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| Aug 09, 2007 1:57 pm |
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re: re: re: re: Creating a company run from home |
Laura Wheeler
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It is very much about choices, and direction. Out here, I could have taken the route you did, but I think it would have been much harder due to differences in the marketing demographics of farspread rural communities. There are other factors within our business model that would make subcontracting a less viable option than employing also - fairly complex dynamics involving our target market, pricing, and available skilled freelancers since much of what we do is unique.
I never wanted to grow beyond a small, home based business either, until about a year ago. My goals in a few areas changed, and I began to perceive the entire concept of our business differently. It became about not just me, but about our family - my husband and I together set the goal of developing a company that grew beyond the home, and which grew to hire employees. We envision a company of 100-200 employees, with two divisions which provide some very innovative services. We also want to bring employment to our town - again, a complex and twisted issue, but because we live in a dinky town that has stagnated for 20 years, providing jobs and bringing students here is an important part of our goals.
And we do have to sign as the responsible party on any corporate loans - this can be true of corporations that are not startups also - any time the banks feel there is an unacceptable risk. But we are careful anyway about how we use credit, we limit it to certain types of expenses, and to specific amounts. It has to be something that will improve the business monetarily.
I agree that misperceptions are common, and that some people do incorporate for the wrong reasons. If you intend to be less than 100% honest and ethical, a corporate structure will offer you no more legal protection than any other structure, and it really won't make a difference otherwise unless you do plan for major growth.
We have found that the bookkeeping, taxes, and other aspects really aren't more difficult, or much more costly than for a sole proprietorship. The differences are really minor. The biggest change was when we first incorporated, moving everything from the sole proprietorship to the corporation books, and getting all the stuff figured out the first time around for state and federal employment taxes.
It was fairly simple with the IRS - when you get your EIN, they send you everything you need to know - sometimes the instructions are not clear, but between their information and Payroll services from Intuit (not expensive), it wasn't hard.
Wyoming though, was like navigating a minefield in the dark. You are required to file timely - but nobody tells you WHAT to file. There are about 4 different entities you have to check with, and no place within the state government where they will tell you all the stuff you have to file. Further, when you DO figure out which agencies you have to go through, they don't make it easy. They asked us what we do - we wrote "Web Design", "Electronic Informational Product Sales", and "Technical Training". They called us and said, "What does that mean?". I explained in small words. The lady on the phone said, "can you send me an email and tell me what each of those things means?". I did... in smaller words. She then said, "I'm sorry, but I need you to explain better what those things are." GRRR! All she needed to do is classify each item under a state code as either taxable or not. I told her which ones were taxable and which were not, and she still acted like she was clueless! Another office sent us a form to fill out. We filled it out and returned it, and they sent us the packet that gave instructions for filing. We filed the first quarter, and then the second... and then they sent us a form, marked urgent, saying WAIT! We needed to fill out this form and get it back to them as quickly as possible! It was the same form we had filled out initially. I am now getting to know some of the people that influence how these things are operated, and at some point they are going to get an earful - along with some suggestions for simplification.
Many of these issues would have been the same for a sole proprietorship (sales tax and regulatory issues), some were due to incorporating because when you incorporate, you become your own employee and subject to unemployment, federal withholding, and worker's comp (which means you can actually lay yourself off and draw unemployment if you choose! WEIRD!).
Laura
Mom to Eight
Firelight Business Enterprises, Inc.
http://www.firelightwebstudio.com
http://www.westernhillsinstitute.comPrivate Reply to Laura Wheeler (new win) |
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