Archive for March, 2010

A friend of mine is thinking of starting a business.  She’s good at what she does, writes well, can read (go ahead, laugh – but how many times have you gotten replies to your emails that made you wonder if the person on the other end could read?), and wants to make money.  All those things are helpful in a business start-up.  So while I was on my wish-it-was-daily walk, I thought of what she should do if she goes forward with this.  I came up with 4 things to tell her.  Here they are:

1) Come up with a business name.  You can include your name in the business, but it shouldn’t be the entire name of the business.  Why?  Well, the short answer is that you want your business to be able to grow convincingly.  You may even want to sell it one day.  It would be difficult to sell a company named “Jane Doe, Graphic Artist” to another person – the buyer would have to change the name, and then they would lose all the name recognition you had spent years building (which is a valuable asset).  But “Doe Graphic Arts” could be owned and ran by anybody, and on a slightly different note, could easily employ countless people.  And then customers would not be surprised to hear from someone named something other than Jane Doe.

2) Make sure the .com domain name is available for your business name.  With and without dashes between the words (forget underscores).  If it isn’t available, choose a different name.  Period.  And make sure no one else is using the name, too (Google for it).  You don’t want to start your business with trademark infringement issues.  (I am not a lawyer, this is not legal advice.)

3) Reserve the business name, now.  Buy the .com domain name (I use Godaddy for that) as soon as you’ve decided, so that no one else will.  It costs less than $11 to register a domain name for a year, so just get it.  You can put your website up later.  And when you’re really ready to start, do what you need for registering the business name in your area.  For some, that would be filling out the “Assumed Name” or “Fictitious Name” paperwork at their county courthouse.  Where I live, you file the name with the state.  Whatever is appropriate, do it.

4) Then take that paperwork to the bank, and open two bank accounts in the business name.  One checking account, one savings account.  DO NOT RUN YOUR BUSINESS OUT OF YOUR PERSONAL ACCOUNT.  Just don’t.  If you are serious about your business, then be serious about the money.  The checking account is where the money you make goes in, and also where you pay the business expenses from.  And you pay yourself from there, too.  The savings account is for tax money – either daily, weekly or monthly, peel off a percentage of your income and move it from checking to savings.  Then you will KNOW you can pay your business taxes when they are due.  And there will be no chance of accidentally getting confused and spending the money inappropriately, either.  Check around for the best deal with your local banks; I discovered (after years of paying business checking account fees) that there are banks that offer free business checking and savings accounts.  I bank with them.

Of course, that is not all there is to starting a business.  But when I offer unasked-for start-up advice to my smart, savvy friend, that’s what I’ll tell her first.