Big Questions That Almost Stopped Me From Starting a Business (and Their Answers!): Part 1
Has a big, scary question ever kept you from doing something important?
These 5 major questions haunted me for weeks, months, some - even years. Each one of them seriously threatened to keep me from ever starting my business.
How do I register a business?
How will I pay taxes (aka what if the IRS arrests me!)?
What if nobody hires me?
What if I don't make enough money?
What if I fail?
In the two years since I opened my business, I've had to answer every single one of these. And the thing is, I've learned a lot of valuable lessons in all that asking.
In part one today, we'll focus on the first two questions and next week, I'll share the rest with you.
So, how do you actually register a business...?
Scary Question 1:
How do I register a business?
So I was generally pretty afraid I'd screw up registering my business in some way - whether it was the wrong form, not filed with the right people, etc.
Through poking around online, I'd determined that in North Carolina, it'd make sense to register Greatest Story as an LLC (Limited Liability Company).
I could have started a business as a sole proprietor and report that as such on my taxes. However, through talking to others, I found out that an LLC can be a smarter option in some cases as it makes it possible for your personal liability and professional liability to clearly be separate. So, it made sense for me. I encourage you to research and talk to folks about what makes sense for you and your business in your own state.
It took some googling, asking others, and $125, but here’s what I did:
Found this as a helpful guide to getting started
Filled out an Articles of Organization form found here, noted as L-01
Went in person to the Secretary of State Corporation office in Raleigh, NC
Wrote a personal check for the registration, $125
Received the certificate within a week via email and whew, done!
In the process, I noted that I’d need to pay $200 as an annual report fee each year to the Secretary of State in NC for being an LLC. I've often heard the biggest drawback between LLC and being a sole proprietor (the added report cost). But aside from the money, the process is actually pretty easy and can be done online here.
Though it seemed like a lot of red tape at first, the process was surprisingly easy and has been a breeze to update. Not a biggie. Taxes were a lot harder...
Answer: Fill out some forms + Write a Check
Actual Scariness Factor (with 10 being the most legitimately scary): 2
Scary Question 2:
How will I pay taxes?
Eek! At the beginning, I was terrified that I'd screw up my business taxes and the IRS would come take me away in a van. Seriously.
I wanted to make sure I did everything right from the get-go. To me, that meant making sure I had a great tax person do my first business tax return. Unfortunately, I started out by getting advice from the WRONG person (actually, wrong people). For me, finding the right accountant was all about trial and error, and the third time was the charm.
Here’s my frightful tale of the 3 tax people:
Traditional accountant only wanted business as usual
I started with a referral to an established local accountant. It took a meeting or two for me to realize that this person had zero interest in helping someone green like me start a business. My emails went unreplied to and phone calls were never returned. Eventually and awkwardly, the message was received: he didn’t want me as a client. Hey, no worries - I get it - I'm bugging you. I moved on as tax time got closer...
Hip hometown accountant totally “understood” me, then disappeared
I was over the moon when I had a meeting with an accountant in my hometown. She was awesome - she loved my business and was so excited about working together. She welcomed all my newbie questions. Great! I'm all set!
Full of hope, I sent off my first question via email the next day. Then ...crickets. Tried for a few weeks to follow up by phone and email to no response. Got it. You’re too busy for me or not interested. Thanks for the confusing mixed messages. (Is this a thing with all accountants? I couldn't help but wonder!)
The local, semi-retired accountant (and my friend’s dad) saves the day
With tax season scarily close, my good friend Jenn reminded me her dad is an accountant who works with small business owners. So I had one last beacon of hope.
Jenn's dad is an old school, sarcastic tax guy from New York. And thankfully, he’s exactly the kind of person I had been needing in my corner! Sandy is super experienced, creative but balanced about taking deductions, and affordable. But what I love most is this: he is happy to answer any question I have - in person, by phone, or by email - regularly.
Having someone I can actually ask questions of, especially when their answers could dramatically affect both my business and personal lives, is worth every penny (and more). He saves me at least as much as I pay him each year just through his knowledge and willingness to advise me anyway.
The Answer: Research like crazy, meet with a lot of accountants, find the right one, ask questions, and stay on top of documenting expenses as much as you can.
Actual Scariness Factor (out of 10): 9 (year one), 3 (today, more worried about keeping up with receipts than the IRS van scenario)
And the moral of the tale of the tax people...
Answering the big, scary tax question was intense. It had a good answer, it just took a lot of asking. In 2+ years, I have learned a lot about taxes and how they relate to business planning (thanks to Sandy mostly) but I learned something else that was really valuable from this experience: how to treat clients.
Business Tip: If someone’s not a fit for you, it's ok not to take them on as a client. It's better not to, in fact, as you just read. The thing you should do is be polite and refer them to someone who might be able to help.
Expecting someone to just “get” that you’re not interested in helping them is clearly confusing, frustrating, and in practice, comes off as rude. It erodes your reputation, whereas being straightforward and referring someone makes you a hero while keeping your client load the way you want it. That’s a win-win for everyone, especially you.
More scary questions next week
So today we answered two of my five biggest, scariest questions that almost stopped me from starting my business:
How do I register a business?
How will I pay taxes (aka what if the IRS arrests me!)?
And here's what's left:
What if nobody hires me?
What if I don't make enough money?
What if I fail?
Even scarier, right?! Next week, I'll be back with Part 2 to tackle the rest and what I've learned from all this asking.
