Starting a Business
Starting your own business is a complicated and exciting endeavor. There are several steps you should take to make sure you start off on the right foot, including a variety of financial and legal boxes to check off before opening your doors.
Barrett has experience helping business successfully take off. Whether you’re a small, one-person business, or will be taking on several employees in your endeavor, Barrett can help. Here are some general tips for starting a business.
1. Open a bank account
A business and its owner are separate entities. Prevent problems and stress by opening a dedicated bank account for your business.
2. Track business expenses
Entangling personal and business expenses is a common pitfall for new business owners. Establish a system of separation early and stick to it. Some of the things you want to keep receipts for are:
- Business Lunches
- Out-of-town business travel
- Vehicle-related expenses
- Business gifts
- Home office expenses (e.g., your new standing desk)
3. Develop a bookkeeping system
Many business owners handle accounting in-house. Make it easy on yourself and track receivables and payables. There are two general methods you can use: the accrual method which tracks revenues once earned, and cash basis, which tracks revenue and expenses as they are paid.
4. Set up a payroll system
In order to abide by local, state, and federal law, you should establish a payroll system before hiring anyone. Barrett’s team of business and corporate attorneys can help determine to which laws you need to adhere.
5. Keep on top of import and customs taxes
If you import or export goods or services to countries outside of the US, you need to be aware of pertinent taxes and their impact on your bottom line.
6. Determine how your customers will pay you
You’ll have to ensure that your business account is set up for incoming payments. There are also several methods your customers could potentially pay: credit card, online payment, check, etc. Making it easy on your customers to pay you can not only serve as a quality services to your customers, but also can help keep your accounts receivable balance down.
7. Establish sales tax procedures
Sales tax varies by state Knowing how you will collect, report and pay sales taxes on items sold before you start selling items will avoid headaches at tax time.
8. Determine your tax obligations
Your tax obligations will depend on how you set up your company. It is important to talk to a professional about which entity formation will work best for you and your business. Barrett's business attorneys can help you decide if a LLC, partnership, corporation, or other entity is right for you.
9. Calculate gross margins
Knowing your margins is important for controlling your budget and defining the amount of money available for payroll, marketing expenses, etc.
10. Constantly re-evaluate your methods
As you and your business grow it is important to review your methods and procedures to see if they continue to fit and meet your business needs.
Whatever your business needs, Barrett is here to help you. From minimizing tax liability to setting up an employee handbook, we have someone who can help you and your company.
Contact an attorney today for help with setting up your business to avoid trouble, stress, and expenses down the road.