Why I Created an S-Corporation

Recently I wrote Why a Startup Should Never Start as a C-Corporation. But I really didn’t discuss why I created an S-Corporation. The main difference between corporations and LLC’s or partnerships is the issuance of stock shares. Stock makes it easier to raise funding from angel investors or venture capital firms. But that makes no difference to me in the short term since I don’t have any plans of raising capital. In the long term it is an added bonus.

The reason I’m creating an S-corporation is so that I can serve both as an owner and an employee. My primary reason for doing this is empathy.

It may sound counter-intuitive or even insane to make myself an employee. Each employee costs the business more than just their salary, they cost certain taxes and insurance. For example in Texas I had to register my company with the Texas Workforce Commission and begin the process of paying unemployment taxes. Why then would I be willing to lose money, literally pay extra taxes just to make myself an employee? Again, empathy.

My experiences as an employee have generally been negative. Most companies look at employees as expenses rather than investments, and that is unfortunate. I believe they underestimate the value of happy employees. While big tech firms do offer great compensation, most of the service industry is littered with minimum wage part time workers barely making ends meet. This results in bad service and a bad reputation. The solution?

- Put employees before customers.

- Put customers before profits.

By setting myself up as an employee I gain many benefits:

• Learning how to install and run a payroll system.
• Learning about health insurance and the best options.
• Learning the tax system and how it effects the overall numbers.
• Having infrastructure in place to be able to hire seamlessly.
• Most importantly, having empathy for future employees by going through the process myself.

And really that bottom one is the most important thing. I am building a team of people, not just a money making machine. The most important ingredient in any organization is empathy. By creating an S-corporation and making myself the first employee, I increase my empathy for future employees.

To Do List Update

If you’ve been following this series you know that I keep a running tab of my to do list here as a motivation and public accountability tool.

Here is the list from last week —

1. DONE — Create a Mailchimp landing page.
2. CHANGED — Create a Xero account for bookkeeping and link it to Square. (I’ve decided not to use Xero but instead use Square for payroll and do accounting on my own spreadsheet. This is mainly because Xero had trouble connecting to my bank and I have pretty decent experience doing my own business accounting).
3. ONGOING — Audit the customer experience by conducting dry runs with friends as customers.
4. DONE — Fix the tip recommendations on Square.
5. DONE — Fix the service categories on Square.
6. DONE — Create ad copy and a better slogan than “Cleanliness is Attractive”. (I’m using Cleanliness is Confidence for now but I think I can do better, the ads are done and I will discuss them in an upcoming post)
7. DONE — Create a Free Laundry Sweepstakes with rules.
8. Create a spreadsheet for orders and connect it to the online order form.
9. Obtain Solicitor’s Permit — http://www.dallaspolice.net/SolicitorsPermit/Solicitors_ordinance.html
10. Create a pick up & delivery calendar.
11. POSTPONED — Add business to google maps (as delivery only) using home address. (Since I’m in a temporary living situation it doesn’t make sense to list someone else’s house as my primary business address. I’ll have to figure this out later.)
12. Set up Google Analytics for the website.
13. POSTPONED — Categorize expenses using tax forms as a guide. (I spent a day doing corporate taxes for my other company and the categories were too broad. I’m not sure if this is even necessary so I’m postponing for now.)
14. DONE — Website pages to build — About / Blog / Contest / FAQ.
15. Create a sales plan or daily customer acquisition process that can be measured.
16. DONE — Set myself up as an employee (tips / payroll / time card).
17. Purchase a weighing scale & sturdy basket for weighing.
18. Move automatically deducted expenses from personal to new business account — Strikingly / Apple / Google / T-mobile / Typeform / Mailchimp / Xero.

Next Milestone: OPEN FOR BUSINESS

My next milestone is to become operational which means be able to take orders. I’m very close to being able to do that. I’m only adding a few essential items to the list this week.

1. Create a spreadsheet for orders and connect it to the online order form.
2. Create a pick up & delivery calendar. Link it to the spreadsheet if possible.
3. Set up Google Analytics for the website.
4. Create a sales plan or daily customer acquisition process that can be measured.
5. Obtain Solicitor’s Permit — http://www.dallaspolice.net/SolicitorsPermit/Solicitors_ordinance.html
6. Purchase a weighing scale & sturdy basket for weighing.
7. Move automatically deducted expenses from personal to new business account — Strikingly / Apple / Google / T-mobile / Typeform / Mailchimp / Xero.
8. Order Uniforms.
9. Create Mailchimp Templates, welcome emails, and separate lists for actual customers and sweepstakes entrants.
10. Audit the customer experience by conducting dry runs with friends as customers.

I’m not advertising a big launch. I’m just going to ease into it and test the marketing ROI as I go. Nonetheless, I’m setting February 22nd as my soft launch date, barring any complications.

If you wanna get a better glimpse into my life, Snapchat!

This story is part of a series documenting the journey of a 2016 Dallas startup called Feather. If you would like to read more, here is the Table of Contents for the series.

Previous story: Viability is Subjective

Next story: A Quick Glance at My Marketing Strategy

Thanks for reading!