Small Business Quick Start Guide: Lessons from the trenches

Once upon a time, I found myself unexpectedly unemployed with a wife who was a homemaker and five small children. I was the breadwinner, and I had the weight of the world upon my shoulders. Owning a business was never on my radar, but the situation forced me to become an entrepreneur. Praise God that I was not homeless in that first year. I spent a ton of money on things that I later confirmed were unnecessary. I thought entrepreneurs had to spend money to make money. I was wrong! This post is the results of hard lessons learned during almost 10 years as a business owner. This is focused on the United States, but many recommendations apply globally. I hope this helps many people like the ones I know who find themselves trying to figure out how to take the next step and prosper.

Priority Steps (First 90 days)

1. Determine a name for the business and where the business will be located. It helps to have a broad idea about the services you offer. Be specific. You will refine what you do over time, but what you plan to do now will help you select the proper NAICS code for your business. Your NAICS classification also has an impact on your risk pool for business insurance. Choose wisely. Nothing stops you from changing your mind later. Avoid aspirational services because the cost of liability insurance for management consulting is very different than the cost for software development.
2. Apply for an employer identification number (EIN) online at the Internal Revenue Service website. The United States allows small business owners to file business income on personal taxes in some situations, but separating your business life and your personal life is important. The effort helps limit exposure of personal assets if you ever have a problem with your business.
3. Open a business bank account once you have the EIN. An EIN is required for business banking. Again, you must separate your personal and business finances to leverage the benefits that apply to limited liability companies.
4. Register your business with the secretary of state for your official business address. I recommend a virtual office or Post Office box to separate your personal address from your business address. Do not forget to meet the requirements in your state: state tax identification number, workers' compensation, unemployment insurance, and disability insurance. Your accountant will confirm what you need to do in specific states if you have no employees. Failing to pay employment taxes is a quick way to go to jail.
5. Document a business plan and start acquiring resources to support the business. The plan does not need to be groundbreaking, but the plan will help you measure business performance. Continue to refine the plan. What you do today may be different tomorrow based on what you learn from running the business.

Essential service providers.

1. Business Attorney. My business attorney has saved my bacon multiple times! The importance of a retainer with a competent attorney who knows business and employment law cannot be understated. The billable hours for developing initial templates and agreements for contracts, statements of work, and other legal items will be worth the investment. My attorney reviewed enough of my agreements that I was able to develop a list of red flags to look out for. Legal fees up front are always less than litigation fees later.
2. ?Tax Accountant. Most small businesses start out as a single member LLC. Working with a tax accountant to ensure quarterly estimates are set up and filed correctly will save trouble and interest payments later.
3. Liability Insurance. You must have general and professional liability insurance to protect yourself as a business owner. Most contracts for management consulting require $1MM-$2MM in general liability and professional liability coverage. A good insurance broker is valuable to help find the right plan. Hiscox has served me well since I started the business (send me a DM if you want a referral).
4. Health Insurance. It is shocking how much health insurance costs for business owners. I use HIP Nation to cover my family (and my employees when I had staff). HIP Nation works differently than traditional insurance, but it allowed me to cover my wife and five children without breaking the bank. It is less expensive than COBRA (not recommended), private insurance, and even the marketplace plans (send me a DM if you want a referral). Supplemental insurance from Aflac has also been very valuable and affordable (thanks Dad!).
5. Self-care. You must prioritize taking care of you. This counts as an essential service. I went from football in high school to the Army to kickboxing after my military service. I was always in shape. That ended when I found myself sitting at a desk 18 hours per day trying to make the magic happen. Praise God that I ran into Cathryn Marshall and learned about her Simple Fat Burn program. It helped me lose 60 pounds and get closer to my target for health and wellness. It seems counterintuitive, but I produce better outcomes from prioritizing self-care. Recovery is necessary to help avoid being overwhelmed by all that comes with running a business. Diet. Exercise. Prayer. Meditation. Vacation. Annual physicals. It all matters!

Operations

1. Track everything to ensure you maximize deductions. Don’t spend unnecessarily. Account for all time, travel, miles, and expenses required for you to deliver services to customers. I used QuickBooks Online Small Business Solutions to get started, but many good vendors exist. Anything that can help reconcile accounts and run reports will be valuable to help measure the financial health of the business.
2. Pick something well-known and reputable for payment processing. I tried to use an independent processor to save on transaction fees. I don’t recommend this unless you have a strong payments background. Whatever you choose, ensure the processor can satisfy requirements for the payment card industry data security standard (PCI-DSS).
3. I recommend creating a YouTube channel for the business. YouTube is consistently one of the top 3 platforms for web content. You can monetize your cannel once you have 2,000 hours of watched videos. You can also create memberships and subscriptions. Consistency is the key. ?
4. Purchase a domain for the business and connect it to Microsoft 365 or Google Apps for Business. A business account provides credibility. It also allows you to configure email, data, and application security to protect communications and customer data. At a minimum, document security and privacy policies that you will follow; encrypt sensitive data; and configure DMARC, SPF, and DKIM for email security.
5. Zapier and Power Automate have been very useful now that I have a much smaller team than I did in the past. Automations need to be planned in advance. They save a ton of time once they are in place.

Recommended Reading.

Leaders are readers! Business reading is the best reading for business owners. You should read what your primary stakeholders are reading. For example, I read a ton of governance information because my primary stakeholders are board directors. These are my top recommendations for books to start a business successfully.

1. Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine (Entrepreneurship Simplified)
2. The Essentials of Finance and Accounting for Nonfinancial Managers
3. Think Again: The Power of Knowing What You Don't Know
4. Small Giants: Companies That Choose to Be Great Instead of Big, 10th-Anniversary Edition
5. This Is Marketing: You Can't Be Seen Until You Learn to See
6. Scaling Up: How a Few Companies Make It...and Why the Rest Don't (Rockefeller Habits 2.0 Revised Edition)
7. The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers
8. Made to Stick: Why Some Ideas Survive and Others Die
9. Entrepreneur magazine (I am a subscriber, but they have great complementary content)
10. Harvard Business Review - Ideas and Advice for Leaders (hbr.org) (I am a subscriber, but they have great complementary content)

God bless you and your business! Peace be with you.