Here are the steps to start your own business, and become an independent contractor. It’s really quite easy.
Create an LLC
Create an LLC with the Minnesota Secretary of State. Being a Limited Liability Company, and not a Sole Proprietor, will give you liability protection. The cost is $155 to set up, which is quick and easy online. After that you just have to renew every year for free. Here’s the link to their website.
Create a Fed Tax ID Number
Create a Fed Tax ID Number with the IRS. Also know as a EIN. This is free, and is also quick and easy. It most cases, you will get an EIN right away after filling out the form online. It’s free. Here’s the link to do that.
Create a Business Bank Account
Go to a local bank and create a business checking account using your new LLC name and your new EIN.
Get Liability and Work Comp Insurance
Call your local Insurance Agent and purchase Business Liability Insurance and Work Comp Insurance, in the name of your LLC using your Business Checking Account. The premium for work comp will more than likely be between $500 and $1000 for the whole year, if you do not have any payroll. Yes, you must have work comp even if you do not have any employees. This premium usually has to be paid upfront. Business Liability Insurance will more than likely be between $50 and $100 per month and can usually be paid monthly or quarterly.
In Summary
The steps above should be done in the order they are listed. The estimated upfront total cost is as follows:
- LLC: $155
- EIN: Free
- Bank Account: Free
- Liability Insurance: $225
- Work Comp Insurance: $750
