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Accountants, lawyers, and doctors, oh my! A designer’s guide to business.

Accountants, lawyers and doctors oh my

Before I get started I want to stress a few things. First and fore most, it should ALWAYS be your goal to run your business 100% legally. This means paying ALL your taxes and following ALL laws. If you truly want to achieve great success with your company, it’s best to do it right (as right as possible) from the very beginning. You do NOT want to end up like Enron or Martha Stewart; cheating on your finances, getting caught and going to jail. If you start your business by cheating it will be a very hard habit to get out of.

This Tutorial will cover:

Starting a business can be VERY intimidating. You need money to live on. You need money to buy equipment. You need to find customers. You need to comply with all state and federal laws – and trust me, they do NOT make this easy on you. You need to pay taxes. You need to pay your employees. You need to provide benefits and you need to keep your customers happy. So, why on earth would ANYONE want to start a business? You would have to be crazy right? Well… maybe, maybe not. I’m going to give you my BEST advice on how to start a company (specifically a design firm) the RIGHT WAY. Now, this is NOT how I started Go Media. I did it all wrong. But if I had to do it over again – this is how I would do it.

General Strategies:

As a designer that creates brands (logos, color schemes, etc.) I have had the opportunity to work with a LOT of start-ups. And each time I start working with a new company, it’s the same story; they walk through my door and say: “I need you to design me a logo, letterhead, envelopes, stickers, t-shirts, a website and posters for my new business.”

And when I ask them why they need all that stuff they simply say: “Because I’m starting a business! Don’t I need all that stuff?” So I’ll ask: “How often do you even print and snail-mail a real letter that will require letterhead?” To this question they think for a while, then begin to realize; maybe they DON’T need to spend all that money to get their company started.

I suggest to all my clients: “Ask yourself, what do you TRULY need to start your business?” I suggest spending as little money as possible at the beginning. If you’re a graphic designer you don’t need much: a desk (this could be a piece of plywood and two saw horses), a computer, some power and one customer. That’s it. You don’t need a team of lawyers or a payroll company or an accountant – not yet.

Let’s face facts, if you’re just starting your company – you aren’t making any money. And if you’re not making any money yet, why go spend a small fortune on things like setting up a corporation or getting a trademark on your logo? In my opinion I would “fly below the radar” when you’re first getting started. By “flying below the radar” what I mean is: don’t worry about legal stuff or taxes or anything you don’t understand. I am ABSOLUTELY NOT suggesting this as a long-term company strategy. This is JUST about when you’re getting started.

Lawyers are expensive. Accountants are expensive. Taxes are even MORE expensive. And if you’re just getting started – these things can make getting started impossible. At least, it can make getting started so unsavory that you’ll just decide to not try. Well, that’s no fun at all. So, for now – I’m suggesting that you NOT worry about a vendor’s license. Don’t worry about taxes. Don’t worry about getting trademarks or protecting your company logo.

When you’re FIRST getting started, you should only be worried about one thing: MAKING MONEY. Until you can figure out how to make money, you don’t have a business. And the faster and better you can get at making money, the easier the rest of building a business will become. Because once you’re making money, you can HIRE THE HELP YOU WILL NEED to build your company right.

My logic behind this is simple; when you’re just getting started, your company is worth NOTHING. You are making NO MONEY. You are worthless (sorry but it’s true.) Why would you start spending money on something that’s worthless? So, I suggest that you start to make some money first – then prioritize what you start spending it on. As you grow and earn more and more money – you will THEN start to invest in things like protecting your logo with a Trade Mark, paying lawyers to insure your business is set up properly and paying accountants to make sure you’re paying Uncle Sam appropriately.

Also, if your company isn’t making any money – Uncle Sam doesn’t care about it. You don’t pay taxes on zero income.

Ok, now that I’ve told you to not worry about all this stuff until you’re making some money, let’s now assume that you ARE starting to make some money. And now you do need to start thinking about how to handle the business side of your business. After all, this IS a blog about lawyers, accountants and payroll.
lawers graphic design

So, let’s get started.

What type of company should you be? Here are just VERY simple layman’s explanations of a few legal entities. Eventually you should consult a lawyer to discuss what is best for your circumstances (but once again, don’t worry about this at first.)

