As someone who has just started my own business, what advice would feel is crucial I get early on?
So I was told that an engineering internship job, which I was going to start on the 1st of July, is no longer going to happen because, "We have decided we no longer want to take on a new intern at this stage." This was told to me only the day before I was supposed to start and only because I contacted them to confirm I was meant to come in the next day.
So being left high and dry, and already having developed an idea of a company I wanted to try start one day, I decided to being the 'one day' forward somewhat. The business is a handyman service that puts a strong emphasis on professionalism and transparency in an industry (at least where I live) are sorely lacking. I also hope to gain an edge by applying knowledge and skills I have learnt in mechanical engineering to solve the diverse problems that the average home owner may face.
It's only been a week and a half and I have been blown away by the interest I have received. So my question is, as things kick-off, particularly from a business point of point of view as it is not my strong point, what do you feel are important things I should be keeping in mind early on? Things that are important to get in place/keep track of/keep in mind from the start.
Tl:dr started a business, already getting interest, what advice do you have?
Edit This snap has received responses a lot quicker than I thought it would. So I just want to say, if I don't actually say it in a response to you, I really appreciate you all taking the time to stop by and share insight that you have with me.
Join the Discussion
I'd say make sure to keep all your receipts (because taxes), keep track of mileage religiously (because taxes), and also be wary of taxes. Not an actual business person but I had to run my own "small business" selling stuff door to door and being able to write off a bunch of stuff as legitimate expenses required as part of running what I was doing was a life saver, but I wouldn't have been able to do that if I hadn't kept my receipts organized and tracked. And at least in Canada, we get $0.52 per kilometre required to drive for work purposes (not including the daily commute to work for regular workers though). This is just the small stuff though - I'm sure actual small business owners will have a lot more input.
Oh I'm absolutely terrified of getting taxes wrong. As a result I'm looking to maybe meet with an accountant to ask about taxes because I have this image in my head of government officials coming to arrest me due to my taxing ignorance. Not Fun!!
As for tracking milage, that is something I hadn't thought of at all, so thank you for the advice. I'm definitely going to go about that from now on. How did you do it? Did you keep a log book and enter the milage after every fuel tank top up? That's the only way I have seen someone track their milage.
For my "small business" (remember, not really) I wrote down what was on the odometer at the beginning of day and then at the end of the day when I was done driving around door-to-door. If you're doing single trips from home (home - client - return home) then you can likely just use Google maps. If you're travelling around to multiple jobs before you get home, I'd say keep track of your odometer. Don't just track it when you fuel up because as /u/YourTaxGuy says, that can get messy with mixing in personal miles versus business miles.
Awesome, I really appreciate you guys taking the time to give me some insight :)
As a tax professional, I can tell you that taxes are not something to be afraid of. If you live in the US, the IRS and most states are verrrrrrrry slooooooooow in getting around to auditing taxpayers, and when they do, very few are arrested or jailed.
As far as tracking mileage, a log book is the best idea. Writing down mileage after each fill up may or may not work, with the biggest issue being you mixing together business and personal miles. If you have a car that's 100% dedicated to your business, then yes, this would work. If not, you can keep a log of every place you drive to for a job, and find out the mileage from your home or place of business to these locations with Google Maps or something similar. You can also write down what you're paid for each job in this log, which will take care of your receipts and mileage at the same time.
I'm the tribe leader over at /t/tax here on Snapzu, and I love answering tax questions like these, so if you want to stop by and ask more there, feel free.
Wow seriously thanks for the response that was really useful even though I live in South Africa so I'm sure there are differences in the systems that I need to find out. I'll definitely pop into your tribe and take a look though.
One thing I would like to ask as a follow up question (I'll bare in mind any answer you give is related to the US and not here), if you don't mind, is about the mileage records. My car is both for personal and work purposes. So I want to ask, is a written logbook of the mileage (i.e. odometer reading before work and after) sufficient evidence of my usage of my car for work purposes? I would truly intend to be as honest as possible but surely they would expect (as the standard) that everyone is trying to cheat the system, and so expect some means to prove your claims in the logbook? This is why I thought logging with refuels were done because a lot of fuel attendants ask the mileage and so I assumed it goes on the receipt which then I thought could be used to validate your logbook. Or am I over thinking this?
