What white collar startups can learn from Blue Collar
When most blue-collar businesses start, they do so very differently than white-collar businesses. Most blue collar companies start by providing a product or service and then build their infrastructure around their revenue. On the other hand, most white-collar companies tend to focus too much on the early stages of setting up their infrastructure and not enough on generating revenue.
An example of this is when an HVAC repairman decides to hang his own shingle and go freelance. It will focus on finding businesses and repairing air conditioning and heating systems. You won’t worry as much about setting up your LLC and bank accounts, or starting a website. You’ll focus on doing what you do best and then fill in the blanks as you go. On the other hand, a new white collar company will form an LLC, open a bank account, start a website, create a logo, and then sit back and smile and feel like they’ve accomplished something.
My suggestion for startups without multiple owners is to sell something first. Generate income, and then if it seems sustainable, worry about everything else. I have been approached several times by people who have “started a business,” that is, who have filed articles of organization or a certificate of formation with the state. My response tends to be, “So you like to file two sets of taxes and do the accounting?” This question usually gets a confused puppy dog look from the new “business owner”. I don’t want to take wind of your sales, but paying a few hundred dollars to the state to form a business entity is not starting a business. On the other hand, if a person comes up to me and says something like, “I started doing a second job a while back doing (fill in the blank) and it looks like I can make a living doing this,” then that’s a “deal”. .”
I’m not a lawyer or an accountant, so I don’t give legal or tax advice, but often young businesses don’t make a profit and even if they do, the profits and losses are passed on to the owners, which is no different than having a sole proprietorship. . If taxes are not a concern, all you are left with is legal liability. Typically, any initial liability can be mitigated through some type of insurance policy, such as general liability or errors and omissions insurance. In my opinion, you should focus on building a sustainable and profitable business for the first 6-12 months and then formalizing it if it really is a “business”.