Sole Proprietor:

Basically, a “sole proprietor” is just YOU. It’s one person. The government needs a business to have a Tax Identification Number (TIN) to track your income and taxes paid. In the case of a sole proprietor, your social security number IS your TIN (Tax Identification Number.) It’s most likely that when you start your company – you’ll be a sole proprietor. You don’t really need to set anything up. At the end of the year, you’ll just report your income from your services and pay your taxes. Your second year you’re in business the government will make you pay estimated taxes based on the previous year’s profit (assuming you have any.)

To get your design firm started – THIS is how I suggest you do it. Be a Sole Proprietor. It’s the easiest way. Eventually you’ll want to switch over to a corporation for tax benefits, but for starters – this is it. If you need “employees” you’ll actually have sub-contractors. You don’t need to worry about paying their taxes for them –

Partnership:

A partnership is like a bunch of sole proprietors that got together and wrote up an agreement. This type of business I know the LEAST about. I think the relative strength or weakness of this business model is all in the partnership agreement. This is a legal document that outlines the exact arrangement of the partnership. A partnership agreement would include things like what each person’s responsibilities are and how the money is split up. I THINK a partnership is good for short-term business arrangements. Let’s say for instance you and your buddy are going to go sell some t-shirts at a concert that is coming into town. You’re not going to hire a lawyer to set up a corporation, but you might write out your deal with your friend; I provide the design, you pay for the printing then we split the profits 50-50. Something like that.

S-Corporation:

An S-Corporation is a particular type of corporation that is set up for small businesses. This is what Go Media is. The advantages are that it’s easier to set up and requires less annual paper work than a C-corp. This type of business entity has it’s own TIN. In layman’s terms: the company is it’s own being. The company earns the money, not the individuals. Then the company pays it’s employees. So, yes – even though I am an owner of Go Media, I am also an employee of Go Media. I get a W2 just like the rest of my co-workers. At the end of the year, any profit or loss that the company has incurred is split up amongst the owners based on the percentage of the company that they own.

So, if the company has 100K in profits and I own 50% – I get a check for 50K right? Well, not exactly. Technically – yes, that’s what’s happening. But we cannot afford to just empty our bank accounts at the end of the year. So, what ACTUALLY happens is we take just enough money out to cover our taxes, and the rest of the money stays in the bank account to finance the company into the new year.

C-Corp:

This is what most large corporations are. It gives the owners the best tax advantages. But it is the most difficult to set up and requires more paperwork than an S-Corp. While an S-Corp requires you to split up the responsibility of the profits at the end of the year, a C-Corp allows you to just leave money on the books.

There are actually many more forms of businesses – but I just wanted to give you a little starter-course. As I mentioned before – you will most likely start out as a sole proprietor. I really wouldn’t worry about this stuff until you’ve started making some money.

Finding a Lawyer to help you set-up your business:

Setting up your company should be done by a lawyer. It’s important to do this right, so you’ll need someone you trust to give you advice. I suggest starting your lawyer search with your family and friends. Does your family already have a lawyer? Do you know a friend who has a good lawyer? Even if this trusted lawyer is not a business lawyer, there is a good chance that they will know one that they can recommend.

Vendor’s License

A vendor’s license is one very early, inexpensive step you can take towards making your business legal. A vendor’s license is a way for your county to track and collect your sales tax. The exact procedure to get this license may vary from one county to another. Also, the items each county taxes may also vary. So, I will tell you how I got my vendor’s license, but make sure to check all the specific rules for your county.

The way I got a vendor’s license was to do a Google search on the term “vendor’s license” and “cuyahoga county.” I live in Cleveland Ohio and my county is Cuyahoga. The search results gave me the web address for the Cuyahoga County Auditor. The auditor is the agency that tracks sales and sales tax. So, I went down to their office and filled out a little form. Since I was starting a design firm – I applied for a “service vendor’s license.” Within a few minutes I was given a little piece of paper with a vendor’s license number. The total expense for the vendor’s license was $25 with no annual renewal fees. Now, I think I’m somewhat lucky because services do not require sales tax in Cuyahoga County. I only need to charge my customers when I sell them a tangible product, like if I broker printing.

Now that I have the vendor’s license the county knows I’m in business. Now they expect me to report my sales twice a year. Which leads me to my next subject – which you will need to have in order to report your sales to the county.

