The Business Side: Establishment and Billing

7 replies
Hello all, I am planning to start a mobile marketing business very soon that offers SMS marketing, mobile websites, google places optimization, SEO, etc..

My main concern is if I should have a business license acquired before I start getting clients. Should I have a proprietorship or an LLC set up before I go into it?

And billing is also another of my concern. I am quite unsure how invoices work. I heard of two great services that automate this service: Freshbooks.com and Billingboss.com. I might very well go with Freshbooks, but I am clueless as how invoices or billing works.

Do I send an invoice and they send me either a check, paypal or cash or something? How does this get reported on my taxes? Should I set up a federal tax ID, like some sort of seperate account to handle taxes for my business?

I'm going to seek professional help from someone I know who has been a long time accountant about this. In the meanwhile, any thoughts?

I'd like to start making cold calls in as little as a week. I want to be completely prepared and i don't want to come back here saying "hey guys i have my first meeting tomorrow! what do i do?"

Anyways any help is appreciated.
#billing #business #establishment #side
  • Profile picture of the author Andrew H
    1. If it is a new business I would recommend setting it up as a sole proprietership. This is cheaper to setup. Just make sure you have bullet proof contracts because if your 'company' get sued it means they can take YOUR possessions because you are the company.

    2. I operate a local web design company and take checks/paypal/cash or even email money transfer. If its local companies this part is easy. If you are dealing with companies far away Freshbooks is a good option.

    3. Send out invoices marked "Due upon receipt"

    4. Set up your tax number if you wish to collect taxes. I know in Canada this is optional if you make under ~30k (Somewhere around there).

    5. A separate account for taxes is optional, personally I do this because then there are no surprises at the end of the year.

    Good luck with the cold calling!
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  • Profile picture of the author redlegrich
    An LLC is the safer bet, but you can do a SP to get started. Personally, I think invoicing and waiting for payment is nonsense. Payment in advance via some sort of electronic means like PayPal. Forget invoices, checks, reminding them, chasing late payments and all of that silly business. Payment up front automatically, no muss no fuss. You can invoice to get started but after that all auto bill!
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  • Profile picture of the author CPAPJason
    An LLC is okay for asset protection, but for tax purposes it is considered a disregarded entity, so a corporation is safer bet than an LLC. This is if you are filing as a single person LLC. Adding another person, wife, life partner, whatever will give you the tax benefits back. A single person LLC is a fancy sole proprietorship with a name protected at a state level instead of a county level.

    The EIN keeps your income and the business income separate, if if you are an SP running in a DBA status. LLC or Corp will need it's own EIN.

    Using recurring payments is a must. The receipt for payment is their invoice, although an initial itemized invoice is nice too.
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  • Profile picture of the author johnd123
    Mobile marketing business is still in initial stage. If you are well trained and have good knowledge in new mobile technologies then you may start a mobile marketing corporation. You should go with proprietorship option because LLC may create problems when you will pay taxes for your corporation. Find a vendor who can support your mobile applications in market according to your selling products. Surely you should take professionals help to get full prospective of mobile marketing business.
    Market your business using active search engines and applications and launch your newly developed mobile application to get more focus in market place.
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  • Profile picture of the author beeswarn
    I'd like to start making cold calls in as little as a week. I want to be completely prepared and i don't want to come back here saying "hey guys i have my first meeting tomorrow! what do i do?"

    Start selling now and worry about the books later. Any honest accountant will tell you that. Until you are sure you can make a go of this, and you know you're suited for running your own business, there is no reason to expend the several hundred dollars it's going to cost you to set up a business entity in California.

    It doesn't sound like you've budgeted capital for these expenses anyway, so don't spend time on it until you've made at least a few sales. If you want to make work for yourself that will ensure you stay off the phone and out of the field, then do something that will possibly help you. Go to your bank and speak to your branch manager. Tell him you have gone into business for yourself and tell him to make a note in your account to accept checks written to you from lots of different people. Check 21 caused lots of problems for sole proprietors.
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    • Profile picture of the author mojo1
      Originally Posted by beeswarn View Post

      [B] Check 21 caused lots of problems for sole proprietors.
      Do you mind sharing how this caused problems for sole proprietors?

      I thought with Check 21 the funds were released immediately if the banking institution allowed it.

      Do the banks somehow hold the checks for a period of time?
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      • Profile picture of the author Green Moon
        Make sure you talk to an accountant or lawyer before you think about setting up an LLC in California. While you can set up an LLC in California for a minimal cost, there is a minimum annual tax of $800 in California.

        Be careful of advice you get in a a forum. People often repeat what may have worked for them with no understanding of the impact that different fact situations have on the answer. What may have been great for them may be a costly mistake for someone in a different situation.
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