So you’ve decided to jump in & start your own interior design/decorating business. Way to go! Deciding to take the leap is sometimes the hardest part. I took me 2 years before I decided to jump in because I was so scared. Scared of not knowing what to do, where to start, and flat out failure. But you know what? Once I started taking little steps in my business the easier it got. I quickly learned things that worked & didn’t work. Looking back there are a lot of things that I did out of order because I just didn’t know any better. Now, you’ll make your own mistakes & you’ll learn from them, but it’s my hope that I can save you some time by learning from the mistakes that I have already made.
Before we get to the fun part of creating your own design business, like what services you’ll offer, your logo & web design, we’ve got to start with the not so fun part….like business structure. You first need to decide on how you will file your business as with the state. Will you be an SP, GP, Corporations, LLC, LP, LLP? Here is a quick breakdown of each of the structures to help you narrow down how you’d like to set yours up.
- Sole Proprietorship: run by one natural person and in which there is no legal distinction between the owner and the business.
- General partnership: formed by two or more people; the owners are all personally liable for any legal actions and debts the company may face, unless otherwise provided by law or in the agreement.
- Corporation: a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law.
- Limited Liability Company: It is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.
- Limited Partnership: consists of a general partner, who manages the business and has unlimited personal liability for the debts and obligations of the Limited Partnership, and a limited partner, who has limited liability but cannot participate in management.
- Limited Liability Partnership: some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence.
Take time to talk with a tax professional and/or business attorney to ask any questions. They can also guide you on which structure will be best for you. From there, set it up through your state. And while you are at it, go ahead & get your sales tax permit. If you don’t need it now, you’ll need it at some point in the near future. Your state Comptrollers office should have all the information you’ll need on getting your tax permit.
Now, once you get set up through the state, you’ll need to go ahead & set up a business bank account. You won’t be able to set it up right away because you’ll need to show proof of your business to the bank, but go ahead & start researching what all you’ll need to open a business account with your preferred financial institution. Most require a minimal deposit & proof of your business formation (you’ll get this letter once you are officially set up with your state). While you're waiting on that letter, go ahead & start your social media accounts & creating your website. I'll be discussing all this stuff in a later post.
What are you waiting for? Get to work on this simple, yet very important part of the beginning stages of your business! You can download my FREE checklist to help get you started.