JCasper,
Robin gave good advice. I agree with Quickbooks as a cheap and effective record keeping tool. Don't go overboard setting it up - your goal should be to make it as simple as possible to train someone else on it.
Regarding health insurance, the most cost effective plan today for an individual (or family) is a HSA assuming you are in good health. The reason being that 1) an individual must qualify for coverage, therefore the risk is pre-determined as contrasted to a small group (<50 participants) that, by law, must be offered coverage at controlled rates, and 2) the deductible on a HSA is very high, thus the insurance company is insulated from nickle and dime claims. The upside for the individual is that money into the account is tax free, and does not have to be spent before the end of the year (like FSAs). Click
here for more information.
I agree with Robin about employees - don't bring them on until you have to and when you do, make them producers (makes money) not overhead (like a bookkeeper). Contract out the overhead functions when you can no longer stay up late at night to do it yourself.
Get business insurance from your current agent or have that agent recommend someone for you. Keep this relationship local.
Robin mentions hiring/firing (implied) and vacation. Check with Oregon Dept of Labor. If Oregon is an at-will state then you can fire someone at will with no reason and no retaliation. In fact it is better to give NO reason unless there is an act for cause on the part of the employee, else any reason yo give may be construed as some form of discrimination by the employee. Unemployment insurance costs as a result of firing is another issue. Documenting employee performance in an at-will state is done only to show cause, thus denying the former employee unemployment benefits when dismissed for cause.
There is no law that says you have to give someone vacation, and even more surprising there is no law that says you have to pay someone for accrued vacation when they quit. Companies that do offer these policies do it as a way of attracting employees to join and also encouraging employees to leave in an orderly fashion. Else when an employee decides to quit, they go on vacation, then give no notice or no-show on the first day they were to return.
With employees, the only things you MUST do is unemployment insurance, workers comp insurance, and pay state and federal payroll taxes. Everything else is to attract employees.
The business may need state and local business licenses, you will need a taxpayer ID from the IRS, and you will need to register the business with your state (usually the Secretary of State). You will need to decide if it is an LLC, sole proprietor, partnership, or open corporation. The differences are in tax treatment and the choice is based on how you start it and where you want to go with it. Click
here for more info.
You probably need to file quarterly returns with the state (you must file quarterly with the fed IRS for payroll, and annually for income tax if the corporation reports it). Your state may require returns for sales tax collection, use tax (sales tax not paid for out of state tax-free purchases), payroll, unemployment, workers comp, etc. Check with the state and county websites for reporting requirements.
Make contact with your bank and see if they will offer you a line of credit. Plan to put your house up as collateral (and if married, make sure you run this by your wife first). Otherwise start opening every credit card offer sent to you and request the max line of credit while you still have a job. The SBA may be able to help, but typically want too much documentation.
A good resource for financial modeling and business planning is an excel-based package called biz plan builder. I've used it to start several companies. Click
here for more info. If you use it, don't get carried away. Use it to think about all the angles and rough out the plan. You don't need to optimize every angle.
And if you do present a business plan to the bank, and they ask if you can improve it DON'T SAY LET ME WORK ON IT. Oldest trick in the book. If you don't have conviction and believe it is already perfect then they have succeeded in uncovering your own doubt and lack of confidence. If they ask what can you do with more money? say nothing - I can't spend it and don't need it (else I would have asked you for more!)
The most important advice I can give you is be very frugal. Work out of your garage first - don't go leasing a lot of space with a fancy office and a pretty sign. In fact, if you can swing it, start lining up business while you are still employed and work evenings/weekends to deliver.
You need to be the chief salesman. Leverage existing contacts/customers. You say you have a lot - confide in one or two your idea to test the waters (and get them morally committed to giving you business when you are ready to take it on!)
Marketing at this stage needs to be word of mouth. Don't worry about spending a lot of money or effort in this area.
Just remember a few things. 1) A successful business needs a good product, but the product alone does not make the business successful. 2) You need to decide now whether you want to build a life-style business, or build up something for growth and possible sale. How you structure the business and the steps you take along the path can have a consequence, plus it is good to set your expectations now and use this to guide you. 3) Plan on giving up the next 3-5 years of your life if you want anything more than a lifestyle business. 4) The philosophy of most government agencies is to support and nurture business, not stifle it, regardless of what you may think or hear. So don't worry about getting everything right day one. As long as you aren't committing blatant fraud, they will be understanding the first time an oversight is uncovered.
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