Today we’re talking business set up. So many people come to me with questions around the basic technicalities, and they let themselves get really stuck on it. But in fact, the technical set up of your business can be very easy. It’s almost just a formality - what comes next is way more important! I’ll get to that in a second.
So, what do you really need to do to set up a business?
Legal set up
Firstly, you need to decide how you want to legally structure your business. Each country has it’s own rules and options about this; but most often you need to decide whether to act as an individual or to incorporate a separate legal entity through which you will run your business. Each has it’s plus side - as an individual (a sole trader in the UK) you have fewer responsibilities around taxes, but you may not be as well protected in the case of business bankruptcy as you would when you incorporate a separate company.
I always recommend hiring someone who is qualified to tell you exactly what it all means in your jurisdiction - but this shouldn’t amount to more than an hour or so of their time. There’s no need to get a lawyer on an expensive retainer or anything like that. Before you hire someone, go online and do some research yourself. Check out your government’s website for details of entrepreneurship and the different options to set up your business. Check some accounting firms too - often they will help you with your incorporation when you hire them on a retainer (see below).
The costs differ from country to country - in the UK you can incorporate online and your business will be set up within 24 hours at a cost of about £12.
Next up, you need somewhere for potential customers to find you. On the internet, the “shop front” is your website. Long gone are the days when you had to pay a designer to build your site for thousands of pounds - you can find template sites online easily and cheaply. The best option is to buy your own domain (anything from about £1 upward) and to host your website on Wordpress - this way, you own the site. Wordpress is doable by yourself - I built my first website on my own using the OptimizePress theme. It took a lot of googling and 3 days of my time, but I did it! OptimizePress 2.0 costs about $97.
Your next option is to host a website on a pre-made template site, like SquareSpace. Here, it’s much easier to create beautiful websites quickly and simply. Squarespace subscriptions start at about $12 per month - again, very affordable.
If you want to outsource your website build, on one of these templates, a website shouldn’t cost more than $500 or so to do - a virtual assistant should be able to help you.
Accounting & Tax
Finally - what everyone dreads - accounting and taxes! Again, this will depend on your jurisdiction. It’s really not that complicated though :)
I recommend you keep good records throughout your tax year, then hand it over to an accountant. I chose to hire an accountant on a retainer, so I pay them £150 per month, but that also covers business insurance and my initial legal set up. There are cheaper options out there, anything from about £30 per month for an online service.
Accounting and tax is not something to get worked up about - it’s one of the key areas I recommend you get support in asap in your business. Yes, it costs some money to hire an accountant, but think of all the peace of mind you have knowing that’s all sorted. You can use all the energy you would have spent fretting about your tax return and instead use it to build your business!
Beyond the Business Set Up
As I mentioned, the business set up is really just a formality. The next three things are far more important:
- Choosing a profitable business idea and business model
- Niching your business and nailing your message
- Marketing consistently to the right people
These three things are the only pieces which will ensure your business success. Without them, the glitziest website in the world will be useless, because no one will see it. You won’t need an accountant because your business won’t have made any money! And there won’t be much point in an incorporated legal structure if you never make any profits from it in the first place!
In order to make consistent money in an online business, you need to crack those three points above. By consistent money, I’m talking about at least replacing your current salary - my focus is on businesses that can make $5,000 per month upward.