Edit It should be noted that I used to suffer from sever irrational anxiety attacks and due to treatment I am doing a LOT better. Having to one day manage my own taxes was one of the triggers to such attacks. So although my fears may seem irrational ("may go to prison"), before I would never have even considered starting my own business, solely because I would be 100% responsible for my tax. So hopefully I may even become comfortablewith the idea one day haha :P
South Africa, interesting. I've had some experience with different international tax systems, but I have to admit that I've never dealt with South African taxes before. So I'll give you a perspective for how things are done in the US, but it's definitely a good idea to find a South African accountant. They should be familiar with the tax code there, and ease your worries.
From my experience with small business clients, keeping a logbook of odometer readings will put you ahead of most other businesses as far as record keeping goes. Here in the US, there are no attendants when you refuel your car, so the only time when odometer readings are done by others is when you get your oil changed or some larger repair. Because of that, the IRS has suggested vehicles that are used for business to get an oil change around the beginning of the year and again at the end of the year, and keep the odometer readings. However, if the car isn't used for business 100%, this wouldn't solve the problem of separating business from personal miles. But a logbook should take care of it.
Awesome, thanks again for taking the time to respond to me :)
keep your tax records up to date and try and update a spreadsheet every month with incoming/outgoings. You'll save yourself a massive headache when it's tax return time if you spend a couple of hours at the end of every month updating your records.
Thanks :) I hope to try get a decent system in place. I'm absolutely terrified of getting my taxes wrong. I have had a fear that one day I might end up in prison or something purely from tax ignorance. :/ Thinking of looking into meeting an accountant to get their thoughts on the matter.
You should definitely do that if this is your main income. My tax return is only ever for my self employed part time work so it's not as big a deal for me as it's not massive amounts. Good luck with it, it all seems scary at first but you'll learn as you go along and soon get into the swing of things :)
Highly unlikely. See my post above. And feel free to come by to /t/tax to ease your worries :)
Advertising and marketing are 80% of the work. Try and get it cheap or better yet free.
So far I have been lucky to get free "marketing" in the form of my dad's contacts. He has actually put me in touch with a client which has potential to bring me a lot of business as she is a real estate agent looking for someone in my line of work who she can trust to use for all the places she manages.
Otherwise, that is a side I am going to struggle with, I hate selling myself. I have always preferred the idea of my work selling itself (word of mouth) but I know it's naive to think that you can build a business solely on that as your marketing. So I have to learn to start being able to sell myself :P
It might push you back a few months, but if you're not planning on hiring a book keeper, take an accounting class at a local college or community college. I don't know if you need the whole degree, but being aware of money in and out is critical for business. And between the account journal and the receipts you keep, you should make your job really easy on tax time, plus it makes it easier to keep track of what you should have coming in and going out which makes other decisions easier.
I did accounting in high school but in my opinion that counts for nothing. I have a vague idea what T accounts are and about balancing the debits and credits. That was years ago. I actually hope to get away with using an excel spreadsheet keeping track of income and expenses because I certainly can't afford anyone for book keeping.
Don't over estimate potential customers enthusiasm for your product. I did a lot of market research and got hundreds of points of positive feedback for my $20 product. After we manufactured about 100 units we had one order that was placed. People love to say they'll buy something and then not buy it. If you're in a business that applies to this, be careful not to over estimate your market. I wish I had waited to release my product until there was overwhelming demand.
Thanks for taking the time to respond :)
Luckily my business is not product manufacturing/sales so there is a low level of initial capital required to provide my service especially seeing as I already have a lot of the tools I'll require. That said a lot of the interest received just promised interest, both in the form of "I'll definitely call on you in the future! " as well as being booked for a future date to do a job. The first of those I try not let myself consider as potential work until it comes to fruition, although I might follow up with them if I feel like it's appropriate/not imposing to do so. The second of the two I consider a little more promising as I have actively had to set aside a date for the job, I just have to hope they don't cancel.
It is a good point you make though, and I definitely think I need to keep my hopes and excitement in check to a point to protect myself from disappointment but not to an extent that it hurts my enthusiasm and as a result my work ethic because I do believe that my passion for my work adds to the clients opinion of my service. I also, at least at the moment, have active jobs already in progress.
No problem. Services can go the same way btw, you build a certain server to handle certain traffic and that traffic never comes.
"Oh man if someone made Facebook 2 I'd leave the old one in a second!"
Easy to say, hard to follow through.
Anyways wish you best of luck! When you are successful come back and let us know what/how you're doing :)