Virtual Assistant Forums | Work from Home

cwilliams · #1 (**permalink**) 10-29-2009

Hello,

Does a business need to be legal (recognized as sole proprietor or LLC, etc.) by the state, and do you need business insurance before you accept your first client?

I was blessed to attend the 18th annual E-Day Entrepreneurial Excellence Award Luncheon 2009 in Indiana today, and I met a business owner who has a friend who is in need of a bookkeeper.

I am reading "The 2 Second Commute" by Christine Durst and Michael Haaren and learned that it is a good idea to practice my elevator speech before networking. As I introduced myself I gave my elevator speech and the business owner asked if offered bookkepping as one of my services. I told him yes, and asked for his business card. I explained to him that I am in the start-up phase of my business.

I have not completed the process to become a LLC or sole proprietorship yet.

I would like input before contacting the business owner. This may be my first client. I was not planning to officially open for business until January 2010, after I completed my website and Microsoft Office certification, etc. but God may have a different plan for me.

I appreciate your feedback

cwilliams

HoustonVA · #2 (**permalink**) 10-29-2009

Business Insurance is NOT mandatory but is recommended. Just as your home is insured to protect you against financial ruin if something may happen so it is with business insurance.

Have you thought about becoming a DBA until you finish with your LLC paperwork? Most counties have a form (available online). You fill out the form (don't sign it yet), then take it to the appropriate courthouse for filing, pay the fee, sign it & they notarize it.

I'm in Houston (4th largest city in America) and for less than $20 dollars I had my DBA. It took me longer to find the courthouse (40 minutes) than the wait was.

Either way of your decision - Good luck!

RebeccaT · #3 (**permalink**) 10-30-2009

I even went to the Harris County (Houston, Texas) courthouse and the clerk typed everything in...I had NO paperwork to fill out for my DBA. It was nice and quick.

ValentineVA · #4 (**permalink**) 10-30-2009

Good question and thread, I will interested to see what many of the seasoned VA's have to say in regards to this!

D_Victoria_Virtual_Assistance · #5 (**permalink**) 10-30-2009

This is a good question and I am glad you brought it up.

Here are my two cents. If you are setting out to start a business I'd say for best business practices it is always good to start on the right foot. In fact, if you are acting as a business, it is pretty important to portray yourself as one. This includes setting up your business as a particular entity, either a sole proprietor, LLC, etc. Checking with your county and township for home based business regulations/procedures. Determining your insurance needs (property, E&O -- which stands for Errors and Omissions). Getting service agreements together, etc.

Now don't be alarmed, because all of the above isn't all that hard to accomplish; it just takes some time and dedication on your part. In fact, sole proprietorship is the most simplest business entities to form. It actually doesn't cost anything, all you need to do is complete some paperwork. There are some other costs though, for example you will incur costs for registering your DBA (Doing Business As) name. You can than later change your business to a single member LLC, if you wish (again there will be costs for forming an LLC - check with your county and state for more information).

In terms of insurance, it is a good idea to check our your options, determine costs and your needs. Because it sounds like you will be doing bookkeeping, you should definitely consider getting Bonding Insurance and E&O insurance. There are some VAs on here that specialize in Bookkeeping, so hopefully they will chime in with some information on insurance needs for doing virtual assistant bookkeeping.

So, to sum this all up, if you are starting a business, making sure all of the legalities of your business are in place before you open your doors is important. While it is not necessary to have insurance right away, it is always important to understand what you are liable and responsible for whether you have insurance or you do not.

Starting a business is exciting and can be scary. Don't let any of the above deter you. Congratulations on getting a lead for your business already -- that is great news. Keep forging ahead; and you will do just fine

cwilliams · #6 (**permalink**) 10-31-2009

Thanks everyone for the insight,

I will look into DBA.

Thanks Victoria for information on insurance for bookkeepers. I will contact my insurance agent to get more information on business insurance.

I appreciate you all

cwilliams

OnTask · #7 (**permalink**) 10-31-2009

It's best to have at least your DBA registration before announcing yourself to the world. What if you have this one potential client that likes to know "everything" about someone before moving forward? I am exactly that way. I research my potential clients, boyfriends, potential husband, newborn baby...everyone! LOL! But seriously, if this person decides to make his decision based off of your establishment and stability in business, then you may lose out. I encourage you to present yourself as if you were in business for the past 50 million years. That means having all your affairs in order and just being "completely ready" for whatever comes your way. I'm just not a believer in giving too much "personal" information to potential clients...if you know what I mean!

Excel Virtual Services · #8 (**permalink**) 10-31-2009

This is really good information, as I am also starting out.

Thanks for posting.

Ivette

AM/PM Virtual Assistants · #9 (**permalink**) 05-20-2010

I have two questions. I have applied for a business license with the city in which I live since I live in the city limits. Is this the same thing as the DBA everyone is speaking of?

Also, my business partner and I thought that it would be best for us to conduct business with the business license for now, and then register as an LLC with the GA secretary of state if business booms. Is this a wise decision?

Thank you in advance for your feedback.

kimblake2 · #10 (**permalink**) 07-14-2010

This post was extremely informative as I am also just starting out and will begin looking into the dba licensing. Does anyone know where to go to find out if the name you pick is not yet used? I have been seeing some very unique company names on here and will have a hard time picking one out....unfortunately I am not that creative.