Ready to be your own boss? Read the considerations in this overview to get started!
Note: The following steps may or may not be chorological for you, depending on where you are in your self-employment venture.
- Follow the proper protocols to register your business and trademark.
If you’re working as a sole proprietor (where you are the “company” and have no company name other than “John Smith”), great! There’s a lot less legal hubbub in sole proprietorship. And if you’re just starting out, sole proprietorship is the way to go until you’re established and growing.
If you’re starting or transitioning to a full business with a partner or with employees, you’ll have to settle on a name first, which is often harder than filing the paperwork. Once you know what to call yourself and how you’ll look, you’ll need to follow your state’s particular laws to ensure compliance. Visit your state’s government website. If you don’t see what you need, call their general helpline or visit your local library and ask a reference librarian to guide you to the online business registration forms. You’ll also need to determine which type of business to register for – LLC, Partnership, etc. Your choice affects your tax responsibility, and shouldn’t be taken lightly. It’s best to meet with a lawyer or senior tax advisor who can hear your individual circumstances and advise you appropriately.
- Identify your specializations.
You surely have a professional title for yourself – a graphic designer, a broker, an interior decorator, a writer, a handyman, an investor – but how will you show potential clients that you can meet their specific needs? On your web site, on your printed marketing materials, and in your verbal introductions, you need to help potential clients envision how you can bring them success.
Weak: “I’m an interior designer.”
Strong: “I’m an interior designer who creates home offices that maximize productivity.”
Weak: “I’m a graphic designer.”
Strong: “I’m a graphic designer who creates one-of-a-kind logos.”
- Determine what you can accomplish on your own, and what you’ll need to purchase or subcontract out to others.
Unless you’re a true jack-of-all-trades who also happens to have unlimited resources, you’ll need help running your business. Start a checklist and assign names or companies next to each area, including marketing, web sites, accounting, space, and inventory/supplies. Common examples where assistance is needed includes:
- Renting or purchasing an office or shop, or preparing your home office with the right equipment
- Hiring employees
- Subcontracting other individuals or companies to complete services when your client turnaround time becomes too long
- Outsourcing incoming calls to call centers to gather basic client information and enter the information into computer systems for accurate recording keeping
- Establishing vendor accounts for reoccurring materials
- Web site creation
- Tax filing and quarterly auditing
- Legal services for initial start-up and growth crossroads
- Printing of physical marketing materials (brochures, business cards) and client gifts (mugs, t-shirts, pens, etc.)
- Begin your marketing campaign.
Consider your options, costs, and audience when determining where to advertise and how long you want to advertise on a particular channel. Online advertising, especially on Google and Facebook, is both highly effective and very controllable (both sites allow you to “pause” your campaign, unlike newspaper runs).
- Be a diligent record keeper and active business learner.
The government is more likely to audit the self-employed than an employee of a corporation. Keep track of your expenses, profits, and losses, and keep original receipts whenever possible. You’ll be paying taxes quarterly when you’re self-employed, and new rules will apply to you. Many mainstream tax corporations, including H&R Block and banks, provide reasonable (and sometimes free!) tax advisement seminars for the self-employed. You’ll also want to visit the IRS’s Small Business and Self-Employed One-Stop Resource web site to keep on top of requirements and federal changes that may apply to you.
- Network and Join.
While often deeply fulfilling, self-employment can be a scary and sometimes lonely venture. Consider joining the National Association for the Self-Employed, a powerful organization that can help with health insurance, legal matters, business grants, and finding appropriate expertise so you can succeed with minimal worry and maximum success!
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