I’m pretty much done with the preliminary steps of setting up the business. I feel confident about knowing to whom to talk about various business issues, and when to do so.

Sole Manager

Basically, I’m the only person working for my company. For all intents and purposes, the company and I are one. I can contribute to and draw from the business account freely. I have to make sure to withhold 25-30% of any revenue that I get to cover various taxes (federal, state, self-employment, etc.). My accountant recommended opening a savings account and automatically putting the tax withholding in there whenever I make a deposit.

I can hire contractors, but there are very specific rules for somebody to be considered a contractor.  The Oregon web site has the relevant info.

SBDC

I’ve been told by multiple people now that the SBDC is a great resource, which should be used as much as is helpful. I got some good info out of my first meeting there. I learned about the flow of money as it comes into the company, covers costs, and pays me. I also was told about the various services that the SBDC provides and some of the people who I should meet with. One of those people is the marketing/communication guy, who I met with on Thursday morning. He’s helping me to make sure I have my branding and presence intentionally planned out. My consultant also extolled the virtues of RAIN, the Regional Accelerator & Innovation Network, and suggested that I try to get accepted into their next cohort.

I’m also getting set up with a bunch of free services that I can use to work on my business plan. One of which is LivePlan, which is apparently the de facto standard for developing and structuring business plans. There are also various resources for learning about different aspects of running a company.

Basically, if you’re starting a business, go talk to the SBDC. Especially if you haven’t done this before. You can meet with them as frequently as you need, and they have several people who specialize in different aspects of operating a business. Plus, it don’t cost nothin’.

Accounting Stuff

I was pleasantly surprised to learn that the accounting is actually a lot simpler and more sensible than I expected. I was expecting to have to keep track of all kinds of information for tax purposes. It turns out that you just need to document as well as possible, using whatever method works for you. The primary number that the government is interested in is the gross income. The other numbers come into play when you deduct business expenses. As long as you document it, and it’s an acceptable business expense, you’re golden.

Another thing to consider is setting up my back room as an office. Apparently, that’s not so hard to track either. The percentage of the household expenses that apply to the business is pretty much the percentage of the floor space that the office occupies. You just need to make sure that you document it. It does have to be a legitimate office space though, so make sure it’s separated from your personal use, much like the business bank account.

Marketing and Branding

I met with another consultant at the SBDC who is familiar with marketing and branding for businesses. He had some interesting ideas and suggestions. He seemed pretty excited about the name of my company and is going to send me some rough concepts for logos and presence. He also recommended that I meet with another guy from the SBDC, who knows about SEO, advertising, and linking various services together. I made an appointment with him, it’s only about 3 months out.

Legal Representation

My last meeting for the week was with Endeavor Law. This was just a casual meeting to get to know each other. I basically wanted to know when I would want to contact them. The legal aspects are mostly related to ownership. Before I sign a contract, hire a contractor, or publish a product, I want to ask them to review the details. They’ll give me an initial estimate before I agree to go forward with the consultation. They certainly seem to know most of the game developers in town and they have worked with a lot of startups, so I trust that they know what they’re doing.

Business Cards

I got my first batch of business cards. I don’t have a logo yet, so I went with a QR code that goes to the contact page of my web site. It looks alright, but I’ll be ordering more when I have a logo.

What’s Next

Back to the games. I’m going to be working this week to finish up VR Meteors and VR Missile Control to take down to E3 with me. I’ll also be putting up a static web page with the information that people will want to see when they visit. I also need to work on my business plan so that I can send it in to the SEA program within 30 days.

So, I’m just about done with the preliminary steps for getting this business off the ground. I’m going to document the various steps that I’ve taken so far, along with some of the advice that I’ve received from people who know much more about this process than I do.

First of all, I registered Out Of My Mind LLC with the state of Oregon. Apparently, the LLC designation is a state thing, and doesn’t really mean much to the feds. It took several minutes online and I was done. There isn’t much else to do at this point, if you’re the only person working for the company. I was told that I would want to have an Operating Plan in place before bringing on any other employees. Otherwise, there is the potential for all kinds of unexpected bad things. It was also stressed to me that the first thing I should do is open a company bank account and keep my personal and business finances separate. Otherwise, if there is ever an audit of the company, it becomes a personal audit automatically. Point taken.

After registering my business, I requested a EIN (Employer Identification Number) from the IRS, which took a few minutes online. After filling out the form and submitting it, I was able to download the document after a couple minutes of processing. During the application is also when I was told that I’m still considered a Sole Proprietor by the feds. I suspect that I may have to get another EIN if I ever hire any employees, but I’ll save that question for my accountant.

With my business license and EIN, I was able to open up my business bank account. Since I hadn’t done much research into banking options, I ended up going with the same bank that I use for my personal accounts. Some advice I received was that it is much easier to make contributions to or draws from the business account if they are at the same bank, which can save some frustration. In addition, it is a national bank, which could also save some headaches if I’m ever traveling for business or dealing with non-local entities. Eventually, if I have time to research banking options, I can always move the account(s).

I’ve also been trying to get all of my web sites and online presence set up, but I’ll leave that for another post.