As a freelancer, you are no doubt be used to working for yourself, but as your workload starts to grow, you'll soon have to make the decision to form a company and hire employees to help you out. Transitioning from a freelancer to an entrepreneur might seem like a scary prospect to some people. However, it proves that you have a good head for business and your customers buy from you because you know what you’re doing. If you’re a freelancer and are at the point where you need to become incorporated, you might be wondering how best to transition to this new phase of your business. Despite what you might be thinking, the process isn’t as difficult or scary as you may have first thought. In today’s blog post, I will give you a rough guide to turning into a business leader from a sole trader. Here is what you need to know.
Setting Up a New Legal Entity
When you work as a freelancer, you and your business are virtually the same thing. When you transition over to an incorporated company, though, you become separate entities. It’s important that you set up things like bank checking accounts in the new business name and that you start paying your bills from it.
Before you can do any of that, you need to register your new company. The process also involves getting a tax ID from the IRS so that you can file returns for your business. Once you’re up and running, you are now an employee of your new firm!
When you hire employees to work with you, it’s vital that their tax details are properly recorded and processed. That way, you can ensure they get paid correctly and any applicable tax gets paid by your business.
With that in mind, you should ensure you have an in-house payroll and accounting professional working for you. Providers such as Portfolio Payroll can help you out in that respect.
Moving to New Premises
Even if you plan to hire freelancers that work from home, it is still beneficial to have dedicated office space for your company. Doing so helps you portray a professional image to your clients, especially those that will only do business with other companies and not freelancers.
The cost of renting an office need not be expensive. In fact, you could even just rent a mailbox at a prestigious business address and hire meeting rooms there when you need them. Search online for virtual office providers like Regus to see just how affordable and flexible such a solution can be for your business.
Hiring the right talent
When you transition to a fully-fledged company, you will need to hire the right people to work for your brand. While it’s important to focus on skills and experience when short-listing potential candidates, you must also determine whether people will be a good fit for your company culture.
For example, you don’t want to hire people that are used to working in formal environments if every day is “Dress Down Day” at your workplace!
By considering the above points, you will find it easier to transition yourself from a freelancer into an entrepreneur running a company. Good luck!
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