Continuing our series on beginning and running a small business, in this post I will touch on three first steps to take.

Structure

C-corp, S-corp, LLC? Many people make a mistake here by going too far. They think the first step to starting a business is to visit a lawyer, spending thousands of dollars, and filling out tons of paperwork. This is simply not the case. While there are times to seek legal counsel, if you are providing a service or selling a product you create at home, the steps can be quite simple. If your company name is different than your name, all you may need to do is file a single sheet of paper at the county courthouse called a D/B/A (for “Doing Business As – as in, John Smith d/b/a John’s GunSmithing”). In most cases, you do not need to create a new entity for tax filing, at least not as a startup.

Bank Account

This is a big one. I have known several people who have made this mistake. Keep a separate bank account for your business activity only. NO PERSONAL TRANSACTIONS! It is important to keep your personal and business activity separate, so you can know if you are making money and to avoid any “corporate veil” issues.

Accounting System

Whether it be QuickBooks Online, FreshBooks, or some other software package, it is imperative to have a tool for analyzing your information. You can have great fun selling your product and building your empire, but if you don’t know your most basic financial numbers, you could be in big trouble. At a minimum, you should know your cash on hand, accounts receivable, and accounts payable.

Like most things, putting down a solid foundation helps ensure success in the long run. Start with these building blocks, ask for help when needed (I’m around), and let’s get started! Leave a comment below with anything you think should be considered a first step.

As we go about continuing our series on starting and running a small business, I wanted to take a break to share some resources that focus on keeping your personal information safe. These also have the added benefit of helping reduce junk mail and keeping you out of debt. Sound to good to be true? Take a look at these:

www.donotcall.gov. This is the National Do Not Call Registry. If you register your phone number (I registered my entire family) on this list, it keeps telemarketers from cold-calling to solicit you. The process is quick and simple. It will not stop calls from charities, surveyors, or companies with which you have an existing business relationship, but it can dramatically reduce the number of solicitations you get. Not to mention annoying phone calls during dinner! Many of these calls are not even legitimate businesses, and many people (especially the elderly) have been scammed out of their personal data.

www.optoutprescreen.com. This one is my favorite. Under the Fair Credit Reporting Act (FCRA), the Consumer Credit Reporting Companies are permitted to include your name on lists used by creditors or insurers to make firm offers of credit or insurance that are not initiated by you. The FCRA also provides you the right to “Opt-Out”, which prevents these companies from providing your credit file information for these offers. Simply put, if you Opt-Out, for five years you will not receive unsolicited credit offers tempting you to go into debt. Again, I Opted-Out my entire family.

During the holiday season, you can never be too careful with you personal information. Use these two resources, and sleep a little better at night. If you would like some additional tools for running your small business, get a copy of my free e-book 30 For 30: 30 Tools to Take Your Small Business to the Next Level. Leave a comment below and share with the rest of us a way you protect your personal information. Click the share buttons to share this with anyone else.

Did you quit your job yet? Not yet? Good! Before you pack up your desk, let’s make sure we have a plan. Don’t step off the dock before you have at least one foot in the boat.

You will hear many people tell you to “follow your dream” or “find your passion”, and it is largely true. You should find work in life that you love and go after it with your whole heart. But don’t be fooled. Desire is not enough. You must also be competent at that desire. And, most importantly, there must also be demand for what you are selling. Your dream career will be at the crossroads of your Desire, your Competency, and market Demand.

So how to you decide what that is?

In his book 48 Days to the Work You Love, Dan Miller suggests you “gather flowers from those within reach”. Think for a minute – what do you do to relax after work or on weekends? What is your greatest area of service to your fellow man? What activity energizes you, rather than making you feel drained when you are finished? Start there. Do you tinker with old cars? Be a vintage vehicle shade-tree mechanic. Collect guns? Become a gunsmith. Love to paint? Paint small 5×7 landscapes and sell them on Ebay. I know of a woman who enjoyed making gift basket arrangements, so she started a business to serve people on the Labor and Delivery wings of hospitals. Start with things you know about now, and work outward from there.

It is important that you also be good at this endeavor. Trust me, you don’t want me painting landscapes. My brother is a great Emergency Physician, but don’t let him touch your computer. Competency in your field will help set you apart from the crowd. Where do your knowledge, skills, and abilities intersect? What have you always been told you were good at? Look there.

Lastly, having a desire and competency for something is great, but if no one wants to buy it (or if you don’t know how to monetize or market it well – a later post) you will not succeed. The old saying, “Build a better mousetrap, and the world will beat a path to your door” is not only horribly dated, but it is no longer true. You have to demonstrate that your product or service will meet the needs of the market. You need a platform. Serve well, and you could be rewarded with what Rabbi Daniel Lapin calls “certificates of appreciation” that look suspiciously like dollar bills.

So, dream for minute or two. Then, leave a comment below saying what type of business you think fits your desire, competency, and market demand. Writing it down is the first step into that boat. Join the journey.