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Starting a Ministry Business

5

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Starting a business for ministries can seem a little bit overwhelming for many. There are the ins and outs of running a business on top of managing church clients. This week we dive into starting a ministry based web business. While we focus in on starting a web based business, much of what we talk about applies to any ministry support business.

If you're interested in starting a web business, even if you think it's something of a pipe dream at the moment come join us. Part of what we talk about is how to ease into your business.

What type of business to be?

If anyone is looking at the types of business with the advantages and disadvantages of that type check out this link for some info http://www.inc.com/articles/2003/09/legal.html.

Matt Farina
Geeks and God Co-Host
www.innovatingtomorrow.net
www.mattfarina.com

Matt Farina
Geeks and God Former Co-Host
www.mattfarina.com

Great episode!

Thanks Matt and Rob for another great episode!

I recently formed such a business in Minnesota. After talking with a friend of mine who is active with S.C.O.R.E., Service Corps Of Retired Executives. I chose to create a Limited Liability Company (LLC). While it may cost a little more (filing fees) than using an Assumed Name (aka DBA) I think it offers several advantages:

  • It provides you with immediate liability protection. Granted, this probably isn't a big deal but it's a good idea, nonetheless.
  • It may be easier. In Minnesota you simply have to pick a name and register (paying the $160 fee) and you're done. Using an Assumed Name requires a lower fee but also requires you to publish legal notices in newspapers of record.

The process is simple. I created my LLC one morning last November:

  1. I visited the Secretary of State's office and filed my registration. I immediately had my registration number without paying any expedited fees--it was actually easier than filing online. BTW this is actually a partnership and lists both my wife and me.
  2. With my LLC name registered I visited the IRS's online site to acquire an Employer ID (EID) number. Even though we don't ever intend to have any employees this is necessary. It is the LLC's "equivalent" of an SSN. It's necessary to open business banking accounts.
  3. Visited my local bank branch to open business checking, savings, and credit card accounts and order checks and an endorsing stamp. My bank (and many others) offer free accounts for small businesses (they do charge for more than about 150 deposits/month; if I get that many checks to deposit I'll gladly pay the fees :). I did have to pay for checks and the stamp.

I talked to my friend about 9:00 that morning; by 11:30 we owned an LLC. The total cost was less than $250, and I charged my company mileage going to/from the SOS office and the bank.

I'm afraid that I have to disagree with your recommendation about capital. That is, maybe you can't have six months of expenses saved up before you start. Six months is probably a bare minimum! I don't remember where I heard it, but one of the biggest causes of new business failure is undercapitalization. The most promising leads can, and do, fall through. Projects, like designing and building a new website ALWAYS take longer than expected; even good customers can take 30 days, or more, to pay.

Hope this helps someone,
Curt

A great point

you brought up a great side point. Expense everything you can. The mileage is a legit business expense. Look for all those little things and you can find loads of things to write off.

I'm with you on the six months worth of expenses. It's not as hard as many people think to save if you start working on the side first. You might have long nights for a year or so but the savings can happen and it will go a long way towards making the likelihood of success go up.

I understand putting our trust in God when it comes to business but that may mean being patient while we slowly save up the money to launch because that's how he's blessing us.

Matt Farina
Geeks and God Co-Host
www.innovatingtomorrow.net
www.mattfarina.com

Matt Farina
Geeks and God Former Co-Host
www.mattfarina.com

Thanks Curt

Curt I've been toying with which organization to use but was confused (to the point of paralysis) on how to go about it. Your succinct comments helped a great deal. I'm on the way to the SoS office!!

BTW, guys, white on black is hard to read for very long. I have to do quick visits to get much read here. But, I love the show and keep up the great work.

That's pretty much the point

That's pretty much the point with LLCs but you should pay more attention to taxes, it may be easier to handle the paper work at the beginning but you should also check for some income calculations just to make sure you can handle all the taxes. I didn't do this when I started an LLC and I ended up signing a llc member withdrawal agreement. I am just fine now with this decision, if I'll ever start a LLC again I'd like to think I've learned from mistakes.

I live in California, and I

I live in California, and I will soon be starting a Christian record company. If I decide to change a business entity from a LLC to a S or C corporation, Does the business name have to change, or can I keep the same name, with only the replacement of Inc. from LLC after the business name?

Your podcast was informative and helpful, with many of the business principles applicable to other industries (such as music) in starting professional entities that are decent and in order! Thanks!

Keeping same name from LLC to S or C corp

I have a business in the state of texas and I changed from LLC to S Corp. All I had to change was what follows the name, from LLC to Inc.