(c) January 12, 2010
Starting your own business is an exciting, exhilarating leap of faith—and a very empowering one, at that.
If you’re like most sole proprietors in the start-up phase, however, you will want to save every penny that comes in the door and choose your expenses carefully…at least until your revenue grows. That doesn’t mean you won’t one day have that shiny office with an expansive view of downtown and your name stenciled on the door in gilded paint. It does, however, mean you may need to make do with a less glamorous set-up until your business grows to a profitable and sustainable level.
In this two-part series, we explore where you should spend—and where you can save—when starting your new small business.
Part I: Where You Should Spend
It’s tempting—and generally wise—to cut corners when starting a small business and to choose your expenditures wisely, since it’s likely that you may not have a lot of seed money to start with and it may take awhile before revenue comes marching in the door. Don’t make the mistake of cutting corners on absolutely everything, however. Here are the things—in my own humble opinion–that you should never scrimp on (even if you’re tempted):
Going to law school and, later, working as the communications director for two large law firms taught me a very important business lesson: Don’t make a big business move without first consulting with a business lawyer. It’s important to find someone you trust, who has demonstrated experience helping small businesses like yours, and whose fees are palatable to your pocketbook. A good business lawyer will help you structure your new business in a way that makes the most sense for your business objectives, keep you on the right side of the law in your jurisdiction, and protect your business from unforeseen legal issues down the road.
This will probably be one of the biggest expenses you will incur during the start-up of your small business. Lawyers are expensive. (One reason is because, as my husband likes to say, “If the work was fun, people would do it for free.”) Just gulp now and accept it. But legal planning now will save you time, and perhaps costly problems and unforeseen “surprises,” down the road. It’s kind of like going to the doctor: a full work-up now will keep you on the healthy path toward the future.
You may also need an intellectual property lawyer to help you file any trademarks or service marks that you are developing as part of your new business. You may want to do this as soon as possible after meeting with your business lawyer, since filing trademark applications takes time and is a fairly slow and tedious process—not to mention that you will want to protect your intellectual property from the very beginning of your business venture.
Accounting and tax services.
Uncle Sam is not always the friendliest guy. Not if you mess up your taxes, that is. Spare yourself the guess-work and hire a good certified public accountant (CPA) with small-business experience to guide you through the tax process. It pays to start building a relationship with a CPA you trust; as your business grows, your accounting and tax needs also will grow in scope and complexity and you will want to rely on someone who’s been with you from the beginning, who understands your business goals and who can help you navigate complex tax laws (which seem to be getting more complicated with each passing year).
In the same spirit, invest in a good accounting system for your business so you can be organized and effective in invoicing clients, paying your bills, and staying on top of your cash flow. QuickBooks offers several easy-to-use solutions, including a starter version that is free and can be upgraded as your client base—and your business needs—grow.
It’s worth it to spend a little money on developing a brand for your new business, followed by a simple business card and Web site so that potential customers have a way to find you. My 10-plus years in the marketing and communications arena have given me a very strong bias, which I will share with you here: Hire an expert to help you. Don’t try to do this yourself if you don’t know what you’re doing. Being able to create circles in Microsoft Word does not make you a designer and plugging words together does not make you a writer—and, if done poorly or sloppily, it will make you look ridiculous. And, for pete’s sake, that handwriting font that looks like a little kid scribbled with a pencil should be outlawed. Just…don’t go there.
Hiring a graphic designer, a writer or a marketing/communications consultant can make all the difference between giving the impression of being a strong, successful, professional, contemporary business or a rinky-dink, unprofessional business that’s running out of someone’s back bedroom…and looks like it. And, frankly, if you are a client seeking to hire a sole proprietor, which company will you trust more with your business, based on first impression alone?
You need not hire a costly agency to help you. There are some outstanding freelance designers, writers and consultants (I like to think I am one of them) who have award-winning experience and who, because they are freelancers with low overhead, can offer you a better price than some of the flashy agencies and creative services firms. Some may even be willing to barter services with you as a cost-effective solution.
A post office box.
If your office is in your home, you will want to consider renting a post office box from the local post office or mailing-related store (such as Mailboxes, Etc., or The UPS Store). Since you will want to keep your personal mail separate from your business mail, this is one way to ensure that happens. And, if you work from home, you probably won’t want to broadcast your home address to strangers who visit your Web site. A p.o. box gives you a business presence, and a place to direct your mail, while protecting your privacy at home. Generally, post office boxes are available in a variety of sizes and the cost to rent a box is commensurate with the size.
Stay tuned for Part 2 in Thursday’s issue of The Daily Rung, where we highlight some areas where you should save money in starting up your new business venture.