This video is from a request that I got from Stefan wanting to know how a freelancer makes the transition from freelancing to actually running a small business. The simple answer to this is that you’ll actually organically feel the move. If you’re a freelancer you might be still doing your taxes on your own. At some point you’re going to get to the crossroads of knowing that you can’t do it any longer. There’s certain deductions, there’s certain state, municipality type things that you’ll need to do and that’s where one of the steps where you’ll know that you’re going to start moving into a business situation.
All of this transition from freelancer to a LLC or an S-Corp or some sort of corporation as a small business does happen organically. You start to miss things and you know you need help so you then have to add a, it may be an intern, unpaid or paid. You might need to add a part-time employee or a full-time employee. The other piece of it is, you might have customers that will require certain things of you. They’ll require liability insurance. It can be a number of different things. When you get to that stage where you’re not just shaking hands with people and doing work for whatever field you’re in but you’re actually being asked for contracts.
In order to protect yourself personally, that’s when you actually have to make the jump, get into a business situation again, where you’re either a corporation, an S-Corp, an LLC and by creating a certain corporation you ultimately protect your personal assets. If something was to go bad and you got sued, you wouldn’t want the customer to come after you and just wipe you out. So if you’re a business and you’re set up properly and you have insurance, you have a much better chance of having it start and stop in the business side of your life and not cross over into your personal life.
But things like getting a real business account, an employment identification number, an IEN that’s what the call it in the States, I don’t know what they call it in other countries. So you’re no longer using your Social Security Number as the primary identifier of your bank account. You have a real name, you register with, in this case I’m registered with the Arizona Corporation Commission. Things like that, when you start to make those moves, that’s when you become a small business.
What happens in the back end is you have all these systems you have to get in place. It’s so worth getting your accounting stuff into an application. The more popular one is QuickBooks. That’s what we use, we use the online version. So that all of our accounting stuff, I can get to it wherever I am, if I have to look at any financials, any statements, any invoices, anything like that. We share the online version with our accountant who can go in at any time and check things.
The other back end system that we use is an application called BandHelper. I had put this up in another video. BandHelper was basically made to allow Bands to keep track of their gigs and keep track of the finances that are shared within the members of the bands. I basically took the system and I turned it into a booking system. I know I’m well overdue of putting up videos to show you how I’ve taken an application that wasn’t meant to be what I’m using it for and customized certain screens and made some requests of the developer, but ultimately it’s the most amazing thing for us. All of our bookings go into that system and are handled that way. Anybody that has an Android phone, an iPhone, an iPad, or even the web version can go in at any time and look at the gigs that they have coming up, all the details, and things like that.
So we have the accounting side, we use QuickBooks. We have the scheduling side for onstage entertainment group, even keeping track of my own gigs, which is BandHelper. Then we just started using what we call a customer relationship management software. It’s basically our contact database. It’s called Zoho CRM. There’s a free version and you can get used to using it.
But I’ve used a lot of those things, I came from the software world, I used to use ACT, which was a contact management system. Then I used to use [inaudible 00:04:55], which was a customer relationship management system, somewhat like Zoho CRM. I’ve seen them all, and this application for us, is amazing. We can put in … someone calls and says, “Hey, I’m having an engagement party and I need a solo guitarist.” We can go in and enter that in the system as a deal, while we’re working on all the logistics of it. Finding the right person, and sending the client videos to review and it’s still in the process, it’s not a booked event yet. We can work through the process in this one section called Deals. We work through it through progression, all the way to the point where we send contracts, they sign it. Soon as they sign the contract, we go into BandHelper, we book it, close the deal down in Zoho. We have that part of it in there. We can put in, if we did lose something we can put in the reason why so we know not to do that again, or we can figure out ways to not have that happen. Then we close the loop on everything.
So, we literally have all the bases covered. We have accounting, scheduling and customer relationship. Again, the transition will be organic. You’ll know when you need to make the jump from a freelancer to a business. Then you really have to start thinking about your back end systems. I think that covers it. But I’ll answer any other questions in regards to that transition. But again, it’s organic and you have the financial part, the scheduling part and the customer relation part.
I think that will do it for you. All right? If you have any questions, please ask me. Do me a favor, please subscribe to the on-stage entertainment group channel. We only got a few subscribers the other day but the more content that I put up like this. I think the subscribe button is down here. Hit the subscribe button, please. Help me out and I will talk to you soon. Peace.