Looking to make the transition?
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 going from “9-5” to 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 add to their natural entrepreneurship skills and journey later.
From "9-5" to entrepreneurship.
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 nine-to-five to entrepreneurship about 3 years now.
If you're still reading, let's go.
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. In short, a Holding Company (HC) will be a real asset down the road when it comes to "legally" helping you to lower your tax bill and also what will possibly be a key thing to have in asset protection strategies down the road.
I will dive deeper into Holding Companies in a separate post.
Do the same thing as the first name Operating Company name, with the second name the 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.
If you would like to save time and money, you could use services like Taylor Brands or Legal Zoom, they will do the whole entity formation for you for a fee.
VIRTUAL BUSINESS ADDRESS
Now, you want to browse the internet for a company that allows you to purchase a digital mailing business 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.
REASON YOU NEED A BUSINESS MAILING ADDRESS
When thinking about the best way to go from "9-5" to entrepreneurship, 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 different 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 digital mailing business, HERE IS YOUR NEXT STEP
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. Why? For the same reason you purchase a digital mailing business address, so 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.
You ideally want the Registered Agent's address to be displayed publicly.
FILE YOUR COMPANIES
Once you have your company names, digital mailing business address and Registered Agent 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 a Limited Liability Company (LLC) or a Corporation. In my opinion, preferably an (LLC).
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.
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 application, 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 firstname.lastname@example.org. Assistance is 100% free.
Or, you can always use Taylor Brands to handle the complete process for you for a small fee.
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.
State 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 THE LAST 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 $10k, 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 $50, $100 or $500 per week or per month, or even if you acquire it all at once, deposit the funds into your Holding Company bank account first.
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. If you are reading this until now you are way ahead of a lot of people starting out because now, you won't have to start business and hope for a ROI, you can launch with a high possibility of ROI with services that I recommend to business owners such as Google Ads.
Start off solid, connect with me for a FREE 1 on 1 consultation on Google Meets to set up your action plan to start scaling with Google Ads.
The last thing I will mention though is, 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.
DISCLAIMER: 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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