Sales Tax

Sales tax is different in each state. You will have to do a little research to find out how your state handles it. I will tell you how it works in Ohio so you have some understanding. In Ohio sales tax is paid to the county auditor’s office that the business is located in. The payment is due every six months. Fortunately for Go Media, design services are not a taxable item in Cuyahoga county (and in all of Ohio, I think).

We only need to pay sales tax on tangible items – like if we sell a t-shirt or poster.) To calculate our sales tax due I use QuickBooks. As you set up each product in QuickBooks you assign it as either taxable or not taxable. Then every six months I just run a report in quickbooks and it shows me exactly how much I sold and what I owe. In cuyahoga county they have a website where I log-in to pay my sales tax. I just type in my total taxable sales and the amount due, then select the payment option. I guess the hardest part is just remembering every six months that it’s due.

accounting bookkeeping graphic design

Bookkeeping and Accounting

Now, I know for most of you, this will be just about the most annoying part of your job. Personally, I am lucky. I was born with some strange passion for BOTH art and bookkeeping. Ok, maybe I wouldn’t call it a “passion” for bookkeeping, but I would say that it doesn’t bother me to keep business records.

So, how do we keep track of our sales; two words: QuickBooks. QuickBooks is accounting software. Before you go running for the hills screaming, hear me out. QuickBooks is a huge scary piece of software, yes, but you don’t need to use all of its many features. Try to remember the first time you used Photoshop. Did you know how to use layer masks, apply filters and run actions? No, you just knew how to pick the brush, pick a color and start drawing. Try to think of QuickBooks like that. It has tons of features you’ll largely ignore. All you need to do is make invoices and record payments. Over time you’ll start to explore and learn more and more about QuickBooks. Soon you’ll be feeling like an accounting wizard. You won’t be, but you’ll feel that way.

I won’t get into step-by-step instructions on how to use QuickBooks. You can probably find a book at the library. Like I said – start with the basics. Just learn how to make an invoice and record a payment on that invoice. This is a good enough start. As you grow, eventually if you have tons of transactions – you’ll need to hire someone to record all these transactions. But QuickBooks IS the industry standard, so starting on this will insure that you don’t have to learn new software in the future.

Also, QuickBooks offers super-cheap online credit card processing. I shopped around a while before I started running my credit cards with them. I think it’s a great value.

Finding/Hiring an accountant

As your business grows you will eventually need an accountant to help you with your bookkeeping and taxes. I have found that big firms charge lots of money and tend to work with big companies. So, I’m suggesting that you grow your use of accountants along with the growth of your business. When you first realize you could use some accounting advice, I would just start with a one-time consulting. After this, you should be able to employ an accountant at the end of the year. Basically, you’ll walk into one of those store-front accounting shops with your QuickBooks (digital) file and a big box of receipts.

They’ll tell you how disorganized you are and how you need a full time accountant. But at the end of the day, they’ll have your taxes done properly and it will be cheaper than keeping an accountant on retainer. Each time you go through this – just ask tons of questions. Most of the accounting work can be done by you in QuickBooks. So, ask questions like: “If a customer disappears on me and only half of the invoice is paid – what do I do with that open invoice?” Ask enough of those types of questions and you’ll have yourself an education!

When you realize that you are truly in need of some regular accounting help I would follow the same rule of thumb with finding an accountant as you did with finding a lawyer. Start with your family and friends. Try to get a referral. It helps to start with someone you trust. Even with a referral I suggest meeting with two additional accountants. Then pick the one you are most comfortable with. It’s critical that you pick a good accountant. They will become a trusted advisor that will help you make important business and financial decisions.

Payroll for your design firm

When you first start out (as a sole proprietor) you won’t actually have “payroll.” You will simply take money out of your bank account and spend it as you need it. The money you spend on the business will be a business expense and will not be taxed as income by the government. The money you spend on yourself will be considered your income and you will pay taxes on that. At the end of the year any money left in your bank account will be considered income and you’ll have to pay taxes on it. So, as you’re approaching the end of the year and you have some stuff you need to buy for your business, do it before December 31st! This will save you up to 35% in possible taxes on that money. This is very common in businesses; year-end spending to empty out the bank accounts.

