Do you know how you are going to get new clients? Have you thought about your location? Are you a walk-in traffic kind of business, or a referral business? What about your signage? Have you thought about marketing space on your car? What about networking and presenting in front of huge crowds?
There are so many different things to think about when you are looking at opening a new business. Most of them revolve around the business itself, but what about the background stuff?
Below are some of the common "getting started" accounting and setup items that you will need in a Q&A format.
Q: What type of entity do I need?
A: Well, of course, you always want to consult with your lawyer for your state, but here in Arizona an LLC is the most flexible and versatile and easy to use entity. It's cheap to setup (around $650'ish), there are no requirements after it's done being setup (no minutes, no board meetings, no annual fees, etc.). Normally your Lawyer or CPA can set these up for you (so you know they are done right!)
Q: I've heard that LLC's are the "legal" side of it, what about the tax implications?
A: You are right! LLC's can CHOOSE how they want to be taxed, depending on some specific items of course (so ask your CPA!). They can be Sole Proprietorships, Partnerships, S-Corporations, or C-Corporations. Each of the types has it's own set of tax consequences, so it would be good to check with your CPA as to how you should get yourself setup.
Q: How will you handle your bookkeeping?
A: I recommend and use QuickBooks. it is a very user friendly, helpful, and well laid out accounting program that is specifically setup for business. Quicken has a business/personal program, but I don't personally like the way it handles transactions and reporting for business only purposes.
Q: I've heard about an EIN or TIN, what is that?
A: an EIN or TIN is your Social Security Number for the Business, the employer identification number or the taxpayer identification number. EIN and TIN are normally, in conversation, interchangeable.
Well, that's a good start for now,.. I will write a few Q&A session answers each day until I think you've got the full picture! :)
Or, you can always email me if you have a specific question! I would love to answer!
Always yours,
The Tax Goddess.