Starting Your Spray Foam Contracting Business – Part 2

So you’ve decided to start that spray foam contracting business you’ve been dreaming of.

Awesome!!

The world needs your expertise.

People need spray foam in their homes, barns, trailers…everywhere, really…

So you’re doing a good thing!

Yeah, after you’ve decided to start a business, there is a lot of hullabaloo to wade through.

We know.

It’s kinda ridiculous.

But ya know what?

You only have to do most of it ONCE to set your business up for serious success.

And putting in the work now will save you headaches – and money – later.

So, what comes after finding your niche, understanding business costs, making sure you can purchase spray foam materials, and deciding on the perfect equipment for your business?

(If you haven’t read our blog on how to tackle these first few steps, check it out here!)

If you’re ready to get this show on the road, we suggest picking a business structure, choosing a name for your business, and registering for an Employer Identification Number with the IRS!

Start those engines…

Ready…

Set…

*BANG!*

(That was the cue to start the race, dude. LET’S GO!)

Pick a Business Structure

Okay…we admit it…starting a business is not a quick jaunt around a race track.

If you’re ready to spin your wheels and get nowhere fast, try getting a business off the ground without thinking things through.

That’s the worst.

So learn from our mistakes.

Annnnd…don’t do that. All right? All right.

After jumping into the spray foam contracting race, though, the first thing we suggest you do is pick a business structure for your newly-budding company.

Business structures define required taxes, may add levels of protection between personal and business assets, and take into account who owns what in your company.

If you’re in business for yourself, by yourself (in the United States), and you just start, you own a sole proprietorship.

Sole proprietors and their owners are the same entity, as far as taxes are concerned, so you have the luxury of simply starting. However, this type of business structure can only involve one person – who owns, operates, and controls all of the business assets.

If you have multiple people starting a company together, things have the potential to get hairy fast – unless you define your business structure from the beginning.

Business structure helps determine liability if something goes wrong in your business – and which (if any) personal assets can be involved in a dispute, if that happens.

Choosing a structure, therefore, is worth serious consideration.

Common business structures include sole proprietorships, partnerships, and limited liability corporations (or LLCs).

Check out the Small Business Administration’s website for more information detailing the different business structures.

Once you’ve chosen a structure for your business, it’s time to give it a name!

Choose a Business Name

Naming your spray foam contracting business can be a challenge – but have fun with it!

There’s no need to stress over this step.

As a good rule of thumb, you’ll want the name you choose to point back to you, the type of business you operate, or the niche your business fills in your industry.

You’ll also want it to be easy to remember.

Keep in mind that, while essential, the name you choose is only a tiny piece of a successful business.

What matters most is that you do your work well, and do it reliably.

Need more inspiration to find a name for your company?

Consider what you want your business’s legacy to be.

You can’t know what that legacy will actually be – but you can use a name to help push things in a direction that make sense for you and your ideas.

Why are you starting your business?

What are you planning to accomplish with it?

All masterpieces start with an idea.

Even giant corporations – like Google and Amazon – started from nothing.

Maybe your business dreams aren’t to conquer the world and become a household name – but crazy things happen when you bring an idea into reality.

Creations take on a life of their own.

View your spray foam contracting business as a creative masterpiece that will grow and change as you do.

How do you want people to refer to your business for now?  You can always change the name later, if you need to.

You don’t know what your business will look like in a year…or three years…or 10!

It will evolve with time, and so will you.

Just watch!

Okay – once you’ve chosen a name, it’s time to officially get this business started!

Register Your Business

Apply for an EIN

The next step in this journey is applying for an Employer Identification Number (or EIN) so the federal government – and the world – knows your business exists!

Talk about breathing life into an idea, eh?!

“Why do I have to get an EIN?” you ask?

Well. You don’t necessarily have to (depending on the type of business structure you operate under).

But.

Everybody – and every business – has to pay taxes.  

…At least in the US of A.

The IRS keeps track of people, businesses, and taxes based social security numbers and employer identification numbers.

Very bureaucratic. But it works!

The way you pay taxes in your business depends on the business structure you choose to register with.

If you are a sole proprietor, you can – but are not required – to apply for an EIN.


As a sole proprietor, you pay self-employment taxes, but you don’t file separate returns for business and personal taxes – because they are considered the same thing.  Thus, you can use your social security number for tax purposes on both fronts.

Just because you aren’t required to apply for an EIN, however, doesn’t mean you shouldn’t.

An EIN adds an extra level of protection against the shenanigans that identity thieves like to get up to.

A business owner’s social security number is tied to the EIN for their business…

So, if you are a sole proprietor, you don’t need to give your social security number out to anyone for the purpose of business…if you have an EIN to give them instead.

Nice, right?

All that being said, if your business is not a sole proprietorship, you are likely required by the IRS to apply for an EIN.  (You can make sure here.)

But don’t worry! It’s a free and straightforward process.

To apply for an EIN, visit the IRS’s website, mail in an application, or fill one out in person.

If you choose to apply online, it only takes a few minutes, and you’ll receive your EIN immediately! 

Once you’ve obtained an EIN, voila! You have officially started your business!

YOU DID IT!!

Well done.  

Obtain Necessary Permits

Every city and state has different requirements for operating a business, many of which revolve around what type of business you own and how it is structured.

As such, you may be required to apply for state and local permits to be a contractor in your area.

…And it is best to figure this out before needing one on a job site!

If you are unsure whether or not you need to obtain permits to operate your business in your area, contact your local small business administration or chamber of commerce to find out.

Better safe than sorry!

Conclusion

Well, it’s official!

You own a spray foam contracting business.

Give yourself a well-deserved pat on the back, bud.  You’ve accomplished a lot thus far!

There are very few people who follow through with this sort of thing, you know.

We tip our hats to you for the courage it took to get where you are and make a toast your future!

A future that Freedom Foam & Equipment is honored to be a part of.

Give us a call if you need anything during this business-building process.  We are happy to help!

In our next post, we’ll explore how clients will contact you – and how they’ll pay you.

Until then, take it easy!