When you eventually switch your business structure from a sole proprietor to a C-Corporation, you will be running payroll. A corporation is an independent entity. So, if you need money from your own company – that’s now payroll (income.) And when you take payroll you have to not only cut a check for yourself, you need to pay all the appropriate government agencies. These include, but are not limited to: Federal Tax Collectors, State Tax Collectors, City Tax Collectors, Social Security, IRA account (if you have one set up) and Medicare.

Now, you might think the government would organize this in some way so it’s easy to keep track all this stuff. After all, you’re paying them right? They should make it easy. But they don’t. It’s an absolute pain in the ass. Each agency has its own system, its own schedule for payments, its own rules, it’s own forms, etc. Keeping track of who you owe and when to pay them is very difficult. I ran Go Media’s payroll for one year. I probably spent 10-15 hrs a month working on it. It was ridiculous. And when the year was over I discovered that I had missed a bunch of payments and owed the government a bunch of money.

Here is the better option: hire a payroll company. They do everything for you. All you have to do is jump online and log your hours worked for each employee – or simpler, set-up salaries for regular full time employees. They will either mail you checks or wire the money into each employee’s account. They also send payments to every government agency – on time, with the correct amount. They pull the money from the company’s account to pay for everything. And for all of this, they charge Go Media about $60 per payroll ($120 per month.) If you consider I was spending 10-15 hrs a month to do this work – that’s a real bargain!

Medical Insurance

This is another one of those things that needs to grow with your company. I’ll admit, when I got started I had no medical insurance for about two years. But I was taking a huge risk. If I had gotten really sick I would have been financially ruined, possibly dead. As soon as I had a little extra cash I invested in a personal medical insurance plan. I was a healthy young male, so it was about $100/mo. Females are twice as expensive (since they can make babies.) As the company grew we switched over from a bunch of individual plans to a single company plan. This company plan saved us some serious $$$.

Summary

Well, that’s about it. Obviously, this was just a starter guide. The important thing is to focus on getting started and making money. Then, as you start to earn some money, improve the legal and organizational side of your business. The more money you earn, the more you need to spend it on getting “legit.” Obviously as your company grows in value you need to protect it by not cheating. The execs from Enron cheated. One committed suicide, the others are in jail. Ok, that was a little grim – but you get the idea. If you have any specific questions – leave me a comment and I will try to get back to you in a timely manner.

About the Author, William Beachy

I grew up in Cleveland Hts. Ohio and was drawing constantly. As a child I took art classes at the Cleveland Institute of Art and eventually became known as the "class artist." I graduated from The Ohio State University's department of Industrial Design. I have always tried to blend my passion for illustration with Graphic Design. Go Media was the culmination of my interests for both business and art. I'm trying to build a company that is equally considerate of our designers AND our clients.
Discover More by William Beachy

Discussion

We want to hear what you have to say. Do you agree? Do you have a better way to approach the topic? Let the community know by joining the discussion.

  • Mary

    Thank you very much Bill for sharing this road map for running a business when you are just starting out.
    It made me realize that the main focus is to make money first.

    Keep writing this wonderful posts !

  • Mary

    Thank you very much Bill for sharing this road map for running a business when you are just starting out.
    It made me realize that the main focus is to make money first.

    Keep writing this wonderful posts !

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  • Di

    thank you, thank you, thank you!

  • Di

    thank you, thank you, thank you!

  • http://www.fuelyourcreativity.com adelle

    Bill, this post is exactly the information I have been looking for! Great post!

  • http://www.fuelyourcreativity.com adelle

    Bill, this post is exactly the information I have been looking for! Great post!

  • http://www.gomedia.us Kim

    Nice post Bill, lots of good information in there.

    Just a note on the subject of payroll, if any of you are searching for a payroll provider, be sure to do your research. There are many many companies out there and they aren’t all the same. I have found a company that appears to offer more than our current provider at a lower price. Feel free to send me an email if you want a recommendation!

  • http://www.gomedia.us Kim

    Nice post Bill, lots of good information in there.

    Just a note on the subject of payroll, if any of you are searching for a payroll provider, be sure to do your research. There are many many companies out there and they aren’t all the same. I have found a company that appears to offer more than our current provider at a lower price. Feel free to send me an email if you want a recommendation!

  • http://www.mrchevere.com Jorge G Chevere

    Sick and awsome post. I want more more post jejejejejeje
    thanks Bill.

