Starting a New Business: The How To's, Part II | Virginia Photographer

Happy Friday, Lovelies!

Ok, so some of you know that for several months, I’ve been working on establishing yet a-n-o-t-h-e-r new business.  My family runs…. Umm, about a zillion businesses, so really, entrepreneurship/ small business ownership is in my blood.  With my first business, the photography business, however, I felt (feel?) like I was hunting and pecking in the dark for information about how to set up and grow my business. 

Before I forget things this go-round, I want to blog about the steps to become a small business owner in Virginia and Fairfax County and as a Small Business Administration certified women-owned small business.  Maybe I can refer to it when I start me next business.

This post will be "part II."  There will be several parts....

1. What is my business?

2. Speak to an accountant about legal structure options

3. File for an EIN number with the IRS

4. Open a business checking account

5.  Apply to be a corporate entity with the Virginia Corporation Commission

6.  File for a Fairfax County business license- when sale exceed $10,000

Step one: have an idea of what you want.  You’ll probably need to do “it” in conjunction with you day job, at least for a while.  Are you good at “it?”  Can you make a profit from “it?”  Do you enjoy “it?”

Small business ownership is a mom's best friend.  One of my undergraduate degrees is in women's studies, so sorry if this sounds a little leftist, but for decades we women have begged and pleaded to get the corporate world to be more family friendly.  

Has it worked?  

....ugh, maybe, but we can do so much more.  The modern world of calendars on our phones, Go-To-Meeting, and telework means we aren't chained to our desk!  We don't need to fix a broken system.  We can create our own damn system!  We can have master's degrees, push the world's intellect forward, and nurse our babies....

.... from home.  

Woah.  Dude.  The world is in your hands.  The company doesn't exist, so do it!  Be your boss.  Make it happen:)

Step 2: speak to your accountant.  For more about the need for an accountant, see here.  Another accountant recommended I become a single member LLC (imitated liability company).  Single member means that it’s just me.  I complete my taxes on my personal income tax statement instead of a separate accounting, such as other LLC structures.

Alternatively, I could become a sole proprietorship, but that legal structure is dangerous.  God forbid, but if someone died on a photoshoot, as a sole proprietorship, they could sue for my house, my car, my 401k!  I could be run into the ground.  As a LLC, legally the business is separate from me, unlike a sole proprietorship.  If something happens, my business could go under without also taking me and my family.

There are pros and cons to each legal structure, so speak to your accountant about which entity is best for you.

Step 3: File for an EIN.  Once you know which structure is best for you, you can register your company with the IRS to receive an EIN (Employer ID Number)—it’s free.  You do that here.

Step 4: open a business checking account.  Use your EIN to open a bank account.  You want a bank account because the next steps cost money.  You don’t want to draw money from your own account to pay for the business expenses of your company.  Take your EIN number to the bank and create a corporate account.  You’ll want to put a little money in the account for the next steps.  You can transfer money from your personal account to your business account.  Start with $500, if you can.

I went to PNC.  They had free business checking.  I was able to link it to my personal account for one-stop banking.  I don’t know that one bank is better than another, just go for free and convenience.

Step 5: Register to be an entity with the Virginia Corporation Commission. The next step in Virginia is to go to the Virginia Corporation Commission and register your “entity.”  You do that here.  It's $100.

Head swimming yet?  I’ll leave you with one last step, and then we’ll recess for the week.

Step 6: File for a business license. Finally, if you’re in Fairfax County, you will need a business/ professional/ occupation license.  There is a caveat to this.  If you don’t/ won’t have more than $10,000 in annual sales, there is no need for this license.  So, as you’re building your company, don’t worry about this, but have it on the goal list.

I want to be so successful I have to pay Fairfax County for a business license.  Oh, yeah, baby!

I hope this starts you thinking about the next step in your life and career.  Remember that this is only a guide.  Speak to your accountant for more information.

Don't be held back by what exists, because you can create a better system.  If I can be of assistance in anyway, let me know.  I love-love-love to feature local small businesses.