My daughter is a doula: she supports moms in the birth process (including pre- and post- birth). What could be more fulfilling than helping parents as they bring new life into the world? For a doula, not much. How does a woman decide to become one? She may have had a doula when she gave birth, and learned through her own experience how incredibly powerful that was. Later she trains to become a doula herself, and starts offering her services to others. You may have started a company or a small practice that feels to you more like a mission or a calling, but if people are paying you for your services, hear me: you have a business! And if you want to keep doing what you’re doing, do yourself and your clients a favor and run it like one. But what does it mean to “run it like a business,” and what does it look like? Allow me some suggestions.
Get a separate email address for your business communication. This is an easy starting point, if you communicate with clients via email. If business and personal email all comes into the same place, you’re going to start dropping plates at some point. Or at the very least, you’ll drive yourself slightly nuts and waste valuable time filtering through everything repeatedly.
Consider getting a separate phone number for your business. The handiest way is to get a second line on your cell phone, so you don’t need two phones. You can customize the greeting on your business line to identify to callers that they have in fact reached your business. There are many companies that offer this type of phone service, and here are a few recommended by people I know who use them, but you may want to google for reviews of each:
- Sideline: $9.99/month. I use this, and it’s working well for me. (See Pricing page for features)
- Google Voice – Free!
- Grasshopper – $24/month.
- Smartline through GoDaddy – $3.99/month for 100 minutes talk time.
- Phone.com – $12.99 per month, or $9.99/month if you pay for a full year at a time.
- Line2 – $8.30/month billed annually.
Set up your business entity to protect your personal assets. This may sound daunting, but stick with me – you can do this, and it’s important. If something goes terribly awry in the course of your attempt to help a client, is there any chance you could be sued? If you are a sole proprietor (maybe you even filed a Certificate of Assumed Name to get a DBA), and you get sued, your risk is unlimited and you could lose everything you own. Setting up a corporation is probably going to be overkill for small service businesses, but there is a middle path: the Limited Liability Company (LLC). The Secretary of State in your state has information on how to form an LLC. Here is the link for Minnesota, which has the step-by-step guidance you will need to register your business by filing the form “Articles of Organization.” A couple of fields on the form that may confuse you are those asking for the Registered Office Address and Registered Agent. The registered agent is the person or office where pleadings are to be served in the case of a lawsuit and where tax or legal documents can be sent. It cannot be a PO Box. This can be your attorney, if you use one for your business. If you don’t have an attorney, online legal services provide this also, for example LegalZoom ($159/year) or Northwest Registered Agent ($125/year). It is possible to be your own registered agent if you are physically present at that address to receive the communication; although that has drawbacks, it is not illegal to do so. You must file an annual renewal every year. The original filing fee in Minnesota is $135, but the renewal is free unless you allow your registration to lapse and it needs to be reinstated. The hassle factor aside, it’s vital to erect a wall of protection (sometimes referred to as the corporate veil) to separate your personal assets from those of your business.
Next, I’ve said it before, but I’ll say it again: Have a separate business checking account (and separate credit card account, if you use that in your business). You can read my earlier blog post for a longer rant on that.
Obtain a Federal Tax Identification Number (FEIN) before you apply for a new business checking / credit card account. For a business account, the bank will probably require this, along with a copy of your filed Articles of Organization. The IRS Online FEIN Application will only take minutes to complete, and it’s free!
Manage the money! Keep track of what comes in and what goes out. You can use software specifically designed with a non-accountant business person in mind. Two that are commonly used, both cloud-based (you want that) are:
- Freshbooks – Free 30-day trial. Then $15/month for 5 clients, $25/month for up to 50 clients, $50/month for up to 500 clients (10% savings if you pay annually). Customer support: You can get a personalized walk-through, and they have a toll-free phone number answered by a live person in Toronto.
- QuickBooks Self-Employed – Free 30-day trial. Then $5/month for 3 months, afterward $10/month. A handy mileage tracker is built in. And if, in spite of my earnest pleas to do otherwise, you still keep your business and personal money in the same checking account, you can separate them in the app. There is also a running calculator that will provide you with your quarterly estimated taxes. Customer support: Only provided through online chat.
These are not fancy double-entry accounting systems (they work more like the running balance in a checkbook), but they have many features you will appreciate and use. For example, you can send invoices, and get basic reports to see what is happening in your business on an ongoing basis, and much more. That beats getting surprised once a year at tax time. We’ve all heard that “cash is king.” It is. You might be profitable on your Income Statement, but if too much money is tied up in excess inventory, or people aren’t paying you, or the cost of your supplies has gone up, you need to know it. You want to avoid being one of the small business bankruptcy statistics. To do that, you need decent reports on an ongoing basis.
Obtain general liability insurance. I recommend Hiscox Insurance, unless you can get a better deal through the same company you insure your home and car through. Why incur this expense? The short answer is that unless you have a trust fund, you cannot afford to be without it.
Get and keep your head in the game through ongoing learning. There is so much to know about running a successful business, and one way to build capacity and depth of understanding is by listening to others who are a little further along on the road. I suggest listing to podcasts, which can be done while driving or folding clothes (we don’t take care of business ALL the time). Of the endless possibilities, here are a few I’ve found helpful.
- Small Biz Ahead – This is put out by an insurance company, of all things, but they cover rubber-meets-the-road topics for small business owners.
- Christy Wright’s Business Boutique – Geared toward women, but something for everyone.
- Marie TV – OK, not a podcast, it’s a weekly web TV show, but she invites wonderful guests, and you’ll be surprised what you can learn. (Don’t be put off by the fact that she looks so perfect and put-together, but you can’t find your keys. She’s actually down to earth, and she asks terrific interview questions.)
- Michael Hyatt, Lead to Win – Leadership, important if you’re not a solopreneur.
- “Beyond the To Do List” hosted by Erik Fisher, for those of us with too much to do in a day.
Look for industry specific podcasts too, which will meet you in whatever trench you find yourself. Please, keep helping the world and bringing your energy and compassion and unique skill to those who need it. Just be smart too, so you can keep doing it into the distant future.
Shameless plug: If you are planning to scale your business at some point, and will need a more robust accounting system and a bookkeeper to go with it, please contact me when the time comes so we can talk to see if we are a good fit for each other. Quickbooks Online is the exclusive software I use, and I can offer you 50% off your subscription for Essential or Plus versions.