Alright, you have a business, but a certificate of incorporation doesn’t do anything on its own, and before you go and win your first contract I highly recommend that you have the outlines of your back office set up.
The last thing you want is to win your first contract and then scramble to set up your accounting and banking while you are also gearing up to do the work.
How much will this cost: As a rule there are no fees associated with anything we are going to do, but by having a bank account already set up, and a relationship with an accountant (among other things) already in place you are going to set yourself up for success when you win.
The structure: For those of you that haven’t worked in a contracting company’s back office the chart below shows how most are organized. But of course this is just the average structure and your business isn’t average, its yours! So you will want to think about what makes sense for you.
Your company needs to be able to do all the things on this chart, but you will probably be doing all or most of it yourself, but I recommend that you identify professional services providers that you want to use in each box now so that you are ready to hire them as soon as you win work because:
- Administrative compliance is very important to the government and the fastest way to get in trouble is to screw it up
- Each of these things is controlled by a heavy body of regulations that will take you a long time to learn
- Doing this work is time consuming and you need to be focussed on executing the work you’ve won and winning more, not balancing your books
The following classes have been broken into two pieces
- Things that you are actually going to build today: Things that take a while to put in place and that are basically free (e.g. setting up a corporate bank account)
- Things that you need to plan for now: E.g. identify providers you like and getting the outline for a business relationship hammered out with them
SETTING UP YOUR BACK OFFICE IS NOT A “ONE AND DONE” EXERCISE: The process of setting up your company’s infrastructure and seeking out service providers is iterative, there is no one, “right” order to complete each task. Depending on where in the process of establishing your business you are, you might start at varying points. But the important thing is that you understand and complete all steps and think about how different decisions implicate other steps