Which entity is best?
There are several different legal structures from which you can choose to set up your business. These are the sole proprietorship , the partnership , the LLC, and the corporation. Each has its own particular advantages and disadvantages, depending on your situation.
Bernard Kamoroff states is his book, Small Time Operator , “ There are over 20 million small businesses in this country, and most of them are sole proprietorships.” In researching for this book, I found that many VAs set up their business as a sole proprietorship . I believe that’s because it’s the easiest to set up and also the easiest to keep records for. With a sole proprietorship, you simply start doing business. This allows you the opportunity to make the decisions, run the business, keep the profits, and requires less legal requirements. As long as you run an honest business, keep good records, and pay your taxes, most VAs should be fine as a sole proprietorship. However, this is one business decision each individual VA should make for their VA business. In addition to the information provided here, go online to the message boards, attend chats, and talk with others. It will just provide the added confidence you might need to make the right choice.
Choosing a business name
Choosing a name for your business is an important business decision. Just think, every letter that goes out, every card that will be printed, every piece of letterhead that you utilize, will bear that name. Will it adequately describe you and your business?
The business name you choose should be able to enhance your business image. Your name needs to clearly express what services you provide and not limit you if you choose to expand the business into other areas, which can hold you back from achieving your full potential in those areas.
You want your clients to remember your name easily and be able to repeat your name to their clients. You get not only repeat business, but word-of-mouth as well. If your name is troublesome to remember or too unprofessional, chances are people won’t remember it. Some suggest that you might want to consider avoiding names that will begin with “The” or “An” if you plan to advertise in the Yellow Pages . Your name will then be put in an unspecific category “The” instead of the name of your company. I’ve found that this isn’t that big of a problem, but something you should at least take into consideration.
When deciding on a name, think about the impression you are leaving with your clients, “Would you want to do business with that company?” Also, it’s very important to think of the professional image you create.
Here are some additional tips:
- What best describes you and your business?
- What name is consistent with your business, yet allows for growth?
- What name isn’t too cutesy or trendy?
- What name is simple and easy to remember?
- What name reflects the professional image you are seeking?
- What name doesn’t limit your services if you plan to expand into other areas?
If you plan to have an Internet presence, which we know you do! You will want to check available domain names. We recommend not having a name too similar to another. What if that company develops a bad reputation on the Internet? You don’t want your name to get associated with it unnecessarily.
If you are planning to do advertising in the Yellow Pages , it is best to have a name that begins with one of the first letters of the alphabet. If you chose a name starting with “Virtual Assistant,” for instance, you would be listed near the end of the category. This is a definite disadvantage. Most people start at the “A’s” and work their way down. However, this isn’t to say it has to be an “A.” Just keep this in mind.
You don’t want to have the same name as another virtual assistant practice in your area. To prevent this, search your local phone book under Secretarial Services, Typing Services, and Word Processing Services to see if another company presently has this name. This won’t guarantee that no one else has registered under that name, but you eliminate the obvious ones. Also, call directory assistance in your area and the surrounding areas and see if this name is in use. You can then do a records check with the Department of State, Division of Corporations, Fictitious Names Department or the County Clerk .
Trademark : Many corporations will get their name trademarked from the U.S. Patent & Trademark Office. A business with a federally trademarked name has the exclusive use of that name. To have national name protection you might want to register your name as a trademark. To do this you will want to contact the U.S. Patent and Trademark Offices in Washington , D.C or their website at http://www.uspto.gov for further information.
Licensing and business registration
Licensing requirements will vary from city to city. In an area of south Florida , businesses are required to have a city license and a county license. Here, you get the information by calling the City Occupational Department. They need to be renewed annually and it normally costs approximately $200.00 a year. In Ohio , you contact the County Auditor ’s Office. There they send you a free business start-up kit from the state, which explains everything. There are some areas where you contact the County Clerk ’s Office. The department may change, but the procedure is basically the same. It’s simple…I promise you! And it feels so good to do. Don’t dread it as another thing to cross off the list to do to get your business started. Instead, think of it as one additional step on your journey to achieving your dream.
