In a previous blog post, I showed you 5 Reasons to Start a Micro Business. I hope it empowered you to put starting a micro business on the top of your New Year’s Resolution list.
Today however, I want to give you some tips and tricks to get your micro business up and running in this year.
1) Start as a Sole-Proprietor
This is the fastest and easiest method to getting your micro business up and running.
It means that you, the owner, are the sole person starting, running, and managing the business. Typically the name of your business is your personal full name. However, you can file the Doing Business As paperwork in your state and call your business something other than your name.
Typically all you need to start a sole-proprietor micro business is a checking account and a Tax ID (either your social security number or a Employer Identification Number).
2) Use a EIN Instead of Your SSN
When running a sole-proprietor business, you typically use either your social security number or a sole-proprietor employee identification number when conducting business. Either your social or EIN is used when opening a checking account, working as a independent contractor, and for filing taxes.
In my book, Running a Micro Business, I share three reasons for using a Employer Identification Number instead of your social security number:
- Privacy. With the growing concern of identify theft, using a EIN in-place of your SSN protects you from getting your identity stolen.
- Opening a checking account. While it is possible to run a micro business using a personal checking account. I recommend keeping your finances separate and opening a business checking account for your micro business. Most banks however require a EIN to opening a business checking account.
- The IRS Requires It. If you want to hire employees, form a corporation, or an Limited Liability Company then you will need an EIN.
3) Make Bookkeeping Easier By Opening a Business Checking Account
It’s completely possible to use your personal bank account for your micro business. But the problem with this method is it makes bookkeeping a pain!
How do you separate personal expenses from business expenses? Say you like going to Starbucks, how you do separate your personal trips from the couple of times you met a client at Starbucks? Or how you do separate getting paid allowance from your parents and the check you received from a client?
Most business checking accounts are completely free or low cost to open at large banks. Why don’t you save yourself the hassle during tax season. Open a business checking account and when you have a business expense or you receive payment from a client, you can keep track of it separate from your personal life and ensure that everything adds up at the end of the year.
So there you have it. I hope these tips can help you with running a great micro business. If you still need help with running one, maybe you should check out my book, Running a Micro Business, available on MicroBusinessForTeens or Amazon.
Carol Topp
