BEST WAY TO GO FROM 9-5 TO ENTREPRENEURSHIP
STEP-BY-STEP Guide
When I browse the internet on a day-to-day basis, just to see what’s going on, I can tell that a lot of people are really starting to or are in the process of obtaining detailed and exact information about how they make the transition from a regular “9 to 5er” into entrepreneurship or business ownership.
I think it’s a good thing. Some are farther ahead than some, and some may have things they might have missed or overlooked in their process. In my opinion though, most people are going to become self-employed before they reach the entrepreneurship stage. However, this is usually a great foundational step which may positively impact their entrepreneurship skills and journey later.
Let’s get into a step-by-step guide into how to transition into entrepreneurship or business ownership from your current 9 -5.
Keep in mind, other people may have a different sequence, this is just my opinion based on my experience as an entrepreneur who has started more than one business and has been through the transition from 9–5 to entrepreneurship about 3 years now.
If you're still reading, let's look at the best way to go from 9-5 to entrepreneurship.
DO THESE THINGS BEFORE YOU RESIGN FROM YOUR CURRENT JOB
Your current job/profession will play a part in the transition. Don’t leave your job until you have completed these steps. If you want to set yourself up for success the right way from the get-go, start to think of two names.
Come up with a name for the business you want to start (Operating Company). Visit your state department’s website and search for that name and make sure it isn’t already in use by another company or someone else.
The second name I recommend you come up with is a Holding Company name. I will dive deeper into what Holding Companies are used for in a separate post, and you will see how the Holding Company comes in later in your entrepreneurship endeavors, but for now, I suggest you set it up from the start, it will be much easier for you then.
Do the same thing as the first name (Operating Company Name) with the second name (Holding Company Name), search to see if the name is already in use on your state department’s website.
Once you are clear to use these two names let’s discuss the next steps.
VIRTUAL BUSINESS ADDRESS
Now, you want to browse the internet for a company that allows you to purchase a virtual business mailing address/virtual office address. These companies are not hard to find, as a matter of fact you may also be able to get this service at your local UPS or FedEx office. All you must do is have a USPS 1583 form completed, notarized, and submitted for you to start receiving mail.
They will also provide the form for you and sometimes they even have a notary that works there. If not, you can always get it notarized at your local bank, usually for free.
The reason you need a virtual business mailing/virtual office address is because you don’t really want to set up your business with your home address. Once you start operating in the public, you and your business will be exposed to all types of customers and the last thing you want is for everyone you encounter through normal course of business to know where you live.
So, it may be a good idea to have an address separate from your home to be on the public search records.
Once you have your virtual business mailing address/virtual office address set up, here is the next step.
HIRE A REGISTERED AGENT
Not a lot of people are aware they can be their own registered agent. However, most business owners generally elect to have a company who does these services perform them on their behalf, and for the same reason you purchase a virtual business mailing/virtual office address, your name and home address won’t show up on public search records. It’s much more efficient. Some registered agent companies may require you to have the company formed first, others will make it possible to hire them first, then use their information to form your company. This is the best way.
SIDE NOTE: IF YOU HIRE A REGISTERED AGENT, THEIR ADDRESS WILL BE ON THE STATE DEPARTMENT’S WEBSITE. THE REASON WHY YOU MAY STILL NEED TO PURCHASE A VIRTUAL BUSINESS MAILING/VIRTUAL OFFICE ADDRESS ALSO, IS BECAUSE THE REGISTERED AGENT ONLY RECEIVE “OFFICIAL MAIL” ON YOUR COMPANY’S BEHALF. THE VIRTUAL BUSINESS MAILING/VIRTUAL OFFICE ADDRESS IS WHERE YOU WILL RECEIVE REGULAR BUSINESS MAIL AND USE TO DO OTHER THINGS LIKE PUT ON YOUR WEBSITE, OPEN BANK ACCOUNTS ETC. FIND OUT IF YOUR REGISTERED AGENT DOES BOTH. THERE MAY BE A SEPARATE CHARGE FOR THE USE OF THEIR ADDRESS FOR REGULAR BUSINESS MAIL.
FILE YOUR COMPANIES
Once you have your company names, virtual business mailing address/virtual office address and registered agents set up, you are now going to use that information to register your companies with the state.
Register your Holding Company first. The Holding Company can be an LLC or Corporation. Visit your state department’s website. You can do this yourself or if you need help you can search for companies that provide these services such as Inc-file or legal zoom. There are others so just keep looking.
After you register your Holding Company, register the company that you will be using to conduct business with (the operating company). Make sure you register the operating company as majority owned by the Holding Company that you registered first, usually 51% or more but, I recommend making the operating company be wholly or 100% owned by the Holding Company.
OBTAIN EIN
Once you have your companies registered with the state, you should have your company ID. You can now go ahead and apply for your EINs (Employer Identification Number). You can do this yourself by visiting the IRS.gov website, in the search bar type EIN, click search, then select apply online. This should take about 5 – 10 minutes and is also free of cost. You can then elect to have a copy of your approved EIN mailed to you or you can print it online immediately.
If you need help with this, feel free to reach out to me at webwideentrepreneurs@gmail.com. Assistance is 100% free.
OPEN A BANK ACCOUNT
Now that you have your companies registered with the state and have obtained your EINs, decide which bank you would like to have your business bank accounts set up. Set up bank accounts for both companies. Some banks may require at least three important documents along with your identification of course.
Registration document
EIN (Employer Identification Number) document
Operating agreement document
The operating agreement SHOULD be made later if it’s not required by the bank to open the accounts, otherwise, you will need your EIN document and your registration document.
You can have a simple operating agreement created with companies such as legal zoom or rocket lawyer documents.
THIS IS AN IMPORTANT STEP
FUND YOUR COMPANY
While at your current job. You should be figuring out how much it is going to cost you to start doing actual business. Let’s say it will cost you $10,000.00 to start the business, that is the goal you should be working towards in terms of saving or acquiring. However often you can, if it’s $500 per week or per month, or even if you acquire it all at once, deposit the funds into your Holding Company bank account.
Once you are ready to begin operations with your actual operating company, use the Holding Company/Parent Company funds to fund the operating company to begin operations.
Put effort into launch marketing and generating awareness for your services/products. You may want to stay at your current job until you at least break even and are able to start generating some returns. If you go through with all of those steps, I am confident that you will know when it’s the right time to leave your current job.
It’s all about strategy and timing. Good luck with your transition from 9-5 to entrepreneurship.
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The information in this blog post is for entertainment purposes only and is not intended to be legal advice. The business landscape is constantly changing, and laws and regulations get changed and or updated regularly. Before you make any decisions about your business, talk to a tax professional and or an attorney.
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