The other day my twenty-three year old niece called me to tell me she’s starting a business. She and her partner are quite serious about it; they have reserved office space and hold weekly meetings to discuss their business plan, developing it well beyond the “wouldn’t it be a great idea” stage. They have begun work on a website and are moving forward in many directions. The one area they are most concerned about, because they know the least about it, is how to handle all the official things — like filings, and formations, and EINs, licenses and taxes and all that.
Because they do not live here in Marin County, or even in California, I wasn’t able to tell her exactly what she needed to do. However that didn’t stop me from offering advice (because this is what we older people have to offer the next generation). My advice was twofold:
First: Not to let the fear of documentation stymie them. Yes, there are forms to be filed. They will need to hammer out the details of their partnership and formalize it to some extent. They will need a business license. They will want to form a partnership or an LLC, or even a C Corp. to get an accounting system and file tax returns, and one day pay employees and sales tax. But not now. Right now they need to keep moving forward. The business they have in mind will require a lot of preliminary work before they start earning money. They’ve taken the first step, but they need to take the next, and the one after that.
My second piece of advice: To keep all their receipts.