What does it take to TRULY be a legitimate business? Part 1
This will be a 3 part blog post. The first portion will be devoted to getting your business registered and legal, the second part will be about getting your website set up and how to have an organized workflow with client orders, receipts, and business items, and the third part will be about keys to running a successful business in my opinion and some of the pitfalls and things to avoid as well as my own personal story of how I have created a word of mouth and referral business on a consistent basis.
To start with today I want to talk about the legal part of being in business. I have given this question a lot of thought as I started my photography business almost 3 years ago and I would like to shed some light on this issue in hopes to clear up some confusion, give you the insight I have found out, as well as help you be as professional as you can be. I am speaking of starting a photography business so all the details of this may or may not apply to you depending on what your business is. However, I am confident that you will gain some knowledge and hopefully learn a trick or two to becoming a "legitimate business through the eyes of your clients, the IRS, and the state you live in.
First things first, what is your business name? NOTE-BEFORE you spend all your hard earned efforts coming up with a catchy slogan, name, and branding it is in your best interest to MAKE SURE your name is available. What a shame to go through so much effort to find out "there is another one of you out there!"
Once you have nailed that down then you can proceed with the following:
1. Buy that domain name~ www.dwellingmomentsphotography.com is mine and no one else can use it because I registered my domain name and have the rights to it. I used www.godaddy.com, but you can pick whatever domain company you would like.
2. Get all your social sites in place with your name at the same time, even if you're not planning on using them right away it's MUCH better to have them "reserved" with your name then to one day want to start something and find ...oops someone else took that name! I reserved Facebook, Twitter, LinkedIn, my website, and my blog just to name a few.
3. Register your business name with the state. You will need to find the secretary of state and the info should be on their website. You will need to fill out the form and send it in with a check for whatever that state amount is for a registered trade name. That will give you the trade name and you will appear in the register of your state so no one else can have that name. If you want to go a few steps farther, you can register your name and it will be "trademarked." That however is a different process, but just a FYI.
4. Figure out if you need a vendor's license. There are several types including a transient vendor license-each state is a little different on this. For Ohio I got a transient license-basically means that I will charge tax in the area I live in, but my work could be all over. If you have a "store front" at a specific location you can just get a regular vendor's license for your county. Fill out the form from the sales and tax website for your state or you may be able to do it online.
5. Decide if you are going to be sole proprietor or file for a FEIN tax id number. I opted for sole proprietor since there is just me and I don't currently have employees, if that changes I will adjust accordingly. If you choose FEIN fill out the IRS form and send it in.
In Ohio we have this all inclusive site to get a majority of the answers needed with a step by step checklist.
Another VERY helpful resource is the Small Business Development Center
6. What am I suppose to pay in taxes and through the IRS? First, I HIGHLY recommend you hire a CPA, that is just my own personal opinion, but if I am going to consider myself a "business" then I need to hire the professionals to protect me. A CPA is mandatory in my book to keep the IRS and the state happy as well as run a ethical business according to the state requirements.
You should be paying taxes either quarterly or annually based on the tax bracket you collect per month in taxes from your retail sales. This can be much better explained by the state tax department. They can explain what you are required to do and how you will file. For me, I just go on the Ohio business gateway website and I have an account set up to put in my taxes and they will be due in Jan of 2014.
Please feel free to post comments, questions, as well as input on if this info has been helpful to you. I want to make this an open forum so that we can help one another. I KNOW I am not the only one that has said "now what....what do I need to do next to run a business....???
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