It’s highly recommend you get your licenses as soon as possible. In order to get your business checking account, you will likely be required to have one. Each year you will get your renewal notice a few months in advance of when it is due. Pay it promptly. It’s worth it to be able to file it away, and not worry about it again until next year.
You will want to make sure that you have insurance for your family, as well as for your business.
Let’s first discuss insurance for your business. This is something you will want to discuss with your agent. In Bernard Kamoroff’s book, Small Time Operator , he does warn that, “Some policies actually void coverage if the home is used as a business without the insurance company’s knowledge and approval.” It pays to contact your agent and get the facts.
The good news is that times have changed and home-based businesses are much more acceptable then they were years ago. If you have homeowners insurance, you could possibly get a special rider put on your insurance policy to cover your business. However, some companies require a separate policy. Your insurance agent is the best one to discuss exactly what your needs are.
Now for medical insurance; it’s important if you are not covered by your spouse’s insurance that you look into and obtain the necessary insurance for you and your family. You don’t want to go without insurance. Even if you get something with a high deductible to protect you if you would need to be hospitalized, it would save you from huge debts that neither you nor your business could afford.
Many associations offer insurance plans as part of their package. Just check thoroughly into what you are getting. The time to ask the questions is before you acquire the expense, not after. The hospital, doctor, etc., doesn’t care that you thought that this charge was covered; they just want their money.
Disaster Recovery Plan
You may never need this, and hopefully you won’t, but the smart business owner will prepare their business just in case of an unfortunate disaster. We’re talking about not only planning for backing up your computer, but also backing up your business. Viruses are a real threat to your computer. You absolutely must have a good virus program installed on your computer and you must have it set up to retrieve updated virus protection. Most will automatically retrieve the latest version and scan the computer. Also, stay updated with the news on what’s out there. Yes, it’s a hassle, but you need to know and protect yourself accordingly. When you see warnings, adhere to them and do whatever is necessary to protect your computer. I tend to go a little overboard, which drives my husband crazy, but makes me feel secure. And it’s just like the old saying, “If mom’s happy, everyone’s happy.”
Think now about ways you can prepare your business for something like this. Your insurance papers, your important company papers, backup disk, etc., should be kept in a fire-resistant, waterproof cabinet. Office supply stores sell them cheaply. In south Florida with hurricane season we are constantly reminded to do these things, but elsewhere around the country you might not be.
Another reason a Disaster Recovery Plan is critical to the success of your business is that clients are entrusting you with their work and in turn, not only can you be financially affected by this, but they could, too. They need the peace of mind of knowing that you have taken the steps to keep their files, records, and everything concerning their business safe. Also, they need to know that if something were to happen that you would have someone you have entrusted to contact them and let them know what is happening.
When completing your plan write down all aspects of your business so someone could walk right in and take over. When considering your Disaster Recovery Plan think about all aspects of your business. Take the time to write down your corporate structure, clients and contact information, subcontractors, supplies, inventory, your medical information, all insurance and policy information, equipment and your important papers. Keep a copy of all these vital papers including client contracts with your Plan. As patty Gale, co-author of The Home Office Recovery Plan: The Disaster Preparedness Guide for Your Home Business states, “A disaster-preparedness plan should be as much a part of your planning as your business plan and marketing plan. In less time than it takes to go to the movies, you will be able to complete a comprehensive document that will help get your business back up and running quickly, in the event of an emergency.”
Keeping backups of your software off-site is crucial should a disaster happen within your office that would ruin the backup devices. Can you imagine having to repurchase all your software? You will also want to keep a backup of your important documents, also off-site.
A very valuable member of IAVOA was hit by a tornado one year and unfortunately experienced the devastating effects this caused…total destruction. It took time to get insurance to reimburse her to buy her new computer. Her files and equipment were destroyed. The wonderful members of IAVOA did come through and help her out with some supplies and equipment, and that helped tremendously. But when she sent me the photos of her home and what occurred in just seconds, I was reminded how important it is to take the necessary steps now. What can you do? Do it!