Is your number one Wishlist goal to set up your own entity and become a Solopreneur business owner or consultant? Are you planning to leave the “security” of a traditional job to directly market and sell your product or service to customers with money and a motive to do business with you?
Going alone is a thrilling and sometimes frightening prospect. Those who take risks eventually find that many of the resources taken for granted while working in an office are not available to those who venture out on their own. As you weigh your options and prepare to write your business plan, be aware of some of the changes and additional costs that are expected if you join the self-employed sector:
There are no paid holidays
There will be no more paid sick days, days off, vacation days, or personal days when you are captain of your own company. There will also be no payment for holidays caused by inclement weather. As winter comes and snow starts to fall, there will be days when bad weather conditions affect your business and your income. When your state governor declares a snow emergency, important meetings will be postponed and businesses may not be able to open and operate.
Especially for those with B2B or B2C businesses whose business model requires you or your employees to visit a customer’s location (e.g. cleaning service), or a customer visit your location (e.g. laundromat), snow days = no revenue days. Small businesses have been known to go out of business within a year after periods of extreme weather.
Establish business credit
For tax purposes, it can be useful to open a separate business bank account and also apply for a business credit card or two. There will be business expenses to write off and you want to make it easy to keep track of expenses. Do yourself a favor and check your personal credit asap and pay off outstanding credit card balances to improve your credit score and fix any mistakes.
Financial management
Financial management will assume more than one form. As mentioned above, you should assign credit to the business so that you can order inventory and supplies without directly impacting the business’s cash flow, for example. It is a Payable item. You also need to ensure that customers pay you on time, or at all, and that is the Accounts Receivable function.
Maintaining adequate cash flow is essential to the continuity of your business and your own ability to keep a roof over your head, food on the table and your car on the road. You should develop a business budget and plan for equipment purchases, license fees (if applicable), insurance (if applicable), professional certifications (if applicable), or space leases (if applicable).
In addition, you can consult a business attorney or accountant to discuss the legal structure of your business: Sole Proprietor, Corporation (chapter S or C), or Limited Liability Company (LLC). The type of business you are in and your exit strategy will play a role in choosing a business legal entity.
Pay for office supplies
Free scanning and photocopying will end. When you need to staple multiple sheets of paper together, you’ll need to buy a stapler and staplers and you’ll also buy paper clips and envelopes.
There will also be no meeting rooms or audiovisual equipment for you to book with. You should meet in the client’s office, or at another coffee shop or restaurant. Privacy may be an issue and setting up Power Point or other visual presentations may also be awkward.
A lap top computer or tablet will be a must-have office equipment. It’s important to have the tools of your trade and to always appear as a competent and prepared professional as you develop your reputation and build your brand. Good luck!
Thanks for reading,
Kim