Establishing a Bank Account

Always Always Always keep personal banking separate from business banking. Once you mix the two it opens up a can of worms from a liability standpoint.

As you get started and before you start earning income, you will have to fund the expenses of starting a business.  It may seem silly to have to make a transfer from personal to business for a $10 per month web site payment. But in reality you need to transfer from personal to business first, then make the payment from business account. Again, if something goes wrong from a liability perspective, a plaintiff attorney will say you are doing business personally which makes you personally liable for business related debt.

There are two types of businesses bank accounts:  "Doing Business As" (DBA) and everything else.  A DBA is you doing a business in lieu of using your name. It's a separate account number but acts the same as a personal account. In New York State, you must register your DBA so do that first. See "Registering Your Business" Blog.

Always sign the checks in your business name, rather than your personal name. This may seem silly but just do it.  If someone questions or stops you, sign the business name first then your name as the Managing Director.

If you get the "everything else" account, this is a checking account in the name of your LLC or corporation. LLC is the way to go if you don't know what else to do. I recommend remaining a DBA until you actually make some cash then transferring over to an LLC simultanteous to taking a cash payment from your business. It only takes an hour or less to form an LLC in New York State.

Also, get your Tax ID. You don't need to be an LLC to get a Tax ID.  More on that in the "Registering Your Business" blog as well.

Open the account with about $100 and keep making owners equity deposits biweekly until you can cash out.  You will need about $1,000 - $5,000 in the account per year in order to cover overhead costs. Costs include your phone, transportation, insurance, professional fees, etc.  Anything you can charge to the business (legitimately), do it.

Creating a Legal Business Entity

If you feel confident about how to launch a business in New York State, go straight to the link and create your business.

Here's the link: http://www.dos.ny.gov/corps/

If you are new, don't get overwhelmed with the process.  New York State is a bitch to do business in. If you're not careful, they will bill you for not filing your taxes even if you don't have any revenue. The saying "if you can succeed here, you can succeed anywhere" is certainly true in business.

In order to register your business first choose your name. See our choosing your business name blog.  Next register it, preferably as a LLC.  This will give you instant credibility.

Follow the easy steps below. Don't get overwhelmed with reading everything. Keep it simple.

1) Do a name search:      http://www.dos.ny.gov/corps/bus_entity_search.html
If your name is available, Great!

2)  Get your tax ID: http://www.dos.ny.gov/corps/ein_taxnumbers.html
This is like a social security number for your business. Use it to seperate your business from personal. The government uses it to track the taxes you are responsible to pay as an employer and business owner.

3) Create your business:  http://www.dos.ny.gov/corps/llcguide.html
It's best to do an LLC.  This helps establish credibility and also begins the separation of personal from business liability.  You can form it the moment you are about to collect a payment.  You can do a DBA up until then. Lawyers may not like this advice. It really depends on when you begin to incur liability.

Be sure to set up a file at home and keep all of this in it.  I am in the habit of scanning everything and keeping it in my google drive.

Accounting Must Haves

In order to run a real business you need to watch your money to the penny. You must watch it everyday and be ready to balance the books. It used to be that you balance the books at the end of the month. As a person with ADD, I find it better to balance them everyday.  Before you say WTF, balancing can be automated through several tools.

Your banks online banking.
Depending on your bank, you will have an extensive online banking system that allows you to track your spending. This is important.

Quickbooksonline.com
Quickbooks is a pain in the ass, but its the lesser of all evils. Don't bother looking for free bookkeeping systems; they simply don't exist at the capacity you need.

If you plan to grow your business and eventually invest in yourself, you need to use quickbooks. The desk top version is recommend but I love the ease of use of the online version.   Quickbooks will allow you to export to Turbotax.

Turbotaxonline.com
You will love doing your taxes after you do them on Turbo Tax for the first time. Give it a try. Setting up the account is free and you only pay when you submit your taxes. Even then, if you are due a refund, they deduct the costs from your refund so you never actually have to come out of pocket. For as much as I think Intuit products are a pain, this product wins a huge kudos in my opinion.

Mint.com
Mint is great for tracking and categorizing expenses; however, even more importantly, they provide you with credible partner opportunities with creditors and other business related businesses.

It's free and subsidized by advertising. The ads are surprisingly relevant and are one of the few add driven web sites I actually use.

New York Real Estate Investing

I wrote this blog for friends and family and anyone else that's been picking my brain for how to do what I do. There's no secret.

There's no particular order, so i'd recommend reading the headings and figuring out where you are in the process.

The key to success is balance. Make sure you have a day job or other steady income before trying to do this. This is great for a stay at home mom or non working spouse.