  • http://www.mrchevere.com Jorge G Chevere

    Sick and awsome post. I want more more post jejejejejeje
    thanks Bill.

  • http://www.jagdesignideas.com Joel G

    Bill,

    thanks for sharing your experience on these topics! I’ve been running my business for about 10 months now, and I didn’t even think (or know) about a vendors license from the county! Alot of great advice – thanks.

  • http://www.jagdesignideas.com Joel G

    Bill,

    thanks for sharing your experience on these topics! I’ve been running my business for about 10 months now, and I didn’t even think (or know) about a vendors license from the county! Alot of great advice – thanks.

  • http://www.colorburned.com Grant Friedman

    Great article! This is one of those topics we all think about but never talk about.

  • http://www.colorburned.com Grant Friedman

    Great article! This is one of those topics we all think about but never talk about.

  • jaime.radar

    definitely an extremely informative post. i filed as a sole proprietor for the first time (for 07), but luckily i had 1099s for all of my work. i have to start using quickbooks for the 08 year, and i’m not looking forward to trying to straighten out the past 6 months of transactions.

  • Chantwan Jackson

    Simply awesome info, Thank you.

  • Chantwan Jackson

    Simply awesome info, Thank you.

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  • jaime.radar

    definitely an extremely informative post. i filed as a sole proprietor for the first time (for 07), but luckily i had 1099s for all of my work. i have to start using quickbooks for the 08 year, and i’m not looking forward to trying to straighten out the past 6 months of transactions.

  • Nicole

    You forgot to mention that as a sole-proprietor there are some great benefits to incorporating into an S-corporation, mainly the distribution & salary split. Usually as a freelancer you get hit twice as hard with taxes because you have to pay self employment tax – which a normal w2 employee only pays half of while their company pays the other half. To alleviate some of this tax burden you can split your earnings between salary (which you pay Social security and medicare on) and distribution (which is only subject to income tax). And because there is only one shareholder and technically no employees, you are exempt from a lot of the business burdens like unemployment tax and what not. Definitely something that you need to consult an accountant for but good to know there’s ways to take advantage of the system. Also, Freelancer’s Union provides lower cost health/vision/dental insurance to members although eligibility depends on where you live, but currently is available throughout NY and some of the other new england states.

  • Nicole

    You forgot to mention that as a sole-proprietor there are some great benefits to incorporating into an S-corporation, mainly the distribution & salary split. Usually as a freelancer you get hit twice as hard with taxes because you have to pay self employment tax – which a normal w2 employee only pays half of while their company pays the other half. To alleviate some of this tax burden you can split your earnings between salary (which you pay Social security and medicare on) and distribution (which is only subject to income tax). And because there is only one shareholder and technically no employees, you are exempt from a lot of the business burdens like unemployment tax and what not. Definitely something that you need to consult an accountant for but good to know there’s ways to take advantage of the system. Also, Freelancer’s Union provides lower cost health/vision/dental insurance to members although eligibility depends on where you live, but currently is available throughout NY and some of the other new england states.

  • Robo-Funk

    This is what i’m talking about! Finally an in depth guide for business! I’m completely stoked now, and have more pride in starting my own.

    Thanks!

  • Robo-Funk

    This is what i’m talking about! Finally an in depth guide for business! I’m completely stoked now, and have more pride in starting my own.

    Thanks!

  • http://www.gomedia.us Bill

    Hey Nicole,
    Thanks for that insight. Yes, one thing that most employees don’t know is that your company pays for some of your taxes! And you don’t even know about it. Let’s say for instance that you earned $1,000 and from that income you see $300 taken out for taxes. You assume that the money taken out of the company’s bank account is $1000 right? $700 sent to you and $300 sent to the government… right? Wrong. Actually, a corporation has to match several of your taxes (like Social Security.) So, when you earn $1000, your company probably has to pay out of it’s accounts closer to $1100; $700 for you and $400 for the government! Crazy huh? I never knew that until I WAS the “company”.

    Of course, if you OWN the company…. having the “company” cover a percentage of the taxes really doesn’t save you anything. If it’s your your company then that’s still your money that’s being paid to the government.

