Starting a company - but I want the income for me

[bacterozoid]

I'm starting up a web development company. Operating costs right now are $0 since I work alone and out of my home. When I get some software out the door (soon, I hope. I've been trying to do this for far too long), I'll have maybe a hundred bucks a month in hosting + some assorted fees for lawyers and whatever.

After I make sure those costs + taxes are covered by income, I'd like to use a portion of the additional income and apply it towards things like student loans. Yes, maybe I need to talk to a lawyer about all this in general, but where do I need to start looking so I can be informed? What type of company do I form?

What if, one day, I have too much work for just me and need to hire someone?

[tylerhutchinson]

I guess to start of I would like to know what sort of company you are actually trying to design and what it all entails.

With web hosting $100 seems like a lot. I pay something like $80 a year. Do you have the page created and are you doing it yourself?

With all income you want to give yourself a salary, this will pay your living expenses and you can build into your salary money for things like debt and student loans. You obviously want to make sure you can survive. Try to stay on the salary. Any additional money, especially for the first couple years, you want to invest back into the company for better company structure, and most importantly advertising. While you can do a lot of advertising for free or little cost, it does add up. The more you spend in advertising, the quicker you should see income coming in.

You will want to maintain a work/life balance so if you start feeling overwhelmed you will want to hire someone on to help. You will also want to build this into your finances (this would go in the money that you invest back into the company).

This should all be part of a well thought out business plan. This will outline every aspect of the company. What I always do when I work with start-ups is to build them a two year budget plan and a detailed break even analysis. Build in all expenses and estimate income month to month. You want to build in additional employees. So for example, if you see your business increase 5% every month over the first year you can get a pretty good idea of your income potential and your workload so at the point on the review you see that you may have too much you build in cost to an employee.

I would not bother going to a lawyer for stuff like this. They can help in business design and starting a company. They are there for legal advise. Go to a consulting company and find a marketing company that can help you. You may need a lawyer for things such as registering your company and getting your federal information set up, but you can Google all of that and do it for free (minus fees to set it up).

There is a lot more to it, but here are at least a few things for you to think about. Starting a company is actually really easy to do if you can build a good business plan, have money to back it up, and have the drive to succeed. :)

[bacterozoid]

Thanks Tyler! Sometimes I get a little ahead of myself (I really want to pay off my debts) and don't think things through...of course a business plan is a good idea and I am most certainly going to write one. A salary is also a good idea. The loans will get paid, but you're right - I need to develop the business, too.

To expand a bit on the business: I'm writing web software that I will be hosting for my clients (other businesses) on a web server. This is why I have the more expensive hosting fees - I'll have to get some VPS hosting or even a dedicated server to ensure speed, customizability, and reliability. I'm doing all the development on my own right now.

[huggytree]

most new 'small' companies start out as a LLC

you can do this typically yourself(no lawyer) through your states website(atleast here in WI)

then find an accountant...mine took me through everything i needed to do to be a legit business

i took some business classes, but found them to be retarded...dont waste your time unless your going to take some college level courses...the business classes i found were more to help people DECIDE to go into business or not....they werent teaching you to run a business..

good luck

[bizmultiplier]

Congrats on starting the business. The advice above is great.

1. I would definitely start an LLC. This will help with a lot of write-offs
2. I would talk to an accountant and give them an estimate of how much you plan to make (salary/take home) and they'll help you calculate how much your quarterly tax payments
3. Make sure you get a separate checking account and credit card just for your business, makes it much easier to keep track of everything
4. Use something like Quickbooks or some other accounting software. It's easy to lose track of things

In regard to having to hire people, I would look for someone now (a few people actually) that is qualified, and does good work, rather than wait till you are so busy that you need someone to help. This will give you time to track their work and test them out fully. It will be less stressful when the time comes. Get yourself a good freelancer contract as well. I have one I use that I'd be happy to share with you. You will have to get it looked at by your lawyers. I've had mine go through it, but I do not want to take responsibility for anything happening to you. (Let me know if you would like it).

In this business it seems to go in waves at times. You're either slammed or it's dry.

Good luck. I hope you have enormous success.