IRS, SBA, and SBDC does not consider your hustle a business because you are not doing the below things.
- Time Keeping: You do not keep track of your time. You’ll need to prove that you are actually working on a project, client, general administrative tasks. You need to know how long you have been working on the task.
- Refer to DCAAM 7641.90, paragraph 4b-d for audit compliance.
- Look for free or inexpensive time keeping apps like AllHours and MyHours.
- Use an excel worksheet.
- Policies and Standard Operating Procedures (SOP): You do not have policies or SOPS created.
- Revenue: You do not have any revenue and you can’t prove that your business will generate revenue in coming years. Keep the below on line.
- Profit & Loss Statements (P&L)
- Client/Customer List (This is secure document and needs to be handled via the Privacy Act.)
- Bookkeeping System
- Wave Apps: Free book keeping system
- Quickbooks: Most used book keeping system
- Xerox: Another common book keeping system
- Operating Agreement: You do not have an Operating Agreement.
- Seek the advise of an attorney, especially if you are apart multi-member ownership.
- Legal Zoom
- Rocket Lawyer
- Legal Shield
- Insurance: You do not have insurance to protect your business. Look to your industry or sub-industry associations. Most will have partnerships with insurance companies to provide comprehensive insurance for your business.
- Corporate Minutes: You are not keeping copies of your corporate minutes.
- Should be done no less than once per quarter.
- Should include all major decisions of your organization
- Should be filed in a secure place with limited access
- Membership Certificates: Owners of your organization do not have membership certificates. Obtain a corporate kit that will have certificates, a binder, a stamp, etc.
- Acorn Sales: www.acornsales.com
- Blumberg: www.blumberg.com
- CorpKit: corpkit.com
- Legal Registrations: You do not have the basic documents to establish that you are a legal entity.
- Business License/ Articles Agreement (The name will depend on the state)
- EIN: This will be issued by the IRS. You need to keep the original document.
- State/County Auditor Tax Filing: Some states require a resale license. Check with your state how to obtain one.
- Resume: You do not have a resume outlining your qualifications to run your business.
- Credentials and Training
- Past work experience that contributes to your current business
