5 Steps for Starting a Business
As mind-bogglingly dull and headache-inducing the minutiae of business planning can be, mindful preparation and attention to detail now drastically improves the chances of success for your small business.
Mandatory paperwork, filing requirements, licenses and the rest lay the foundation upon which you'll build your business. Here are several important issues to deal with now, so you can avoid problems later.
Legal and tax advisors
The immense complexity of corporate tax law is a vast labyrinthian mess that requires training and experience to navigate. A good CPA will be able to ensure that your business remains compliant, while also saving you money within the tax code. You should also consult an attorney to protect your business, customers and yourself. Intellectual property issues, like copyrights and trademarks, as well as general business contracts often require an expert.
Choose a structure
The type of business structure you use will be determined by a number of things, which your new CPA and attorney will be able to advise you on. Each has different tax rules, reporting rules and legal protections for owners. Sole proprietorships and partnerships may be the easiest to start, but they also come with the most personal legal and financial risk should things go wrong.
Through incorporation, your business becomes a legal entity. Your attorney and CPA can advise you in which state to incorporate. Each state has their own laws governing business entities. Florida, Nevada and Delaware have relatively favorable incorporation laws. The process has become rather simple, with many states offering online services. There are also businesses that specialize in filing incorporation applications.
When your business legal exists, you must have a separate, business only bank account. This keeps the 'corporate veil' intact, limiting personal liability.
Setup account services
Your business requires detailed accounting. A bookkeeper can manage the day-to-day receivables and payables, at a cheaper rate than your CPA. But your CPA should handle the larger tax planning concerns and give advice for financial decisions. Accounting software makes it easier to stay on top of things, but regular account reviews by your CPA will catch potential problems.
Starting a business is an exciting and stressful time. Don't skip important steps now, because a little problem now can result in massive failure later.
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