Most aspiring entrepreneurs have big dreams about their new venture. They know exactly where they want to go, but they have no idea where to start.
It's an understandable dilemma. Back when I started my real estate investing business, I remember having some pretty huge ambitions, but no tangible direction on how to actually take that first step.
What I found in my first year was that there were a few key pieces of “business infrastructure” that simply had to be in place in order for my little company to function the right way (and this infrastructure applies to almost any type of work-at-home, “solopreneur” business).
Lucky for you and me – it's fairly easy to implement things and they all play an important role in protecting our personal interests and helping our businesses to function seamlessly, day in and day out. Let's get into it…
1. Setting Up Your Business Entity
There are several reasons why it's important to set up an actual business entity for your company rather than acting as a “sole proprietorship” (a set up that offers virtually no tax advantages or personal liability protection).
Most real estate investors (myself included) run their businesses in the name of an LLC, aka – Limited Liability Company, and there are a few reasons why:
- An LLC offers instant credibility with many of your customers.
- An LLC can protect your personal assets against legal action.
- An LLC has tax advantages that allow your business profits & losses to pass through to your personal tax return (whereas most other corporations are double-taxed).
There's actually a lot more to it than just the 3 advantages (I'm hardly even scraping the surface here). When I was first trying to familiarize myself with the different types of legal entities and what each of them were designed to do, I was able to get a VERY good overview of it from this book (just be sure to drink plenty of coffee before you get started).
If you'd like to set up a new LLC for yourself, you can do it manually in most states through your state website (just Google: “Register a new business in <<State Name>>”), or you can try a more user-friendly option like Rocket Lawyer (aff link).
In most cases, it will make sense to form your business entity in the state that you plan to do business in – but don't take my word for it. If you have questions about how this process works (or if you just want someone to handle the entire process for you), just talk to a qualified attorney in your area. It will cost more to go this route, but sometimes it's worth the money to know that it's being done right.Here's a quick overview on how to do it:
As with anything, when it comes to incorporating your business, there is more than one way to skin a cat. I'm not saying you need to use a service like Rocket Lawyer, it just happens to be a vehicle that makes the process very easy and inexpensive.
If this tutorial looks like something you can do – then feel free to give it a shot!
2. Setting Up Your Business Phone Number & Voicemail System
If you're running your business like I am, you're going to come in contact with a lot of people over the course of a year. Buyers, Sellers, Vendors, Contractors, the list goes on…
Unless you want to open up your personal life to strangers who don't belong there, you need to take a few steps to segregate your business lines of communication from your personal life. There needs to be some very clear boundaries on who can and can't reach you at certain hours of the day and certain days of the week – and you can set up some of these boundaries with a cloud-based phone service.
I've used RingCentral (aff link) for the past 6 years and it has worked pretty well for me, but there are several other options out there if you do some searching.
I know some folks who have tried to rely on free phone services like Google Voice. I'm not saying this can't work – but in my experience, I've found that these free services just don't have the same kind of customization settings (including toll-free numbers and faxing capabilities) that will get the job done.
I use two different 888 numbers in my RingCentral account – one for the buying arm of my business and one for the selling arm of my business. This kind of setup is completely optional (you could just as well use one local number for everything), but I've found that separate, toll-free numbers are helpful in controlling the flow of communication to & from my business and projection the right image to my callers, depending on why they're calling me in the first place.
If you choose a paid service, be sure to record your greeting(s), create some extensions and set up the answering rules (i.e. – when you're “open for business” and when you're willing to accept calls). The ability to set up these kinds of rules is a HUGE luxury. It will take some time to do it the first time – but you only have to do it once and believe me, it's worth the effort on the front end. If you aren't sure how to do this – I'll show you have to handle this in just a few minutes on RingCentral…
3. Setting Up Your Business Mailing Address
Almost every week, I'm reminded of how important it is to have a business mailing address that is separate from my home address.
For the same reason I don't want strangers calling me when I'm not working, I also don't want strangers showing up at my house for any reason – EVER.
If you're planning to send out a direct mail campaign to hundreds of people, ask customers to send you monthly payments in the mail, or make a contractual offer to anyone (all of which require your mailing address), you'll have some even stronger reasons to take this step.
How can you set up a different physical location at which you receive your mail? You can do this by renting a mailbox at a local store like Pakmail, the UPS Store or even your local Post Office. I'd suggest that you find the most convenient location that you're likely to drive by on a weekly basis and simply rent one of their mailboxes. You'll have to pay a monthly or annual fee for this (I currently pay $144 per year for mine) – but the cost 100% worth the value you'll be getting from it.
If you want to take this kind of remote mailbox to the next level, you can even go with a service like iPostal1, Earth Class Mail or Virtual Post Mail. With services like these, you can get everything scanned to you electronically without ever leaving your home!
Cool Trick: If you choose one of the store front options like Pakmail or the UPS Store, you can refer to your mailbox as a “Suite”, “Unit” or “Apt” – as long as you include the number of your mailbox. So for example, if I rent box #132 at my local UPS Store, my address could look like this:1234 Manhattan Drive, Suite 132 New York, NY 10458
Little do my contacts know – if they ever come looking for my “Suite”, this is all they're going to find:
Believe it or not – I've had more than one occasion where various individuals have showed up, in person, at my business mailing address (i.e. – my local Pakmail store) looking for me. Luckily, this whole system is designed to give business owners like myself a sort of “anonymity” (because the good folks at Pakmail aren't allowed to give out my real location). Of course, these kinds of visitors are quite rare – but as you can imagine, this kind of “veil of protection” is still a huge benefit!
Another side benefit of these store front mailboxes is that if anyone ever needs to deliver a package or envelope to you that requires a “sign off” as proof of receipt – the store employees can do this for you. In a sense, it's almost like having a free secretary to act the gatekeeper for anyone who is trying to reach you or deliver something to you in person and this can be a major value-added service that is absolutely worth paying for.
Keep in mind – even though these are some very good investments to make as you're getting started, it is entirely possible for you to earn your first dollar before you have these things in place (in fact, I'd be willing to bet that most new businesses get started without them).
I would definitely recommend these steps for any new entrepreneur, but not at the expense of inaction. If you're can't do it all today, don't let it hold you back from getting started. The point is NOT to give you a list of obstacles to overcome before your first transaction. The point is to give you a clear idea of what the basic infrastructure for most work-at-home businesses should look like (especially if you're serious about growing and making money).
If you're starting out on a shoestring budget like most of us do – don't feel like you NEED to pay for all of these things before you can do your first deal. Just keep them near the forefront of your mind and try to nail them down with the first few dollars you make from your new business.