You’ve finalized your business plan. You’ve acquired capital and assembled a rock-star team. You’ve designed your logo and set up your social media handles. You’re ready to launch your business.
Or, are you?
The thrill of starting a business can be overwhelming. But amid the frenetic joy and anticipation, it’s important to give attention to the less-than-exciting details, too. Here are five things every new business owner should put on their pre-launch to-do list.
1.Gather a team of trusted professionals.
Having the support of professionals keeps you focused on what’s really important—running your business. Consider building a team that includes the following:
- Attorney – to assist with required business filings and general legal advice.
- CPA – to assist with entity type selection, tax planning and preparation, accounting and bookkeeping, and business advising.
- Payroll Provider – to assist with payroll deposits and filing requirements on a monthly, quarterly, and annual basis.
Be sure to tap into the expertise of other advisors, too. There are plenty of successful business owners who have gone before you, and they can offer you valuable advice.
2.Determine your business entity structure.
The most common business entities are LLC, S Corporation, and C Corporation. The structure you choose will impact how your income is taxed, how profits are distributed, and the type of personal liabilities you could face. Be sure to think about your business type as well as your long-term goals, as your decision could impact your business for years to come. Your attorney and CPA can provide insight to assist you with entity selection. Once you’ve determined your business entity structure, you’ll likely want to obtain an Employer Identification Number (EIN) from the IRS.
3.Open a business bank account and credit card.
Having a bank account and credit card that you use exclusively for your business helps with accurate recordkeeping and tax reporting. It can also keep you from missing any tax deductions. Plus, requesting that a check be made out to your business instead of your name enhances your credibility as an established business. When you open an account under your business name, the bank will likely require you to have an EIN.
4.Determine a recordkeeping method.
Good recordkeeping is necessary to make sure you’re taking advantage of the tax deductions for which you are eligible and to support what you’re reporting on your tax return. An accounting software such as QuickBooks can help you keep track of expenses, accounts payable, and even your time. An app that tracks your mileage is worthwhile, too.
5.Set aside a portion of your net income to pay your quarterly estimates.
Once you become self-employed, you may no longer have an employer withholding payroll and income taxes on your behalf. To compensate for this, you may have to make quarterly estimated tax payments to the IRS and state taxing authorities—or else be vulnerable to penalties.
Secure the support you need for a successful launch.
Checking these five to-dos off your list can help you start your business on the right foot. We’re here to help, whether it’s outlining tax implications of an entity type or determining the amount you should pay in to the IRS and state each quarter. If you have questions about your next step as a new business owner, please don’t hesitate to give us a call.