Web Site

With the LLC in place, I can work for strangers with a modicum of safety.

I have published a simple one page primitive website at:

http://www.firststoptech.com


Not much to see there, but as the business cards the wife made for me have a web page, it would be a good idea that they see something other than my web host's announcement that I would be getting off my tuchus and making a web page someday.

I'll add three pages for the three services First Stop provides next.

My partner has located three prospects for the leased equipment and he is developing our first Linux image for the Compaq Deskpros I purchased.
I have started Windows 98 and XP versions and secured 6 XP licenses. The others are already licensed with 98.

I have located open source software that will help keep the price absurdly low and ramp up a sizable clientèle quickly to hopefully get R&D funds together.

LLC Complete

A few weeks ago, my LLC became official with the state of Maryland.
I may do business now with a PC and if something untoward happens, I can lose my business, but not my house (and therefore the wife and kids.)

Inventory

Purchased 30 Compaq computers for leasing.
25 memory DIMMs total.
8 PC's loaded with 384MB.
First test PC running well with Windows XP.

Will probably ship with the Windows 98 licenses they were originally sold with.
XP as an upgrade option to upsell.

Maintenance demands may force upgrading anyway.
First Stop will buy them from me as customers can be secured.

Hurry Up and Wait

I dropped the LLC Application in the Mail with the $100.00 fee

The LLC application says:
"Regular processing time for submitted documents is about 7-8 weeks;"

For those future moguls out there wondering about the investment involved in forming a company, I'm down $125.00 and the process can take 9 weeks if you're quick about things.
I'm not in a rush, but if you are, be sure to allow for at least that much before your LLC and trade name are up and running.

You can pay more money, maybe $150 bucks more to get faster service.
Feel free to comment below if you choose to go this route and tell us all how quick it is.

The LLC form

I picked up the "Articles of Organization for Limited Liability Company From and Instructions" from:
http://www.dat.state.md.us/sdatweb/sdatforms.html


The fee will be $100.00.
Serious money for my tiny firm. The 20% holdback from my fees has been a good idea as it gives me the money needed for expenses like this.

The form looks simple enough.

(1) Name of LLC. (must include "LLC" in the name)
(2) Purpose of the LLC. (One or two sentences describing the business).
(3) Address of the LLC.
(4) Name and address of the "resident agent" who accepts "service of process" for the LLC. (must be a Maryland adult citizen.)
(5) Signature of an adult authorized by the persons forming the LLC. (Kids can form LLC's!)
(6) The "Resident agent" signs.
(7) Return address for any correspondence regarding this filing.

I'll pull the trigger soon. I would like the flexibility of adding customers who are not intimate friends even if I don't plan to expand immediately.

Paraphrasing Louis Pasteur: "Chance favors the prepared mind."

The skinny on LLC's

It appears I need to "file articles of LLC formation or articles of organization with the state government agency in charge of corporations and limited liability companies" with Maryland's secretary of state office's "Corporation Division" or "Corporations Division."

Teh same web site strongly suggested an "Operating Agreement" which describes how the LLCs owners, or members, relate to each other and to the LLC. That'll be pretty easy: ME.

And confirming the reason behind making an LLC:
"With an LLC as the business owner, so says my attorney friend, the "worst case scenario" is liquidation of the LLC and the people who own the LLC lose what they’ve invested in the LLC.

Without an LLC, the business owner’s "worst case scenario" if there’s a "slip and fall" accident is that the owner can lose almost everything they own. In other words, the business owners could lose not only their investment in the business but many other assets as well.

An LLC may need to print new letterhead, business cards, and envelopes that use the new LLC’s name in order to show the world that you’re now operating as a limited liability company. (Not a problem since I have none of these made for First Stop Tech yet.)

Finally, an LLC can save the owners thousands of dollars a year in income or payroll taxes.

As to why one sets up C and S corporations:
"A C corporation, for example, often lets businesses provide rich tax-free fringe benefits to employees including shareholder-employees. And an S corporation often lets a business dramatically reduce the self-employment, social security and Medicare taxes paid on the owner’s profits"

Something to keep in mind if the company someday makes more money than I know what to do with.

Why wouldn’t every business use an LLC or limited liability company?"

Perhaps predictably, there are some costs and headaches associated with operating as an LLC. While the bank account for a sole proprietorship may be free, a limited liability company probably won’t be. The bank may charge $10, $20, or more each month.

An LLC probably needs to file its own tax return if the LLC operates as a partnership, a C corporation or an S corporation. (Not applicable to me, a sole proprietor and filing as such)



Okay, I'm sold.
Let's get it done.

Google "Maryland LLC application....Bang!":
http://www.dat.state.md.us/sdatweb/sdatforms.html




Sources:
http://www.buzzle.com/editorials/12-23-2005-84744.asp
http://www.buzzle.com/editorials/12-23-2005-84745.asp

Check It Out

The business checks and endorsement stamp arrived.
The checks are a simple beige.

The stamper works just fine, I've endorsed two checks so far.
The checks came 3 to a page, 600 pages. Not 600 checks. I have 1800 checks.
If I use them all, I'll be well on the way to micro-mogul status.

