The Business of Becoming a Business
Evolution Financial Coaching
I am on a mission to help other women evolve their relationship with money and gain confidence in their decision making.
Entrepreneur. A word that is imbued with freedom and financial opportunity. As an avid swimmer, it’s one that resonates with me personally, as it quite literally means ‘swim out’ (entre) + (prendre) grasp, capture. Entrepreneurs manage, organize and take on risks of a business. They excel at navigating around business difficulties to create value – and income. So how do you know if you were meant to be one? Or are you one already but you just didn’t know it?
Case in point, I was chatting with a friend recently about the launch of my financial coaching business, explaining it was my first entrepreneurial business. My friend smiled and said, “Well, perhaps not the first, don’t you already have a real estate business?”. She was right. I’d owned rental real estate for over 15 years. Though I treated it like a business, I didn’t necessarily think of it as an entrepreneurial business. Suffice it to say, I do now!
In this article, we will discuss: the different types of businesses, the benefits of business ownership and the key steps to getting started. Jump in entrepreneur, and let’s get to work!
Business with a capital B
What is a business? If you are exchanging your time or a physical resource for money – most likely, you have a business. The IRS defines the term ‘business’ as “one that generally includes any activity carried on for the production of income from selling goods or performing services." Activities such as: teaching yoga, academic tutoring, massage therapies, driving for ridesharing companies (Lyft, Uber, etc.), marketing services or real estate rental are all examples of businesses. Simply stated, when you accept payment, with the intent to earn an income in exchange for services, products or a place for someone to live - you have a business.
Case Study: The business case for forming a company
Why might you want to establish a formal business now? Many people start businesses or side hustles as they enter mid-life and are exploring their next phase of working. This is a time when you have an established career, you know what you want to do, you know your skills and interests, and are motivated to take charge of your own destiny. My business, Evolution Financial Coaching, was the result of this very journey. I was a high-performing executive in the healthcare technology industry, but I wanted to find a way to give back to others the knowledge I had accumulated over my career – and my life. After some soul searching, I landed on financial coaching. It made perfect sense. My college degree was in business management, I’d managed many divisions of various companies and I owned a successful real estate business. Additionally, I had helped colleagues, friends and family with decisions about their benefits, for example - educating them on why tax advantaged savings are a good idea. This was the role I’d been preparing for my entire life. So I set about the process of creating my own company that would help me seamlessly exit the corporate world.
Benefits of entrepreneurship
For me, starting my own company provided not only an off-ramp from corporate America, it provided a new lifestyle. I make my own schedule, take vacations when I want, give back to my community, and serve the clients I choose. I also have a job that can carry me into retirement, provide write-offs for taxes, and allow me to continue to grow my retirement portfolio. All this while providing others with coaching to keep them on the road to their definition of financial success. This is but one example of what an encore career can look like!
Do I already have a business?
Getting started: First, determine if there is something you are doing in your life that you would like to make into a business – maybe it’s rental real estate, creating websites for other businesses, or even dog walking. Consider what you are good at, what you want to spend your time on and most importantly, what motivates you. One of my clients discovered during her coaching time with me, that she really loved working with numbers. She’s now planning to work as a bookkeeper. This is an example of a business that needs to be set up. Next, determine the steps needed to operate your business from a financial perspective. It’s always a good idea to keep your businesses financials separate. At a minimum, open a separate checking account to make and receive payments from your clients.
What is the right type of structure for your business?
Now that we’ve established that you have a business, we’re going to identify the different types of structures that might be appropriate for your specific business entity, including:
The IRS unpacks the various structures in this article. For example, if you are in business by yourself, a Sole Proprietorship (or an LLC) may be sufficient.
*EFC Best Practice* I strongly encourage my clients to consult their lawyer or accountant for guidance on selecting the best structure. While deciding on the right business structure for your operation is a key decision, it’s important to not get too bogged down in this decision and let it derail you from getting started. Most importantly, know that if you set up the business under one structure you can always move it to another one down the road.
Next Steps: Get and stay organized
Whether you use a spreadsheet, or a software tool - by using a methodology to consistently track your finances, you will have a place to put all the data for your business. This will help you stay organized and have at your fingertips, important information about the income and expenses for your business. In an upcoming article, we will discuss the data you need to track and how to review this information to gain insights about your business.
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You can do this! While it may seem complicated at first to set up your business – remember two things: One, you’ve accumulated the skills to make it happen and two, you don’t have to go it alone.
Simply schedule a free 20-minute Clarity Call on my calendar today to discuss how we can help!
Mid-February: Winter and Valentines to many, but for me it’s Tax Prep time!
Do you really want to spend the end of summer stressing out to recall where you put receipts or how to finish a task you loath?? Why not use the sleepy winter months of February and March to wrap up last year and file your taxes on time! I promise it will make you feel like a master of your finances.? ?
I too used to dread doing the work it takes to get ready for tax season – but with a few tweaks to my process and thinking – I embrace this time of year. Filing my taxes gives me the feeling of putting a final bow on last year and moves my attention to this year and the future.
One reason I didn’t like filing taxes is that there is so much information you need to have on hand to make the process feel less burdensome. So, whether this is your 1st or 50th time you are filing taxes, the information below will help you move from dread to financial master! ?Continue reading here
Get Ready for March Madness: Time to finish your Tax Filing!
Tips for Finalizing Your Taxes:?
After compiling your data it’s tax preparation time. Many of you may hire a tax professional to do this for you, but if you do them yourself, I have suggestions that can help you complete them quickly. Let’s review some tips about either hiring an accountant or DIY’ing your taxes.?
Hiring A Professional
Your first step is to decide if you need to hire an accountant or tax professional. Some people hire a professional because they simply don’t have the time or interest in doing this work themselves, or their tax situation is complicated. You may have multiple W2 jobs, income from real estate investments, child support/alimony payments, and want to ensure a professional review of your data. Whatever your reason for hiring a professional – it is fine. The cost is typically worth the stress saved!? Continue reading here.
Thanks for reading!
??Laurie Wood, Certified Financial Coach ?? Evolution Financial Coaching
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Retired Career Counselor ?? Job Skills Coach ?? Workshop Presenter ?? Helping people feel confident about their employment prospects
2 年I really resonated with this line: "I make my own schedule, take vacations when I want, give back to my community, and serve the clients I choose." This article was wonderful. Thank you, Laurie.