Lessons From The Trenches

What I Wish I Knew Before Starting My Business:

Becoming an entrepreneur sounds sexy, until you dive in and realize how complex and confusing it is. I've been navigated the exhilarating and often unpredictable journey of starting and running a business. Looking back, there are several key lessons I learned the hard way - things that aren't typically discussed in business courses or how-to guides. I'm sharing these insights with you, hoping they'll smooth your path to success.

1. Why You Absolutely Need a Registered Agent

It took me some time to learn the importance of having a registered agent. It's not just a formality; it's a legal and tax obligation. Don't overlook this - it keeps your business legally compliant and informed.

2. The Hidden Surprise of Annual Franchise Taxes

When I started my business, I was blindsided by annual franchise taxes. I thought you just file your business taxes and you're good. Trust me, they're as inevitable as they are overlooked. They vary by state, and staying ahead of them is crucial to avoid penalties that can sting. Which has already happened to me, so try and avoid this one. It's an expensive lesson to learn the hard way.

3. Keeping Finances Tidy: The Business Checking Account

I can't stress enough how mixing personal and business finances can turn messy. Setting up a separate business checking account was one of the first things I did. Thank goodness too. It made tracking expenses and managing taxes less stressful.

4. Building Business Credit: Start Sooner Than Later

This one I'm still working on. Simply because I can't decide which business credit card to choose. But news flash you have to build business credit the same way you build personal credit. It takes time, so try and get started as soon as possible. It's also something you don't want to scramble for when the need arises.

5. Don’t Skimp on Business Insurance

I'm not gonna lie I didn't even know you needed this until a year in. But yet another thing you have to have to stay compliant.

6. A CPA: Your Financial Co-Pilot

Navigating business finances and taxes can be a maze. As a business owner you are already navigating a labyrinth, so I decided to not even take this one on. And I gotta say hiring a CPA was one of my smartest moves. They're not just huge time savers; they're invaluable advisors for financial strategy. They know ways to save you money that may take you years to figure out. Pull out the pocketbook and write the check. This is also one of those scenarios where you get what you pay for. As your company grows incrementally invest in higher skilled CPA's and lawyers as well.

7. The Professional Facade: A Virtual Address

Using a virtual address helped me create a professional image for my business while keeping my personal life private. It's an extra expense, yes, but the benefits in professionalism and privacy are worth it. If you ever need to go get a business loan or investors professionalism is key. You don't want your mom or dad's address down for your headquarters.

8. Mileage Tracking: A Necessary Pain

If your business requires you to be mobile then tracking your miles will be a challenge of yours too. Tracking every mile driven for business is tedious, but when it comes to tax deductions, it's was worth its weight in gold. Accurate records are key for legitimate write-offs. Also if you have any tracking apps you love, help your girl out and send her a DM.

9. Audit-Ready: Save Every Receipt

Newsflash your business could be audited by the IRS at any time. I also know people who have been audited, so I work hard to stay ready. But this isn't something they teach you how to do. Word of advice keep every receipt either digitally or physically and keep them organized. It's the best defense in an audit. Your CPA can also help you in this department.

10. Mixing Business and Pleasure: A Big No-No

Commingling funds is not the mistake you want to make. Keep business and personal expenses separate. The whole point of forming an entity is to financially protect yourself and just by making this one mistake you can eliminate the protection. This is crucial for financial and legal reasons. Trust me, it's a lesson best learned vicariously.

11. Timing Your Corporate Structure

Converting to a C Corp too early was a costly misstep for me. If you're eyeing investor money, patience can save you a lot in legal fees. Some investors might even foot the bill for the conversion if they believe in your vision.

12. Accounting Systems: Your Administrative Backbone

Setting up an accounting system like QuickBooks was a lifesaver, especially during tax season and when you need to put together financial documents. If you have this all setup and you do your spending in the right accounts it's as simple as hitting export to view your balance sheet. Otherwise you'll be stuck doing it by hand or hiring someone else to do it for you. It also streamlined issuing 1099s and kept my financial records in check - a blessing for me and my CPA.

These lessons from my own entrepreneurial journey are shared with the hope that they'll help you navigate your own path more smoothly. Every entrepreneur's journey is unique, but we all share common challenges. If you have your own lessons learned, I'd love to hear them in the comments.