So you’ve ordered your Evolv Starter kit and you’re building your own business! Good for you! Not only do you have the best spray tan machine on the market but you’ve also got the support of all of us here at Evolv that want to see you become a successful entrepreneur.
One of the most important things about running a business is protecting yourself and your finances. Being a solopreneur can be a little intimidating. But no one can do the hard work for you, and in the long run it is worth doing the research, talking to professionals and building your business on a solid foundation.
First of all, we recommend speaking to an accountant, or a lawyer. We can give you a little information on operating under an LLC or as a sole proprietor but the best advice comes from a professional who knows your business goals and your personal financial situation.
Once you’ve spoken to a professional. Make sure you open a separate bank account for your business. This makes it easy come tax time. With all your expenses and income coming and going from the same place it makes it much easier to keep track of everything you’ll need. Next you’ll want to check with your state to see what kind of business license (if any) you will need. Each state is different and you don’t want to have to shut down shop because you don’t have your paperwork in order.
Lots of Soloprenuers open an LLC. What is that exactly? LLC stands for Limited Liability Company. It is a corporate structure available in the United States where owners are not personally liable for the companies debts or liabilities. They are inexpensive to set up (around $50 with Legal Zoom) and protect your personal assets if your company is ever sued. It is still possible for the company to go into debt but it separates your personal property and assets from that of your company. Which is not a bad idea if you’re planning on serving a wide customer base. Also and LLC is beneficial if you want to expand to a business with employees.
Another common option is to become a Sole Proprietor. A Sole Proprietorship is a type of enterprise that is owned and run by one person and there is no distinction between the owner and the business entity. This is a common choice made by freelancers. It’s a good choice if you are not planning on having employees or expanding your business beyond yourself. You are responsible for all debts of your business but you are also entitled to all the profits. (After you pay taxes of course.) The downside to being a sole proprietor is the lack of legal protection. If your business was ever involved in a lawsuit, your personal assets (such as your car or home if you own it) could be seized as property of the business to pay off debts.
Both of these options have plenty of pros and cons. The best way to find out the right path for you and your business is to sit down with a lawyer or tax accountant and discuss your business plan. Remember you want to build your business on a strong foundation from the start so you can grow grow grow!