By Michele Swing, SEABA Board Member
Congratulations! You have decided to become your own boss, kick the time clock to the curb, and give your final salute to your cubicle. Starting your own business is a liberating decision, one that separates you from being a mere employee to an admirable, self-employed, self-sufficient business owner. It is important to make sure your business has a strong foundation so it can flourish into the company you’ve always dreamed of.
With the economic downturn, large corporations are letting go of highly skilled and well-educated professionals. These professionals are using their experience and self-marketing tactics to create their own successful business. Lately, it’s becoming more common to see the development of both individual businesses and partnerships.
There are three key components to starting your own business: 1) a phenomenal attorney, 2) a stellar insurance agent, and 3) an amazing accountant. Call it the “business trinity” if you will.
Oh, the joy of a phenomenal attorney! Your attorney will be your right arm and your legal guide, so make sure to pick him or her wisely. Your attorney will execute the legal information of your company and help you decide which type of entity fits your company best. The different entity types include sole proprietorship, partnerships, limited liability companies, and corporations.
By now we all know we can incorporate a business online. It may be cheaper in the short-term, but do you really know what you are getting from the online service? Are the proper state provisions in place if something were to happen while doing business? How much protection do you have? If you don’t know the answers to these questions, you probably need to consult with an attorney. In most cases the cost difference is minimal and will include your corporate minutes book along with an official seal.
On to the much-needed stellar insurance agent! Your insurance agent will tailor the policies needed to protect the activities of the business. There are different types of industry-specific liability insurance. The insurance policy may include general, professional, or productive liability.
Your insurance agent will help put policies in place for catastrophic events such as fire or loss of a business partner. These are two types of events that people do not typically think about or like to think about, but need to keep in mind. With a fire, will the policy cover loss of revenue and are all the assets covered? If there is a partnership, is there a life insurance policy to cover the partner’s stock in the company?
Last, but not least, the amazing accountant. A good accountant is imperative to any business. As with the two other pieces of the “business trinity,” your accountant will keep your business financials in compliance with accounting rules and regulations.
There are a few different types of accountants. Some accountants work with financial data and preparing financial statements while others only prepare tax returns. If you are up to the challenge you can certainly keep your own books, but be aware that your tax accountant may have to do tedious clean-up work prior to preparing a tax return.
There are many professional firms who provide all these services, so make sure to do your due diligence prior to hiring these people to be part of your business team. Most will sit down with you for a free consultation and will write a proposal of their services.
Michele Swing is owner and operator of Swing Accounting. Contact her at Michele@SwingAccounting.com for a review of her services.
The Business Trinity
By Michele Swing, SEABA Board Member