Step 1: Launching Your Virtual Company
So you’re ready to head off into the awesome world of freelance development: be your own boss, call your own shots, hire people, fire people, and rake in the money. The new freelancer is the virtual company: a team of individuals, each with their own unique talents – loosely associated with each other that come together on a project-by-project basis according to the needs of each assignment. Virtual companies are taking over the web development world. They are flexible and scalable, with low overhead and global reach. Getting up and running with your own virtual freelance business is now easier than ever. There are plenty of freely (and cheaply) available resources online to help you get started. But before you do anything, you need to make your company official. This series of articles are based largely upon my own experience in starting up a virtual company. This first segment will help you get your new business off the ground.
Consult the Experts
I highly recommend reading through The Business Side of Creativity: The Complete Guide for Running a Graphic Design or Communications Business by Cameron S. Foote before taking any steps towards your company launch. Much of what we’ll cover in the first step of this series is addressed in this book, and it will give you a good idea of what you’re getting into.
Form a Business Plan
Before you jump head-first into designing a logo, building a website, and schmoozing clients, take a step back and remember that this is a business. Without a solid plan of attack, your company will be in the red before you know it. Even if you never show your plan to anyone else, it’s a good idea to put your business goals down on paper, and to revise this plan every year. Secondly, if you ever want to convince a bank or a private investor in loaning money to your company, a business plan is mandatory. Here’s a sample business plan template to help you get started.
Choose Your Company Name and Register Your Domain
Now for the fun part. Be creative. Take into consideration the identity you want to portray. This is your brand. But keep in mind that naming your company and registering a domain go hand in hand. You won’t be taken seriously without a website, but virtually every real-word domain is already reserved, so think about spelling your company phonetically. It should be easy to remember. Dot-coms are the most desirable but they are not necessary, so consider all your options. Naming your company can actually be the most difficult step in your company launch. Take your time and find something that you know you’ll be happy with for many years. Above all, have some fun with the process. Here are some resources to help:
Register With the IRS
Ahhh, taxes. There’s no way around it. But that’s not the only reason you should make your company officially registered with the government. Having a corporate identity offers a layer of protection between you and your clients/contractors. This also allows you to keep your business and personal finances separate from each other. Having an EIN lets you present yourself to your clients as a business entity, not just a freelancer. Of course, if you’re not located in the United States, you’ll need to register with your local government, not the IRS. There are plenty of services out there that will offer to take care of this legal process for you. However, doing this yourself is not difficult at all. Everything you need is available at the Internal Revenue Service website. You can apply for an EIN here. The application process takes less then an hour and you should receive all your paperwork in the mail within a few days.
Get a Business Account
You have your detailed plan of attack, your brilliant company name, your website domain reserved at your registrar of choice, and your business registered with the government. Take a second and breath. You’re official! With your new EIN, you can and should open up a business checking account. It’s always best to keep your business finances separate from your personal transactions. While you’re at it, make sure to order some nice professional voucher checks. Consider opening up a business credit account as well to build some credit for your company. Always deposit your business income in your business account, and pay all contractors from this account. Keeping all your business transactions in one place is a life-saver when tax season comes around.
Now it’s time to form your public identity. If you’re a designer this is the most fun. If you’re not a designer, it’s time to get in touch with one. You’ll need your business basics: a logo, some business cards, and a website. The website doesn’t need to be overkill, but be sure to include the essentials: about the company, contact information, and a big call to action to get in touch with you. Your business cards don’t need to be quite so typical either. The more unique and eye-catching, the better. I order my cards from MOO, skinny little cards that are especially great for designers/illustrators/photographers.
At this point, your company is up and running! You may not have any clients available or work coming in, but your website is live and you’re ready to hand out your freshly printed business cards to everyone you meet. The hard part is over. In the next segment I’ll cover some useful web applications to help you easily run your new virtual company. Remember, you still need to manage projects, keep track of contractors, and stay on top of your invoices. If you found this segment useful, or if you have anything to add, or even if you completely disagree with every word on the page, feel free to contact me and let me know your thoughts.