The 150 checks for 40- dollars at my bank may have actually been for 450 then. Still triple the checks for 10 dollars more is a steal and Wal-Mart threw in a free binder.

So far, I'd recommend them to business owner wannabes.

Still investigating legal protection before I look for more work opportunities for the business.
Small side jobs are coming in faster than I want to handle them anyway.

My second customer has, unprompted, started writing checks to the company name.
I really only have three steady customers. It has to stay that way for now. I need teh legal protection before I expand.

TA Name locked in.

My contact at Personal Property hipped me to the web page:
http://sdatcert3.resiusa.org/UCC-Charter/CharterSearch_f.aspx

Here you can use that L number received from the personal property form and search for the status of your TA name.

(Dept. ID)	Entity Name	Entity Detail			Status
(L12395521)	FIRST STOP TECH			Personal Property	ACTIVE

The "Active" means First Stop Tech is a proper business in the eyes of Maryland.
I passed this info on to PNC bank so my business account in limbo is locked in.

Now I can get around to the liability protection in earnest.
Establishing a small fund in the bank account for business purposes, I have assigned myself a pay rate of 80% of the hourly rate I charge.

I can give myself a raise once the fund is reasonably flush.
I have purchased some equipment for the business and I can reimburse myself with this money.

This is where the accounting can get confusing and I'll need to educate myself on keeping books. If things get hairy, I've got a pro in mind.

In the Clear

The State Dept. of Taxation cleared me for property tax.

She referred me to the Charter Division to follow up with the TA form needed to keep things straight with PNC bank. I have another check to deposit at some point too.

I'll want to set up a reminder to submit the Property tax form in subsequent years.

I also need to look into some type of incorporation to protect my personal assets. I don't mean for my business to bankrupt me.

The Checks in the Mail

Nine starter checks were not going to last, no matter how miserably this business venture was going to fail.
So, I needed to get some business checks. The bank wanted top sell 150 of them to me for 40 dollars which struck me as steep. Throw in a check stamped and I was looking at 50 bucks plus.

I did a little shopping around on teh net and settled on the evil empire:
http://www.walmartchecks.com/product.aspx?lineid=6&productid=1118

Yes. WalMart sells business checks.
They sold me 600 checks and the stamp for $39.14 including tax.

Be sure to save a starter check and deposit slip to verify your account with them.
The process of ordering and mailing the VOIDed checks took me a few days, but if you were organized about it, you could have the whole thing done in less than half an hour.


Next, I check on the TA name and property tax forms.

Mileage and Employees

Ugh. My tax consultant tells me I'll need to make 1099 forms for my buddy since I'm paying him more than 400 bucks.

If I plan ahead maybe I can avoid some of this paperwork.

I submitted 2007 mileage so that should be good for a few bucks.

Marketing strategies are occurring to me to minimize time away from family which will make the income less of a sacrifice to obtain.

It is very easy in life to lose track of important things for the sake of money.

Soon I should check the status of my Trade Name application and property tax form and submit it to the bank to dot my i's and cross my t's.

Bank Account completed

PNC bank was permitted to make a DBA (Doing Business As) account for me as long as my paperwork with the state had been submitted.

I received 9 starter checks and deposited the check from my main customer.
Funds should be available Friday. I mean to mail my check off to my colleague on Wednesday so he'll be willing to work with me again if necessary.

Next, I can follow up with my contact at the State Taxation Dept to ensure my application was filed and then check to see what I'll need to worry about as the business grows.

I also need to compile a reckoning of the miles I drove for work purposes. At 44 cents a mile, this is not an insubstantial deduction.

Finally, I'll need more than 8 checks after Wednesday but those provided by PNC were quite pricey. I'll get some quotes together.

Trade Name Application

I'll approach PNC bank for my business checking account first.
They appear to offer a small business checking account free of charge with no minimum balance as long as you're not making more than 5 grand per month.
I'm abandoning ING because it does not appear they offer business checking.

https://www.pnc.com/webapp/unsec/Solutions.do?siteArea=/PNC/Home/Small+Business/Checking/Free+Business+Checking

Meanwhile, I can fill out my Trade Name Application found at:
http://www.dat.state.md.us/sdatweb/sdatforms.html

It asks for a personal property account number, aka an "L number".
This was what I got by filling out the AT3-73 earlier, the "Application for Unincorporated ID Number" found at:
http://www.dat.state.md.us/sdatweb/personal.html#forms


A friend suggested I relay the time and expense of this process so I'll tell you now that submitting the Trade Name Application is the first expense I'll be incurring: $25.00

Not much time has been involved in filling out this paperwork and the rapid response at the state dept. has allowed the ID number to be secured in less than two days. It was slower because of me, not them.

The Property Return and Trade Name application will be snail mailed.
I will pass on any news of the disposition of these forms as they arrive.

AT3-51, naturally

The AT3-51 appears to be the next step.
To fill out the AT3-51, aka the "Annual Personal Property Return of Sole Proprietorships..." I needed a Department ID #.

