With that many savings solutions, perhaps the bigger question is what to do with that chunk of change once we’ve got it. People talk a lot about investing in themselves through a nice professional wardrobe, higher education or fancy business cards. But have you ever thought of pursuing entrepreneurship as a way to invest your money?
Launching a business can be a lengthy undertaking with a lot of loopholes to jump through. As I learned while founding both for- and non-profit entities, the tab for legal requirements and filing fees can also add up. Tackling the process in stages and starting now can make a lot of financial sense.
Not sure how to put your $1,000 to its best startup use? Consider one of the following ideas, each of which will run you about a grand:
Protect That Great Idea
Rapper Ludacris’ song, Tell It Like It Is, literally tells it like it is e.g., “start up ya own company, trademark the name / That’s gon’ run ya bout a grand so start savin’ ya change.” In the most general sense, a trademark is a brand name, and filing a federal claim to one protects your full and exclusive right to use it. How important a trademark is depends on your industry.
Processing fees a la carte start at approximately $350, and, as Mr. Ludacris said, quickly add up to about $1000. Once granted, trademarks are good for life with proof of use within five to six years and proper renewal every 10 years, according to the U.S. Patent and Trademark Office, making a trademark a good way to invest in your entrepreneurial dream. Patents, the way to protect designs or inventions, require a slightly different process but cost about the same.
Bring Your Business to Life
While the exact process varies, the first thing an eager business owner must do is cut checks for:
o Officially forming your business and filing with your state. In Texas, where I launched my business, you could foot the bill for filing for formation of an LLC ($300), retail or “seller’s” permits, or an assumed name certificate ($25), but it’s generally regarded as startup-friendly. Don’t forget occupational licenses, postage, notary or online filing fees to submit your documents. While costs vary, they can quickly total several hundred dollars.o Opening bank accounts for your business. My bank, for instance, requires a $500 minimum sustained balance to avoid usage fees, which means it cost me $500 to open it.
o Launching an entry level marketing campaign. Print basics like business cards through sites like Vista Print or Zazzle to keep costs low. For websites, options such as a WordPress-hosted site come in at approximately $150 for a custom domain. For several hundred dollars more you can host through an external service or purchase your own building software, like Dreamweaver.
o Classes, online forums, books and other resources to teach you how to become a business owner in your state. Libraries are great for general research, but you’re going to want copies you can mark up.
Pay up So You Can Help Others
Filing for non-profit status in most states is cheap; in Texas, the cost is $25. The IRS is going to charge you about $850, however, for federal filing, in addition to the paper and ink required to print the 50-100 page application several times and the expensive postage to mail it. While this process can be completed without a lawyer, it is much smoother with one, so you may want to keep saving until you can afford legal representation.
While $1,000 is only the beginning, the road to entrepreneurship starts with tangible investment in oneself, and that sum is more than enough to get started. So what are you waiting for? Good luck, business builders!