downfall of many many small businesses, unless your really raking it in i wouldnt bother making it official.

[bben46]

Your location shows as US so I do have experience in starting several small business here.

First thing everybody wants a piece of your money.

 

Here are some of the things you need to look into

 

First, business licenses, city, county, state & possibly fed. Without them you cannot legally do business in that jurisdiction.

My security business required a special state license that required a one time test only given once a year. Plus a full background check on every employee - even the secretary. You cannot operate in the state without that license. Check to see if there are any special licensing reqirements for your business. And don't expect the bureaucrats to just tell you - they tend to not even know themselves. Ask another ligitamate business in the same field - and hope they know what is required. :rolleyes:

Tax ID numbers - at a minimum, state & fed - possibly county & city as well.

If you will be going into other people's homes, you may need to be bonded - varies from place to place.

Zoning laws & Home owner associations - some regulations do not allow a home based business - you must have a separate business address (Maybe you can use a place that rents out PO boxes as your business address if you have this problem)

Insurance - without it you are responsible for paying everything out of pocket in case of a glitch - such as, if you are sued for messing up someone's computer.

Incorporate to protect yourself. As a one person operation , a type S corporation is the least expensive way to go and will (probably ) protect your assets such as your home and car if you are sued.

Then, for some of this you will need a lawyer to do the legal BS for you.

If you are making any money, you will need to pay an accountant to do your taxes and possibly billing if you get big enough. A good accountant pays for themselves, a bad one can ruin you.

 

Every different government entity demands that you absolutely must follow their rules no matter whether they apply to your particular business or not. - This means at the minimum you will be required to fill out forms on things like disposing of hazardous waste, tires, batteries, paint etc. EEOC compliance, OSHA compliance and others. :wallbash:

 

Then when you have even one employee - that opens another can of worms - and the rules on whether or not a person is an employee or contractor can get you in trouble quickly.

 

All of this costs money - lots more than you will expect. Like I said everyone has their hand in your pocket when you try to start a business.

Having gone through this multiple times, I would still do it again if the right opportunity comes along. I wish you luck. :thumbsup:

[Korodic]

I appreciate the responses, and it scares the hell out of me to need to keep on top of all of that (and the $ all of that would cost) and it really doesn't pay off for the amount of work I would end up getting. Though I'm sure thats probably the only legal-approved eway (since they certainly do want their hand in your pocket >.>). Which leads me to the next question...

 

Even more of a gray area question... because I dont really make a lot of money... at all... or have a large customer base... is being "illegal" okay? I only made $160 so far and that was two months ago. Not a penny since...

 

I know that sounds like a dumb question. But without a constant income (which I dont have) I would not be able to afford regular taxes and what have you.

 

Again I compare myself to a snow shovel-er at the moment, and it is basically just that. A small side job with a small title. Just trying to earn some money to feed my other hobbies.

 

EDIT: bben what haven't you done? :psyduck:

[tredmillion]

from my perspective i think its perfectly fine carrying on as you are, its not a full time thing, it could scarcely be called a part time thing! sure it may be undeclared but so much stuff is, the government dont try and muscle in when you sell something to a friend do they?

 

all in all i'd say carry on as you are mate, your doin nothin wrong :)

[Korodic]

I mean, I'm not even sure if it is illegal? Or at what amount of money you need to legally be registered as a business? They don't really make this information easy to find... :facepalm:

 

I suppose I just need to advertise myself for what I am to whichever client I get. Make them provide a siggy on a zero liability waiver, and just roll with that. It's all I can afford to roll with anyways.

 

Here's to wishing I win the lottery some day!

 

http://1.bp.blogspot.com/-0wLKeCIIt5Q/T6T9GLPq5ZI/AAAAAAAACKU/1DAgDRn-0G4/s1600/jQuery%2BCookies.jpg

 

:dance:

 

lol jk the odds of getting struck by lightning are better.

[bben46]

There's a lot of things I haven't done. But I'm not dead yet. Come to think of it that's one thing I haven't tried - but I'll get around to that one of these days. :tongue:

 

 

Most jurisdictions won't do much to you for not being a licensed business as long as you are not making much money and are not advertising heavily. - just claim it as a hobby. - there is usually a fine if they ever catch you though.

[tredmillion]

 

 

lol jk the odds of getting struck by lightning are better.

 

heh my dads been struck by lightning twice, we're still waiting on those lottery wins tho xD