May 1, 2019
Starting a new business is such an exciting adventure! The ability to use your talents to earn money on your own terms can be so fun. But there are a lot of back-end things you need to do as you start your business to avoid running into problems later on. Here are the basics.
As a new business owner your first step is to open a new bank account that is separate from your personal cash. This doesn’t necessarily need to be a business checking account, especially starting out, as banks sometimes require business paperwork to open a business account. So even if you end up opening up an official business account later, get started with a separate non-business account now. You don’t want to miss keeping track of any of your startup costs. Additionally, it’s important to keep all of your transactions separate, both for clarity and because some business structures require it. Everything down the road, from bookkeeping to taxes is way easier if your business transactions are completely separate from your personal account.
When you work with other businesses you sometimes have to hand out a tax ID number so they can file a 1099 MISC for you. The last thing you want to do is hand your Social Security Number (SSN) to a stranger. Enter the EIN. An EIN is a tax ID number for your business, and it’s quick, easy and free to apply for one. Go here. Every business owner should have one, whether you have to hand it out or not.
Should you be a sole proprietor, an LLC, an S-Corp? There are so many options, how do you know the right one? Most businesses, especially if they’re not in a litigious industry (read: likely to get sued) can be a sole proprietor. A single member LLC is also a good option (treated the same as a sole proprietor for tax purposes but with additional legal protection). Every business is different so my best advice is to find a lawyer or CPA you trust to help you make this decision. You want someone with the heart of a teacher, not someone who is going to try to get you into a complicated legal structure so they can bill you for it (and for the complicated tax returns in the future).
It’s so much easier to track your bookkeeping from the very start than to try to catch up later. Pick a bookkeeping software and connect your new bank account and you’re good to start recording your transactions. And since everything is rolling through your new bank account it’s all right there in one place! Need help picking the best software for your business? Check out my Bookkeeping Jumpstart where I help you pick a software for your specific business and answer your accounting questions.
You know bookkeeping is vital to the success of your business. Stop procrastinating and start getting it done with this simple checklist. You’ll get:
The money is in the list. I’m sure you’ve heard that before. Social media fans and followers are wonderful, but good old Zuch can change everything whenever the whim strikes and there is nothing you can do about it. The only thing you own is your list, so start building it right away. Don’t waste too much time picking an email service provider, just pick something simple and affordable and get moving. You can always switch to something more robust when you need it later. I recommend MailChimp if you are just getting started, but there are several good options out there. Just don’t miss out on the opportunity to stay connected with your fans.
Anyone can set up a social media account at any time so it’s important to get out there and reserve your business name as soon as you can. Available social media pages (and website domains for that matter) should be something to consider as you name your business. You want to make sure that the name isn’t taken. Even if you don’t have the time and resources to build out a robust online presence, make sure you get out there scoop up your name before someone else can.
Undoubtedly there are a ton of things you’ll need to do to get your business off the ground but don’t miss these first steps. You’ll thank yourself later.
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