If you’re starting a new business, a little planning will go a long way. I recommend research on the industry. You should determine the upfront costs and the profit margin you can expect. Determine how you will fund the new business – personal savings, investors, and/or loans? Put some thought into these questions.
The next step is to talk to an attorney and a CPA. The attorney can advise you on legal matters like liability protection and personal asset protection. The attorney can recommend an entity structure for your new business. A CPA will also have recommendations on a structure. The CPA’s recommendations will be based on tax advantages and disadvantages for your planned business activity.
Also during this time, you should estimate your monthly expenses. A budget will be helpful in the initial months as your business ramps up. Once the entity is created, you will need to get a tax identification number for the entity. Your attorney or CPA can help with this. Once you have the tax ID number, you should open a separate bank account for the business to have a record of all income and expenses. This makes it easier for quarterly and year-end tax return filing.
If you will have employees, you’ll want to be sure the company’s withholding and payroll taxes are paid in a timely manner. These are just a few items to consider when starting your business.
