After I quit my job I immersed myself in everything shoes and business. My first task was to get a non-disclosure agreement in place with the factory. Kathleen talks a lot about this in the book (she should call it the manufacturer’s bible) but, I didn’t have her book at the time so I was muddling through with only Mary as my guide. Mary had informed me that I should only send my drawings to them with the NDA in place. I hired a lawyer for this as I couldn’t find any generic NDA’s that I thought would work. That was my thinking at the time, looking back I realize I could have saved some serious money if I had put together one on my own and had my lawyer look it over.
While working with my new lawyer she suggested that I needed to change from a sole proprietor to an LLC. I had already officially opened my business with a DBA. I opened a business banking account, I had already obtained my business license and my resale license. Once I switched I needed to make sure all the above changed as well. I can’t tell you which is right for your situation regarding the Sole vs. the LLC. I have seen both positive and negative ramifications but, in the end I am happy with my LLC status. The resale license definitely helps to establish your commitment to the trade, I haven’t used it as much as I would like yet but most suppliers won’t take you seriously without these things. It’s a hassle that you are better off being done with at the beginning.
Get yourself a good accountant, I had always done my own accounting but things get much more complicated when business comes into the picture. I still do all the accounting (I need to be aware of what’s going on with my money) but I check in quarterly with my accountant and he makes sure I’m not making mistakes. He also does my taxes and I wish I would have hired him sooner. He is possibly one of the most honest and thorough people I have met and I am glad to have him take on the burden.
Even if you are good with money (which I like to think I am) a good accountant will know tax laws that you have no way of knowing regardless of how smart you are. Caution, find a good one through referrals from people you trust. The reason I ended up finding my current accountant is that I ended up with a giant tax bill because I went with a referral but once I met the guy I had a very bad feeling about him, it was more than a bad feeling I actually attempted to leave his office at one point. I ignored my instinct because my husband worked with this guys wife and he didn’t want to offend. Big, Big, Big mistake, the guy ended up almost costing me close to thirty thousand dollars, luckily the whole mess wouldn’t stop drawing my attention and I hired my current accountant to do an amendment and because of him we found huge mistakes and turned out the IRS owed me instead of the other way around. Heed the warning be very careful with the people that watch your money.