business start-up

[spt60]

Hi everyone,

I'm a CS student and about to graduate at the end of the semester. I'm looking to start a part-time web development business (making websites/web-application) while looking for jobs and working.

It will start very small, I'm pretty much will be the only person and self-employed. I'm taking some business classes right now to have some backgrounds. However, I'm not sure what type of business should I file for (Sole-proprietorship, LLC,...?) and do I really need a lawyer to set it up?
In my class they taught me that I really need both a lawyer and an accountant, but since this is not a traditional business model with inventory, storage, etc. I don't think the accounting task would be that difficult. How easy is it to file for a business type and do we actually need a lawyer to do that? Is there any government org. that can help us file for free?

Thanks

spt60

[rkawakami]

I'd start here: http://www.sba.gov/

[jdhurst]

I would make several points:
1. Incorporation is better than sole-proprietorship in my opinion because the corporation protects your personal assets. The corporation can go bankrupt without taking your personal money and assets with it.
2. In a corporation, you need a lawyer to set it up (one-time cost) and a lawyer to do the minute book annually (usually $300 per year). Using a lawyer prevents problems, and the younger (and therefore less experience) you are, the more you will want to avoid problems. Where I am, the cost of government services to start a corporation are about $700. A lawyer will charge another $700 in fees. You cannot register a name and get a charter in your locale (state?) for free where I am.
3. If you have not taken accounting classes, you probably should not do your own accounting. A chartered accountant will do a tax return from properly kept books for approximately $1000 per year. You probably can do better than this. If you need someone to put your books in shape, consider a bookkeeper once a month.
4. You need to determine how and where you will get clients. Local clients coming from some sort of reference (people who know you) are best. From there, you can branch out.

It is not daunting, but you do need to keep your wits about you to run a business, and you do need to work hard (very hard).
... JDH

[dsvochak]

If there is any uncertainty regarding the proper course of action, it will always be less expensive to consult an attorney before acting (before you’re in trouble) than to consult one to get you out of trouble. There are innumerable ways to run afoul of federal, state and local statutes, rules, regulations and policies related to conducting a business. A relationship with a competent business attorney is prudent business practice.

(The above written by an attorney who has, over the years, spent way too much time getting people/businesses out of trouble they could have avoided)

[spt60]

thanks guys, I'll certainly take ur advice into consideration.

spt60