Can Turn Your Side Gig into a Full-Fledged Business?
Have you been taking on a ‘side hustle’ over the past couple of years? Do you dream of quitting your 9-5 to pursue your passion? When is the right time to start your own business and how can you make that happen?
The first thing that I advise is speaking to an attorney about what type of corporation you would need to create. Can you work as a sole proprietor? What are the personal risks to your assets if you continue without incorporation? Do you need a full corporation or can you proceed with a Limited Liability Company? Do you have a partner? How will you share income and responsibilities? Now you are ready to talk about leases, contracts for employees, or liability waivers with your attorney.
Hire an Accountant
The next step is to hire – if you do not have one – or consult your accountant. There are several minefields with taxes: employment tax, income tax withholding for employees, payroll taxes and not to mention how you will prepare to pay your taxes when they come due. If you have a payroll company, they can handle a lot of the daily, weekly, monthly, and quarterly tasks. If you do not, then working with your accountant can save you trouble down the road.
You will want to invest in a form of bookkeeping software. This will help you at tax time, payroll time, and will help you find out if you are making money with your business. Speak to your accountant about what would work best for your business.
Work with an Insurance Agent
It’s important to find an insurance agent that can help you assess liability if you drive your car for business purposes, what kind of business or errors and omissions insurance that you will need, and if you need an ‘umbrella’ policy. Your insurance agent should help you navigate the insurance traps that can occur for a new business.
Separate Personal and Business Finances
It’s also very important to separate your business finances from your personal finances. It is tempting to run all of your personal and business expenses through your personal bank account. However, this will get you into trouble when it comes to tax time and figuring out write-offs. Further, if you happen to have an issue that results in a lawsuit, then your personal assets can be at risk if they are comingled.
What is Your Business Plan?
Do you have a business plan? Do you know what one is? How do you plan to grow your business over the next year, the next five years, etc? What is your target audience? Take some time and put down what you have now, where you want to go, and how you are going to get there. You can use your business plan as a road map as you go forward. You can break down large tasks or goals into manageable tasks.
Last, but not least, make sure that you have evaluated your finances. Do you have a couple of months’ reserves? Can you borrow money to build your business? What would that look like: rates, repayment, costs, etc.?
Contact Moseman Law Today!
If you are looking for help and guidance on how to pursue your passion, contact Moseman Law Office today! We help new business owners by setting them on the best path for success. Fill out our contact form, and we will be in touch very soon!