Starting Your Own Business?

[Heather Dawn]

Hi,

 

So, I've been thinking of taking on some freelance work (slowly) with the goal of possibly starting my own marketing agency/consultancy. The problem is, I have no idea how to get started doing something like that - mainly in regard to knowing how to make sure I have the appropriate paperwork on hand (contracts for clients, etc.). I've been doing research online, but all I keep finding are articles about the broader process of starting an agency, not the nitty-gritty of the process. I looked at sites like Legal Zoom and Nolo, but I've read they can be iffy. Yet, I don't know if I should spend big money on a lawyer at this point. I want to start small, run it out of my home, and see where it goes before getting too deep.

 

Has anyone here started their own business or consulting agency? How about freelance contracts?

[DoF]

Take it on.......actually DO IT. Rest will come on as per needed basis.

 

The more you look into it, the more overwhelming it becomes and more you overwhelm yourself......in time, disabling yourself from succeeding. Don't get me wrong, it's important to know what's ahead and plan it proper,but it's as important if not MORE important to just do it.

 

I wish you luck

[melancholy123]

My husband and I had our own biz for 20 yrs., he's in the processing of retiring, even tho he's a bit young for that! We never had a lawyer, never felt a need, but then it depends on what your business is. You should work up a business plan. He pounded the pavement a lot before the money started to come in, and then when it going, it was non stop! I think the simpler you keep it, the better off you will be. Have a good web person if you can't do it yourself. Get that biz plan in order, make some biz cards and get out there and sell yourself! Easier said than done, but oh so worthwhile.

 

We also have a small biz online that I basically run. He creates the product, I take care of all customer contact online and on the phone. I am the shipping dept too! I put all of the kits together and send them off. It is a part time biz but getting busier all the time.

 

I recommend your own biz, at least give it a try, the rewards are tremendous in so many ways.

[Heather Dawn]

Thank you both! That was so encouraging!

 

Since this would be an agency/consultancy, it requires no overhead to start (other than a doman, which I bought, and some web space). I just feel like, with contracts and such, I'm not sure where to start. I was thinking of taking one of my current job's Marketing Services Agreement to use as a model.

[melancholy123]

Our second biz, the online one, needed almost no money to start as it was related to the first one. Overhead was really low. Use all ideas and resources you can find/think of. Alter them to suit your needs.

 

There are small biz forums online, one is called the Warrior Forum, it's really busy with all types of businesses, Google for it and read and join.

[Heather Dawn]

THANK YOU! I'm going to do that right now. I also posted to some of my marketing groups on LinkedIn - I figure they're a good source of info, as well.

[j.man]

I'd honestly just take it one step at a time. As you said, right now you need to freelance, which basically means the only difference is you'll be filling out a 1099 instead of a W2 and you'll be doubling up on FICA taxes. Your field of work is completely foreign to me, so I'm not aware of what permits or licenses you'd need simply to practice.

 

I'm a contractor and have a very small sole proprietorship (I really have no intention to grow, it just helps me get by during the off season). I don't fill out anything more for it. It's just a fancy name more or less. If I wanted to file under a nickname or business name, I'd have to fill out a form for a trade name.

 

But as long as you're going by your name and have all the licenses and permits you're personally responsible for, you should be good to go.

[Heather Dawn]

I'd honestly just take it one step at a time. As you said, right now you need to freelance, which basically means the only difference is you'll be filling out a 1099 instead of a W2 and you'll be doubling up on FICA taxes. Your field of work is completely foreign to me, so I'm not aware of what permits or licenses you'd need simply to practice.

 

I'm a contractor and have a very small sole proprietorship (I really have no intention to grow, it just helps me get by during the off season). I don't fill out anything more for it. It's just a fancy name more or less. If I wanted to file under a nickname or business name, I'd have to fill out a form for a trade name.

 

But as long as you're going by your name and have all the licenses and permits you're personally responsible for, you should be good to go.

 

Hey, j.man!

 

Thanks for the insights! I don't need any sort of permits, fortunately. Did you register as a sole proprietorship before you began freelancing, or once you had been working in that capacity for awhile?

 

I think what I really need to do is make sure my website and FB page are ready, and then get to work on the rest. One step at a time, as you said.

[sleepingdonut]

]

[Heather Dawn]

]

 

LMAO...thank you for starting my day off with a laugh.

[catfeeder]

I started contracting merely because I was offered the opportunity to learn project management from the inside, so I didn't start with a goal of hiring others. As it turned out, just contracting myself was lucrative enough for me without taking on the double-load of trying to find and manage work for others.

 

But then my experience landed me many contacts on both sides of the coin. I was offered more work than I could fill, and so I started earning finders fees for referring others.

 

Then my BF at the time, also a successful contractor, decided to start an agency. He took on actual office space from which to screen candidates and out of which he and his hires could work and conduct meetings. I was hired to start up the office with him and be billed out as one of the contractors when my skills matched a project.

 

So, word of caution: you'll need a lot of capital to sustain yourself and the payroll of others through the first year or two. Companies don't pay quickly. It's not the same as earning on a W-4 that's automatically paid through the payroll of a company or another agency. YOU are the one taking on the risks and the expenses, and so freelancing just for yourself until you earn the contacts and the money-power to manage your cashflow as a startup is the only way to keep yourself from losing everything and out of jail for not paying employees on time.

