I think it depends what your goals are.
I freelanced for years, as a little side thing, for fun, and to keep the portfolio diverse. Almost all of my work was word of mouth. I did this with an EIN. It doesn’t cost much in money or effort and it prevents your SSN from being all over the place. (of course now I have LifeLock so it is kind of a moot point).
Once I left the security of a full time gig, I set up my studio with the intention to grow, so this is what I did:
- Trademark the business name $800-$1500
my personal name, this was with intention to form a studio around my expertise/experience
- Accountant $1500
I did hire a very good accountant that costs about this much. He is more of a complete financial services provider, so I do taxes through him, he helped me get all the insurance I need (life, personal disability, umbrella coverage, this stuff is important and expensive, but if your right arm in an accident, you want to have disability coverage). He helped me get 401k’s and SEP IRAs in place. He also can run payrolls for me, and when he does my taxes he runs them multiple different ways and is able to do things that TurboTax can’t. One of my best friends is a designer at TurboTax. The accountants basically use a professional version of TurboTax that allows them to run things multiple ways and make exceptions with reasons. It is worth it and the he basically pays for himself.
- Legal (contracts, etc) $1500
I hired a lawyer who mainly works with athletes on contracts and endorsements to put together my standardized contracts, master services agreements, NDA’s and contracts for subcontractors as well as file my LLC. Having worked at larger firms, and on the corporate side, I’ve seen the benefit of having contracts multiple times. If anything it just puts everything in black and white right up front. I will do this, at these times, and you will pay me that at these times. It forces some disciplined thinking up front. When people are afraid of signing contracts, that is a red flag.
- Any business licenses (not sure if needed or not) ~$200?
Had the same lawyer handled that at the same time
- Creating LLC ~$200+
Had the same lawyer handled that at the same time. This is important not only for liability, but also for taxes. By filing an LLC you can file your taxes as an S Corp, then run payroll to yourself (and once you get employees, to them too)
- Website $1500
Made mine myself. I used Everweb, because when I made it Squarespace and Wix were very new and I din’t quite trust them. When I eventually get around to redoing it I’ll like use Squarespace or Wix. Just hasn’t been a priority as I’ve been booked a quarter out for the last year and most of my business comes from word of mouth.
- Logo & Business cards $300-$400
Do it yourself, print on moo.com
- CRM system $0-$1200/yr
Why?
- Computer hardware & software ~$3000 (this is a given)
This might be more, depends on your needs. I tend to really like my gear, so I spent a bit more than this.
- plus marketing costs - $ unknown
Haven’t needed, but eventually I’ll probably step up to something here.
- plus anything else not identified - $ unknown
There are always other costs. Traveling to tradeshows/conferences, your car, and don’t forget to make a budget for your living expenses and a rainy day fund. Sometimes the hot water heater goes or something.