    Nicole is also right about taking “distributions” (income-tax free money during the year.) But there needs to be a balance. You can’t take all your income as distributions to avoid taxes. This will get you into big trouble with the IRS… I *think* two-thirds of your income needs to be regular taxable payroll and the other third can be distributions. Once again, eventually you’ll need to hire an accountant to help you with these types of details. I only know enough to be dangerous.

    -Bill

  • http://www.gomedia.us Bill

    Hey Nicole,
    Thanks for that insight. Yes, one thing that most employees don’t know is that your company pays for some of your taxes! And you don’t even know about it. Let’s say for instance that you earned $1,000 and from that income you see $300 taken out for taxes. You assume that the money taken out of the company’s bank account is $1000 right? $700 sent to you and $300 sent to the government… right? Wrong. Actually, a corporation has to match several of your taxes (like Social Security.) So, when you earn $1000, your company probably has to pay out of it’s accounts closer to $1100; $700 for you and $400 for the government! Crazy huh? I never knew that until I WAS the “company”.

    Of course, if you OWN the company…. having the “company” cover a percentage of the taxes really doesn’t save you anything. If it’s your your company then that’s still your money that’s being paid to the government.

    Nicole is also right about taking “distributions” (income-tax free money during the year.) But there needs to be a balance. You can’t take all your income as distributions to avoid taxes. This will get you into big trouble with the IRS… I *think* two-thirds of your income needs to be regular taxable payroll and the other third can be distributions. Once again, eventually you’ll need to hire an accountant to help you with these types of details. I only know enough to be dangerous.

    -Bill

  • http://www.allmylovegifts.net Sin

    A quick note to add to your comments. I’m a military wife and I run a small business to keep my career portable while my husband is enlisted. My accountant told me not to incorporate until we’re somewhere stable. According to her moving corporations across states often can become very costly.

  • http://www.allmylovegifts.net Sin

    A quick note to add to your comments. I’m a military wife and I run a small business to keep my career portable while my husband is enlisted. My accountant told me not to incorporate until we’re somewhere stable. According to her moving corporations across states often can become very costly.

  • Ruben

    Thank you! This is what I needed to hear from someone that started a business. Other business owners don’t want to talk about this kind of stuff. Thanks.

  • Ruben

    Thank you! This is what I needed to hear from someone that started a business. Other business owners don’t want to talk about this kind of stuff. Thanks.

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  • http://www.mookiedesign.com mookie

    cvery informative. i have recently started my sole pro. business and quickbooks was the FIRST thing my business advisor told me to get and learn. it IS challenging but makes me feel better about where my money is and going. good post!

  • http://www.mookiedesign.com mookie

    cvery informative. i have recently started my sole pro. business and quickbooks was the FIRST thing my business advisor told me to get and learn. it IS challenging but makes me feel better about where my money is and going. good post!

  • http://joshmmiller.com Josh

    Great post, this is just the information that I was looking for as I want to become a freelancer soon. I’ve been reading the Go Media blog for awhile now and want to thank everyone for the great posts.

  • http://joshmmiller.com Josh

    Great post, this is just the information that I was looking for as I want to become a freelancer soon. I’ve been reading the Go Media blog for awhile now and want to thank everyone for the great posts.

  • http://atomicinteractive.com Ryan

    I read in your post that “Fortunately for Go Media, design services are not a taxable item in Cuyahoga county (and in all of Ohio, I think).”

    Who did you contact for that information? We design and build websites and we are being told that we were supposed to collect sales tax for our services.

    I am not sure my accountant is correct, but i am not sure who else to contact to get the record straight.

  • http://atomicinteractive.com Ryan

    I read in your post that “Fortunately for Go Media, design services are not a taxable item in Cuyahoga county (and in all of Ohio, I think).”

    Who did you contact for that information? We design and build websites and we are being told that we were supposed to collect sales tax for our services.

    I am not sure my accountant is correct, but i am not sure who else to contact to get the record straight.

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  • frank

    Great post. Thanks for all the great info!

  • frank

    Great post. Thanks for all the great info!

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  • Brandi

    Thanks a ton for this. Strangely, I was just sitting on my couch (AKA-my home office), freaking out about whether or not I needed to hire a lawyer.

    Now feeling much better knowing I merely need to worry about finding consistent income first. (Who knew?!) ;)

  • Brandi

    Thanks a ton for this. Strangely, I was just sitting on my couch (AKA-my home office), freaking out about whether or not I needed to hire a lawyer.