 

My BF needed to take out a home equity loan and borrow from family and friends despite having everything else BUT the cash flowing well and running smoothly. You'll need to anticipate 90 to 120 day lags in payment--and as many of those as you have people in your employ.

[Heather Dawn]

Honestly, I wouldn't mind it being just me for awhile (or forever - it doesn't HAVE to evolve into a big agency). I just need to make at least what I make at my full-time job and I'll be happy staying at that level.

[j.man]

Hey, j.man!

 

Thanks for the insights! I don't need any sort of permits, fortunately. Did you register as a sole proprietorship before you began freelancing, or once you had been working in that capacity for awhile?

 

I think what I really need to do is make sure my website and FB page are ready, and then get to work on the rest. One step at a time, as you said.

Nope. It's different if you decide to take on employees and have to deal with a payroll, but if you're simply on your own, there's no difference other than the 1099 and having a lot more tax liability. I still find a single tear rolling down my cheek whenever I write a check out to the government knowing that I used to get $2k+ back. If you don't have one already, a good accountant will come in handy for tax season. Remember that employers front half the tax for SSI/Medicare/Medicaid for you. When you're on your own, you're liable for all of it. It's an effective tax bump of about 6%, which isn't exactly chump change.

[catfeeder]

Nope. It's different if you decide to take on employees and have to deal with a payroll, but if you're simply on your own, there's no difference other than the 1099 and having a lot more tax liability. I still find a single tear rolling down my cheek whenever I write a check out to the government knowing that I used to get $2k+ back. If you don't have one already, a good accountant will come in handy for tax season. Remember that employers front half the tax for SSI/Medicare/Medicaid for you. When you're on your own, you're liable for all of it. It's an effective tax bump of about 6%, which isn't exactly chump change.

 

Yes, and I found it advantageous many years to bill through an agency from which I could be paid via W-4 rather than 1099, except for when the agency AND my contract was out of state. Otherwise, I could not only avoid all the tax issues of a 1099, as aW-4 my work weeks would also count toward unemployment benefits during periods when recessions moved in and my projects got shut down.

 

As a contractor/consultant on projects with deadlines, I worked unlimited hours within project budgets. I was not paid overtime at time and a half, but rather my billing rate was already high because I was often offered the jobs directly from the companies and I would shop the work to the highest paying agency. In addition to negotiating good billing rates, I received a commission on the job referral in addition to any referrals of candidates who I wanted the agency to hire to be on my team. At the time this was legal, but I don't know the laws now--I continually consulted with the state employment office before shopping work to ensure that I was operating legally.

 

I was usually offered permanent employment with the companies at the end of their projects, but I did better on my own and enjoyed having the agencies as a buffer. At that time I could buy my own insurance and invest in IRAs. Then my state insurance climate changed and I could not justify the private insurance expense, so that's when I accepted a VP role with a major finance firm.

 

However, now Obamacare enables insurance to be portable again, so contacting is once again a good option. I've since crossed into creative work in an art department, and I've been so happy within a permanent role that I hope to stay for many years. If that changes, I'll be back to contracting again.

[catfeeder]

Honestly, I wouldn't mind it being just me for awhile (or forever - it doesn't HAVE to evolve into a big agency). I just need to make at least what I make at my full-time job and I'll be happy staying at that level.

 

Great! This will afford you the experience to learn the ropes without a need to take on risks and overhead. Those are rarely worth it. Most startup companies fail within the first year of operation, and that's usually because they were not well funded enough and they did not anticipate 'hidden' overhead expenses, slow payers and getting stiffed on some work.

 

Billing only for yourself gives you full control while learning ins and outs, and frankly, you earn a lot more per hour when you factor in all of the unpaid admin, research and unrealized sales time involved in taking on employees. Unless you can afford to pay someone else to manage shop for you even while reporting status and going over transactions in detail regularly, it's thankless and exhausting and stomach churning to be responsible for other people's livelihoods on top of your own--unless and until you're super-capitialized and can devote yourself to sales, research and management rather than trying to bill to your own projects on top of all of that.

[Heather Dawn]

Great! This will afford you the experience to learn the ropes without a need to take on risks and overhead. Those are rarely worth it. Most startup companies fail within the first year of operation, and that's usually because they were not well funded enough and they did not anticipate 'hidden' overhead expenses, slow payers and getting stiffed on some work.

 

Billing only for yourself gives you full control while learning ins and outs, and frankly, you earn a lot more per hour when you factor in all of the unpaid admin, research and unrealized sales time involved in taking on employees. Unless you can afford to pay someone else to manage shop for you even while reporting status and going over transactions in detail regularly, it's thankless and exhausting and stomach churning to be responsible for other people's livelihoods on top of your own--unless and until you're super-capitialized and can devote yourself to sales, research and management rather than trying to bill to your own projects on top of all of that.

 

Agreed. My dream, really, would be to keep it simple - just me making a living at this as my own boss. I don't need to become rich, I don't need to become the head of a marketing empire. And I'm hoping that with this fairly modest goal, I can figure out a way to make it happen.