Recently, I had a newer photographer ask me what advice I had for her for starting a business. I started to think about all the struggles I had starting out like not knowing how to get my name out there, not REALLY knowing how to run a business, and heck, even not knowing what was a fair price to put myself at. I learned a lot of things just by doing them, but then it hit me like a ton of bricks. I didn’t want to be reckless when I started this business. My answer to this newer photographer was “Get your business license, and pay your taxes.”
It probably wasn’t what she was hoping for, but the more I have thought about it over the past few weeks, the more passionate I am about my answer.
It seems like I see more and more businesses popping up all over the place. And why not? Owning your business is great, but it’s also stressful and at time, ensues panic within the best of us. It’s time consuming, but also so rewarding when it all works out. But the biggest thing I have seen over the last year is these businesses popping up, and they aren’t legit businesses.
If you start a “business,” that means you have to run it as a business.
Step 1: Get a business license.
Step 2: Get an EIN for tax purposes.
Step 3: Pay taxes.
It really is as simple as that. If you run a business, it is against the law to NOT have a business license. It’s against the law to NOT pay taxes. It’s also super dishonest. And really, how do you expect others to take you seriously if you don’t take yourself seriously?
So, to make this even easier for those that haven’t set themselves up. First off, think of a name. This name is going to be with you in the long run. Chances are, if you’re at this point, you already have a business name so it’s time to make it legit.
- Go to the Department of Revenue site for your state and register your business! You can find the Washington site here!
- Next, you need to decide if you are going to run your business as a sole proprietor, or and LLC. If you don’t know what any of that means, start doing some research!! Both have pros and cons, but for me, personally, I chose to continue to run my business as a sole proprietor.
- Then, you may need to apply for an EIN (Employer Identification Number) with the IRS for tax purposes.
Once you get those things taken care of, your next step may be to hire an accountant to make sure your paying your taxes correctly!
So all in all, it may just seem EASIER to not worry about these things, but there can pretty hefty fines and penalties for running a business without a license. Depending on your jurisdiction, it can vary. You may be closed temporarily while you get the proper paperwork taken care of. The state can also deny you indefinitely for a license, EVER, if they want to. What’s worse, if you have a client try to sue you, chance are you will lose because you weren’t legally a business. And you know the IRS, they never turn down the opportunity to collect back-taxes.
It just doesn’t seem worth it to risk all of those things. Get yo’ self a business license. Pay your taxes. And enjoy this crazy entrepreneur lifestyle!!!