    Now feeling much better knowing I merely need to worry about finding consistent income first. (Who knew?!) ;)

  • Elvis

    First time writing a reply.
    Hello from NYC………..
    2 words for you Bill, God Send!!!

    This Post and the “How to grow from a freelance designer to a full firm” are exactly the type of guidance most of us are seeking, but many successful folks, keep to themselves. THANK YOU!!!, for your continued willingness to share with the masses. I have done freelance design for quite sometime, Ive always had the dream of opening up my own firm, but didnt really know how to, other than work & promote, i really didnt quite understand the roadmap for it (not to say this is it) but your post offered me much more than i have learned in over 7 years desiging, networking & researching. With so much informationon on the web, it is easy to get steered in the wrong direction. The companies ive worked for in the past & present have fuled the never ending thirst to own my own design firm. Coming from a background in restaurant/retail management its always been second nature for me to grow the business by looking over p&l’s budgets, trends, etc., so i agree with you about the importance of financial records being maintained for tax purposes but also for you to research and see where your money is going, where its been and what expenses to control if not eliminate.

    In a Nutshell…
    Thank You a million times over…

  • Elvis

    First time writing a reply.
    Hello from NYC………..
    2 words for you Bill, God Send!!!

    This Post and the “How to grow from a freelance designer to a full firm” are exactly the type of guidance most of us are seeking, but many successful folks, keep to themselves. THANK YOU!!!, for your continued willingness to share with the masses. I have done freelance design for quite sometime, Ive always had the dream of opening up my own firm, but didnt really know how to, other than work & promote, i really didnt quite understand the roadmap for it (not to say this is it) but your post offered me much more than i have learned in over 7 years desiging, networking & researching. With so much informationon on the web, it is easy to get steered in the wrong direction. The companies ive worked for in the past & present have fuled the never ending thirst to own my own design firm. Coming from a background in restaurant/retail management its always been second nature for me to grow the business by looking over p&l’s budgets, trends, etc., so i agree with you about the importance of financial records being maintained for tax purposes but also for you to research and see where your money is going, where its been and what expenses to control if not eliminate.

    In a Nutshell…
    Thank You a million times over…

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  • Betty B.

    Another thing I would add if you’re self-employed or a small business: pay your quarterly taxes and keep track of all of your expenses. You don’t want to wrack up a federal tax debt. I got a high dollar writing/design contract in 2001 and bought a new house. The job was so demanding that I didn’t pay my quarterly taxes. I figured that was okay, because I had a big year end payment coming up from the company and would be able to pay it. Then the contract soured and the company didn’t pay the promised end of the year payment. I was stuck with a huge debt that I couldn’t pay–not just for the tax but also fines for not filing and interest. In short, it has been a nightmare for me and my family. We lost our home and just about everything–and I still owe a huge tax debt to boot. Don’t let this happen to you.

  • Betty B.

    Another thing I would add if you’re self-employed or a small business: pay your quarterly taxes and keep track of all of your expenses. You don’t want to wrack up a federal tax debt. I got a high dollar writing/design contract in 2001 and bought a new house. The job was so demanding that I didn’t pay my quarterly taxes. I figured that was okay, because I had a big year end payment coming up from the company and would be able to pay it. Then the contract soured and the company didn’t pay the promised end of the year payment. I was stuck with a huge debt that I couldn’t pay–not just for the tax but also fines for not filing and interest. In short, it has been a nightmare for me and my family. We lost our home and just about everything–and I still owe a huge tax debt to boot. Don’t let this happen to you.

  • Pingback: Moving beyond Freelancing: 4 Insights to Growing your Design Firm | GoMediaZine

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  • Anonymous

    I’m a up coming buisness owner, and your blogs has been very inciteful. i just wanted to thank you for sharing your experience with people like me. not knowing were to start and this gave me much hope that starting a buisness comes with a lot of legal aspects. thanks and i look forward to reading more of yoour blogs!

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  • http://www.drmustafaerarslan.org/ panax

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  • http://twitter.com/LisaVdesigner Lisa V

    wow, I just found this post while searching for info on graphic design sales tax in OH. I’m still sorta new to the state and learning the ropes of solo-proprietorship. Definitely have to check out all the resources on this site. So glad this came up in my search!