Do you want to start your own business?
If so, you’ll need to do your homework beforehand, because you have a lot of competition. According to the Bureau of Labor Statistics, approximately 800,000 new businesses are launching each year. That’s a lot of competition, so it is important for you to gain a competitive advantage by planning accordingly.
First things first. You need a reputable attorney and CPA to assist you with starting your own business. Ask trusted colleagues for referrals, because there are state and federal rules and regulations that can affect your business operations.
Secondly, you need to decide what type business entity works best for your business. Do you want to operate as a sole proprietorship, partnership, corporation or Limited Liability Company? You will need to consider several factors when making this decision. Are you going to have employees? What kinds of risks will your business face? Are you willing to take on these risks as an individual?
Use this tool to find the best structure for your business – Free Business Structure Wizard
These are just a few of the questions you need to consider when determining the structure of your organization. However, it’s a good idea to consult both a CPA and attorney when making this decision, as this will affect how you file your taxes and how much personal risk you are willing to accept.
If you’re starting a business, you definitely need to check out CorpNet! Founded by experienced entrepreneur Nellie Akalp, who’s helped over 100,000 small business owners get their start, CorpNet can assist you with filing a DBA (“doing business as”), Forming a Corporation, or an LLC (Limited Liability Company), by completing the process quickly and affordably saving you time and money with fast reliable service. CorpNet packages start from just $79, plus state filing fees. This is SO much cheaper than what an attorney will charge. The site also offers a FREE Business Name Search Feature where you can conduct unlimited business name searches and get your results within 24 hours.
Thirdly, you need to determine how much involvement you want to have filing your taxes, or consider hiring a professional to handle this for you. If you decide to file yourself and want to simplify the process, consider filing your business as one of the following: a sole proprietorship, partnership or LLC. If you choose one of these structures, you can report your business income on your personal tax return and do not have to file a separate business return. This keeps the paperwork to a minimum.
In addition, you need to determine your work structure. As a new company, you may find yourself working from home, initially, or maybe this is your long-term plan. Lucky you. Running a business out of your home may qualify you for tax breaks. For instance, you may be able to receive a tax credit for a percentage of your internet, electricity, and other bills that are business-related. Do your homework and consult a CPA when filing, as there may be stipulations for these tax credits.
Lastly, plan for retirement. When decisions seem to be overwhelming, just remember that many of the initial decisions only have to be made once when starting your own business, so spend ample time making the right decisions.
When selecting a retirement plan, you need to take advantage of available tax incentives Also, you should choose a plan that’s beneficial to small business owners. You might consider selecting a Savings Incentive Match Plan for Employees, which is appropriate for companies with less than 100 employees. You should choose this option if you want to minimize administrative costs.
Alternatively, you can offer a Simplified Employee Pension IRA, contributing up to 25%, maxing out at $53,000. Clearly there are various options, so again, network with other professionals for advice in this area.
When you start your own business, you certainly have your hands full with numerous opportunities. Be patient and allow yourself adequate time to plan, and seek out professional help with those unfamiliar issues. You don’t have to be an expert at everything – you just need to be an expert at one thing – starting and running a successful company.