Starting a business has become easy and convenient in the United States.
You can operate from home in your pajamas, even. While that is true, this is just the beginning. Running a business takes a lot of effort, time and energy but the satisfaction of being your own boss, time management and flexibility has proven to be such an attraction to start one. You as the business owner will be the driving force as you set the tone and direction of your company. The success of your business will depend on so many factors including your management style.
Before starting a business, always know this: What is your purpose? What problem are you solving by creating your business?
Solving compliance problems as well as helping businesses get organized is part of my tax practice.
To attract clients, they will want to see your value whether you are providing service or selling a merchandise.
Here are some tips based on what I know best:
Determine what kind of entity you are setting up.
In the US, you have a few choices. You can be a sole proprietorship, an LLC, an S Corp or a C Corp. It is best to speak to an attorney for the legal set up of your company. Why do I suggest this? If you treat setting up a business seriously by spending the money to set up an entity, you avoid thinking of it as a hobby. It is also important to check with the city requirements in terms of permits and business license where you will be operating your business.
Know your target audience or clientele.
If you are planning to sell a product, look at similar businesses. Do your research on their pricing, look at your source of materials and labor and work on a markup so you can make a profit. The general rule of thumb is 1/3 labor, 1/3 overhead and 1/3 profit.
After you’ve done your research, begin with a website and social media strategy especially since a strong digital presence has become so vital and important. Use social media to your advantage to gain traction.
Set up a good accounting system.
Start with opening a business bank account and a business credit card as soon as your entity is set up. Doing so encourages you to have a smoother flow of transactions and easier bookkeeping because your business transactions are properly segregated from your personal transactions.
Create a business road map.
This is one of the crucial items on your list. This will be your guide to your business journey. It can be a simple write up of 10-15 points you want to accomplish with the timeline you’ve set. It could include your immediate plans, hiring, marketing strategy moves, etc. Because having a new business can be very overwhelming — a road map will help you get organized.
Remember, do one thing at a time and complete each task so you are not in over your head and things are not left hanging.
Lastly, make sure you are familiar with all the deadlines: federal and state tax filing deadlines, payroll tax and sales tax reporting deadlines.
It is important that you are not delinquent with any of these filing requirements so your business can run smoothly without interruptions or any liens on your account because you have missed filings or payments.
I have been a business owner for 13 years now and I would not change a thing. Sure it is not easy, but the joy of serving clients as well as the flexibility it allows to raise a family has become a far more important factor for a balanced life.
Your drive will make or break your business so make sure that it is the kind of business that you love to do, that it has potential for profitability. Have the proper mindset and focus. It will be hard at first and it could be a long journey to see the light, but do not easily give up, persevere and you will reap the fruits of your labor.
Follow us on Instagram (@maslertax) and Facebook (Masler & Associates, Inc.) for more tax tips. Our goal is for you to keep more of what you make.
Sharon Masler is the Managing Partner of Masler & Associates, Inc. She has 25 years in finance and accounting. Her background includes planning and performing audits, reviews and compilations of financial statements, primarily for medium-size, privately-held companies in manufacturing and distribution industries.
