|Just a snapshot of the paperwork and office supplies.|
For about six years, it had been enough challenge to run a sole proprietorship from home. But as the work has grown and I've needed more help to do it all, the business started outgrowing that little niche. I've been enjoying the SBA-supported business advice of the Marin Small Business Development Center, and a few of my fellow architectural entrepreneurs have gone before me out of sole prop status and lived to tell the tale (Boiled Architecture, Emily Borland, and EntreArchitect, to name a few). I also had in the back of my mind a 2012 CSI education session that stuck with me, given by Leslie Shiner on building a business that would allow me to retire someday. That'll probably be a couple of decades from now, but the idea was planted - I would rather grow the business than keep it to myself.
The theme I kept hearing from my advisers was that I should separate the business from the family, monetarily speaking. Since I'm a licensed architect in California, I don't have a whole lot of choices about how to accomplish that, as an LLC can't be an architectural business here. So, if I wanted to stop being a sole proprietor, my best bet was an S Corporation. So I got myself a little help with the details and the taxes, and lo and behold, Vivian Volz Architects, Inc., is now doing business as VVAS.
With the friendly advice and invaluable services of Meghan Rhea and Justin Barnett, I've learned how to hold a meeting of the board of directors, pass resolutions, and all those other things even tiny corporations have to do. It's not been without a few snags, so here a few things I've learned that might help the next colleague take the plunge:
- Ask your bank, as early as you can, how they will want to transition your accounts from the old entity to the new. Mine did it the hard way, and it was more than a little awkward.
- You'll need to notify all your insurance carriers. Most of them will just nod their heads and keep going, but one of mine needed a letter and some paperwork. Oh, yeah, and an audit.
- When you tell your clients, they'll be happy for you, and their accounting staff will have questions and need paperwork. Most of mine gave me the email equivalent of a high-five and filed the letter with the new tax ID. One very scrupulous accounting team is carefully paying the old company separately from the new company, which will make my accountant happy. I suspect the rest will make me glad I had an accountant doing my 2015 taxes.
- So many office supplies! New corporate seal, new checks, new brad-fastener file folders, new business cards.
- Also electronic design changes: new letterhead, changes to the standard proposals and contracts - watch this space for how much time I estimate it took to finish tweaking the correspondence just for the change of business entity. Gee, I guess I should change the blog's ownership, too, come to think of it...
- So many licenses and registrations. Every single one of them probably wants updates, or money, or both.
- As it happens, I hadn't registered the old business with Supplier Clearinghouse as a women-owned business yet, so I registered the new one. It's relatively easy to do with all the paperwork for the new business - if you've got a similar clearinghouse for local business, small business, or other preferential hiring incentives, it's not hard to piggyback your registration onto your business entity change.
After a year, looking back on the work, I'm finally ready to be excited and proud instead of dazed and continually finding one more thing that needs changing. And I am royally pleased that 2016 is a new tax year with the corporation all set up as we mean to go on. Here's to the new year!
Photo Credit: Vivian Volz, Copyright 2016
Photo Credit: Vivian Volz, Copyright 2016
Congrats! Interesting read, even though I'm happily employed with a large firm! We are, however, transitioning to a full ESOP - employed owned firm - which has some challenges with licensure in certain states where we practice. Here's to a successful 2016 and beyond for VVAS!ReplyDelete
Cheers! Thank you! And here's to your successful 2016, as well!Delete
Talk to me (or someone else you know who's worked at Gensler) about the ESOP firm challenges. Best of luck to you - it's an admirable pursuit, so it's too bad the licensure requirements are impeding it. My process has certainly shown me places where legislation that was intended to protect the health, safety and welfare of the public has gotten a little old and behind the times and is now protecting us from some useful, modern business practices...
If you want advice on what NOT to do, call me.ReplyDelete
Good luck and best wishes.