You’re a whiz at fixing computers. A flurry of compliments came at you when co-workers got a taste of your coconut cream pie at the last pitch-in. Does that mean it’s a great idea to start a small business?
Some business owners make running one look so simple that it seems like anyone can start a business. The prospect of going into business for yourself can be very exciting and the rewards great. But there’s a lot of hard work involved as well. Diligence, patience, and consistency are key – especially at the start. A business doesn’t grow overnight.
If after taking these things into consideration you still want to start a small business, here are a few steps before taking the plunge.
Talk with a Few Business Owners
Get a business owner’s opinion of owning and operating a business. This will give you a gaze into your day-to-day-tasks and financial obligations. Ask an owner of one of your favorite local businesses. If it attracts you, you’re more apt to take the opinions to heart and think in realistic terms.
Talk With Your CPA about Tax Ramifications
Most entrepreneurs are unaware how to handle small business taxes their first year in business. After all, there are different tax rules for businesses than there are for individuals. A CPA is the best resource to give you an estimate of what your taxes may be based on your business model. You may find that there are financial obligations you didn’t consider when calculating your costs.
Talk With Your Attorney
How should you structure the business? Should you incorporate your small business, will you be a limited liability company, a sole proprietor, or some other entity? Your attorney can outline the pros and cons of each form of incorporation based on you business model. This can save you time and money, which is particularly important in your first years.
Create a Business Plan
While you may enjoy fixing computers or baking coconut cream pies, the success of your business is based on whether or not it’s needed in your area. Creating a business plan will help you take an objective look at the details. Demographic studies will require research. Your local library is a great place to start.
Speak With a Payroll Processing Company
If you decide to take on employees, there are certain expenses involved. Speaking with a payroll processing company like The Payroll Department, will help you, as an employer, determine payroll fees. Owner Teresa Ray can give you information so you’ll be able to determine how much of your budget you should use for payroll services. It will also help you determine how many employees you can actually afford to take on.
Talk With Your State To Find Out About Sales Tax, If Applicable.
In some states, you’re required to complete an application for a sales tax permit. They can also advise you of taxpayer seminars conducted in your area. These seminars can give you a better understanding of collecting the proper amount of taxes through your business.
After gathering all the information, you will be in a better place to determine whether small business ownership is right for you.
-Melissa of The Payroll Department Blog Team