As an entrepreneur planning on starting a small business, it is essential for you to understand all the paperwork that needs to be done. This is critical in order to get the business up and running quickly and functioning smoothly thereafter. This piece serves as a roadmap for starting a small business.
You've got dreams in your eyes and a thousand things on your mind. Business planning, customer acquisition, financial projections... these are but a few of the issues that you're grappling with. In the midst of all this, the last thing you need is to get bogged down by mindless paperwork and dull regulations. However, the truth is that inadequate attention to such issues have been many a business' undoing. You need to take care of all those mandatory requirements in order to turn that dream into reality.
The following is a quick checklist of the procedural and statutory issues that you need to deal with while starting a small business.
Select a structure: You must evaluate the pros and cons of different types of business structures before deciding what's best for you. Since you are planning to start a small business, the most likely choice is between a sole proprietorship and a partnership deal. While these are the easiest to get off the ground, there is a higher element of personal liability.
Incorporate your company: Your business becomes an official entity through the process of incorporation. You may need to decide where you want to incorporate because different states have different laws that may be beneficial or unfavorable. Incidentally, Delaware, Nevada and Florida are three of the most popular states.
These days, incorporation is a relatively simple process and can even be done online. Also, there are a number of specialists who can help you with this.
Get an Employer Identification Number (EIN): This is a number provided by the Internal Revenue Service (IRS) for tax purposes. Think of it as your business' social security number. The IRS provides information about the circumstances under which an EIN is required. Should your business need one, the person who is helping you with the process of incorporation can take care of this as well.
Open a bank account: Once the official entity is created, open a bank account exclusively for your business. This helps you to separate business and personal finances and facilitates the audit of business accounts.
Finalize accountant services: You will need to maintain detailed accounts throughout the course of your business. While a bookkeeper can help with routine accounting needs, it is advised to use the services of a qualified Certified Public Accountant (CPA) for financial advice and tax planning. Always ensure that you have a grip on the financial health of your business -- a regular review of accounts statements is a sound practice.
Software programs such as "QuickBooks can help ease the process of maintaining accounts.
Get a legal and tax advisor: Business taxation laws are very complex. While starting a small business, you will need to understand the impact of various tax systems on your company. Hire a CPA to help you find the way through such laws. This is of utmost importance as you are obligated to fulfill tax responsibilities.
In addition, you will certainly have some legal considerations like copyrights, contracts and agreements. A legal firm will advise you on such aspects when starting a small business.
If you'd like to explore these issues further, "The Business Side of Creativity" might serve as a useful reference. Of course, you'll need to follow that up with a team of professional advisers at the time of actual start-up.
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