The call to become an entrepreneur comes at different times in peoples’ lives. For some, the beckoning occurs after years in a corporate world filled with mindless meetings and soulless work. Others seem to know early what they want to pursue through MVP development and start creating their own enterprise after college. A select group seem to be born to run their own businesses, and you’ll find them setting up small ventures well before their university years.
Whenever the calling comes, entrepreneurs are bound by the siren song of freedom, charting their own way and walking the road less traveled. They are willing to risk things in life for a chance to pursue their dreams. The long hours and hard work are a response to the dogged pursuit of their vision and each success is celebrated as a milestone along the way.
Form a Corporation or LLC
When you start your business venture, it’s vitally important to protect the money you have invested and your financial future. One of the first things you should do when creating your new company is to form a corporation or LLC. As mentioned by llcguys.com – “unlike a sole proprietorship, these legal forms of doing business protect you personally from the debts, liabilities and obligations of the business.”
You should consult with an expert to evaluate whether you actually need to incorporate, or if an LLC (limited liability company) is sufficient for you. The rules for setting these up vary by state so you’ll want to make sure you get the right advice, and you do your research thoroughly.
Get Full Business Insurance Coverage
To fund your new business, you will likely be investing a lot of your own money. There are lots of startup costs, equipment to buy and operating expenses to finance until the first sales come rolling in. To protect your upfront investment and your on-going business, you’ll want to consult a business insurance specialist who can provide a commercial policy that will cover your needs.
In general, business insurance will address several key areas. General liability coverage helps protect you from any property damage or injury claims that could be made against your company. You’ll also want personal property insurance that protects your buildings, equipment, inventory and the like. Policies can also cover business income, professional liability and worker’s compensation.
Handle Payroll and Sales Taxes Correctly
Keeping on top of cash flow and having enough money in the bank account can be a challenge for any business. If you have employees and do payroll or sell goods where you are obligated to collect sales tax, you have to make sure that you handle those taxes correctly. Each time you pay employees, you’ll be withholding money for federal, state or local tax deductions. With sales tax, you will be receiving funds to pay for those obligations.
The catch is that the money you collect for each of these is due sometime in the future. Often, a cash strapped business might be tempted to dip into the payroll withholding or sales tax receipts to fund their daily activities. You should never do this. If your venture has severe financial difficulties and you have to close the business, you will be responsible for paying that money personally and will not be shielded by your corporate structure. It’s exciting to watch your new business come to life, but you have to make sure to take the steps to protect your investment and your dreams. By incorporating, getting the best business insurance coverage and handling your tax obligations correctly you’ll be setting things on the right course.