I got that but sending in an Unincorporated ID Number Application from:
http://www.dat.state.md.us/sdatweb/personal.html
aka the AT3-73. Sent to which goes to the Program Manager's Office of the Business Personal Property Division of the Department of Assessments.

The lady who emails back is exceptionally helpful. I'd name her if I thought she'd appreciate it. Maybe I'll ask.

Now, with the Department ID #, I have finished the AT3-51.
I'll print, it, sign it, and mail it back to SDAT. (Can't email this one.)

Then I'll figure out the next hurdle.
Perhaps getting the Bank Account?

FPBCN (naturally)

I started filling out the "Application for Unincorporated ID Number. "
It asked if I owned or leased property and what it was worth.
Okay. I'm biting the bullet. My junky computer equipment and tools might fetch 300 bucks on Ebay.
That's what I'm saying.


It then asks me for a "Federal Principal Business Code Number". Oooo-kay. Wuzzat?
In the document:
http://naicscode.com/faq/irsbacfaq.asp

The FPBCN is defined as the activity from which the company derives the largest percentage of its "total receipts".

You can figure out what best describes what you do at:
http://naicscode.com/default.asp

I punched in computer repair and got a few pages to choose from. A javascript link there sent me to THIS page:
http://naicscode.com/Search/MoreNAICSDetail.asp?N=811212#Description

The FPBCN:

811212

Computer and Office Machine Repair and Maintenance - 2002 NAICS Code

sounds like it fits the bill. 2002 appears to be the most recent set to choose from. I assume this is the number they're looking for.

It also offered the following "SIC Code":
7378 - Computer Maintenance and Repair

I'll make a mental note in case some other form asks me for it one day.

Runaround Part 1 - Personal Property

And so it begins.

Before you can fill out the Doing-Business-As DBA "Trade Name Application" form in Maryland, you must first get a "Personal Property Account" number to fill in question 4 on the DBA - TNA form.

The Personal Property number is only needed if your business is going to own or lease property at any point. (Other than a street mime, what business doesn't use any equipment???!!!)

This is annoying.
Fortunately my assistant isn't in desperate need of his funding.
Maybe I can pay him interest! That'd salve the wound, I hope.

So I found a "Personal Property Brochure" at:
http://www.dat.state.md.us/sdatweb/personal.html#forms

A link labeled "Personal Property Brochure", oddly enough is very near the top and also listed under "Other Information".


Apparently, sole proprietorships (I believe First Stop qualifies for that description) call the state to find out if they need to report personal property. It may be obvious in some cases, but if I don't have to file, I'd really rather not.

If you are setting up a business in Maryland, you'll be calling:

Department of Assessments and Taxation Business Personal Property Unit
301 West Preston Street,Room 801
Baltimore, MD 21201-2395
(410) 767-4991 Fax: 410-333-7937
1-888-246-5941 (toll free within MD)

Other ways to reach the Department are:
Website . . . . . . . . . . . . http://www.dat.state.md.us
Email . . . . . . . . . . . . . . persprop@dat.state.md.us
MD Relay Service . . . . . 1-800-735-2258 TT/voice

The Department also has a local assessment office in each of the counties where forms and routine information may be obtained.


I'll email the state and see what they say.

At the very bottom of the page I saw a link to the Application for Unincorporated ID Number
It's found at:
http://www.dat.state.md.us/sdatweb/pp_AT3-73nofill.pdf

I am confident this is what I'll need if the state says I have to have this Account #.

Getting the DBA

This blog is dedicated towards documenting a clueless techie's journey towards business mogul.
I have a check in hand using a business name I came up with.
To cash it I need a bank account.
To get the bank account, I need a DBA form (doing business at)
To get a DBA form, you need to find your state's requirements.

You can find them at:
http://www.business.gov/guides/business_law/dba.html

My state links (Maryland) are here:
Trade Name Application
http://www.dat.state.md.us/sdatweb/nameappl.pdf

Business Registration and Trade Name FAQ
http://www.towson.edu/sbdc/FAQ.asp

Dear lord, what have I done?

Needing money, I found a side job on Craig's list to network an office with a network switch and Ethernet cables.

The man who hired me liked my work so much he has hired me on regularly for spot tech support.

The need for money isn't going away any time soon and at the age of 40, I get nervous about trying to get another job when medical bills scare some employers away.

With that in mind, I thought I would start a business that could take the place of my job one day. I got a web site name that fit my idea for a tech support business and registered www.firststoptech.com.

I developed an invoice with my new business name and I was recently paid for a rather big job with the business name right on the check.

I can't cash it. I MUST become a business.

This is for the best. I did the last job with a buddy and part of the money is his. I subcontracted two minor fixes to another friend. I have two employees, of sorts. Contractors really, but they answer to me.

I am CEO, supervisor and project manager now.
I do business development and marketing.

Now I have a check in 4 figures that I can't cash and my buddy deserves his cut.
I've told him of the obstacle.
I'm looking into a "Doing Business As" as explained at http://entrepreneurs.about.com/od/businessstructure/a/doingbusinessas.htm

I've done it once before for a non-profit project, but this is an ongoing thing.

I also need to get the banking account going, but the DBA was a requirement. So first things first.