Simple Steps for a Quick Setup
Opening up your own business is one of the most exciting, fulfilling things you can do. Unfortunately, in the midst of carrying out your vision, it’s easy to forget about the details of accounting or to find yourself unable to keep up with the tax requirements and other business paperwork.
If you want to avoid feeling overwhelmed, take a few minutes and follow these important steps. They’ll keep you focused and on the right track:
The easiest way to keep yourself on track is to put a comprehensive organization plan in place. Dedicate a single folder or envelope to all of the bills, receipts, and business correspondence that come in each month, then make sure that at the end of each month you address each and every item and file away that month’s folder. This is a far better approach than tossing everything into a box or drawer and letting it all get jumbled up, only to need to be sorted come tax time.
Determine What Type of Entity Your Business Will Be
One of the first things that you will need to decide is whether you will be organizing as a corporation, a sole proprietorship, a partnership, or an LLC. Each of these has its own advantages and disadvantages, and the decision you make will determine a great deal about what forms you need to fill out and what taxes you will pay. If you are uncertain, an accountant can be a great help in making this decision.
Set Up a Federal I.D. Number
Every business needs to have a number that it uses for tax purposes. If you are running your company as a sole proprietor, you can just use your Social Security number, but if you’re opting to organize as a corporation, a partnership, or any other type of entity then you will need to apply for an EIN number. The process is easy and just takes a few minutes once you’ve logged on to the IRS website, www.IRS.org
Create a Business Plan – It Only Needs to be One Page!
Most new business owners hear the words “business plan” and cringe, but the truth is that when you’re a start-up, it’s a fairly simple and easy process that will help you keep your costs to a minimum. All you need to do is simply and succinctly write an overview of what your goals are, answering the following questions:
- What is your business’ mission – why are you creating the company?
- What is your business’ goal - what do you hope to accomplish?
- What are you going to do to achieve those goals?
- How are you going to do the things that will help you achieve your goals?
- What are the small steps that you need to take?
Rather than trying to create the type of robust and intimidating document that businesses need when trying to get funding, these answers are all that a start-up business owner really needs to include in their initial business plan. Having it in writing will keep you focused and provide you with something tangible that you can refer back to in order to ensure that you are following your initial dream.
Figure Out Your State’s Tax Requirements
Paying your taxes means far more than sending in what the federal government requires. Your state will have its own requirements, deadlines and forms, so make sure that you check their tax website to make sure that you have everything you need, and that, if necessary, you have registered your business.
Keep Your Personal Money Separate From Your Business Money
Though you may be tempted to open a special business account for your business, all that you really need to do is to set up a free checking account with the same bank where you have your personal account. What is most important is that you keep all of your business’ money, both incoming and outgoing, separate from the account that you use for your personal expenses. This will make things much simpler when it comes to paying taxes and recording expenses.
Though these steps may seem daunting, if you take them one at a time and think through each step, you’ll be able to quickly address each one and have set yourself up for success. If you need assistance with any of these decisions or in setting up any of these accounts or practices, call our office today to set up a convenient appointment.
For over 10 years Jorge Gomez has been helping small business owners. Let him help you get over the startup hurdle. Call 818-925-9959 today to discuss your situation.