You have decided to start your own business. From the start, it is best to put processes and procedures in place to keep you focused. Here are 10 steps to set-up your business for success.
Open a bank account – having a separate bank account for your business expenses will keep your records distinct from your personal accounts.
Track Expenses – establish a system for organizing receipts and other expenses. There are five kinds of receipts to save: Meals and entertainment, business travel, vehicle expenses, receipts for gifts and home office receipts
Develop a bookkeeping system – you can choose to do the cash method (revenues and expenses are recognized at the time they are actually received or paid) or the accrual method, under (revenues are reported when they are earned). This method requires tracking receivables and payables.
Set up a payroll system – having a system is important if you plan on having employees, because as an employer you are responsible to withhold income tax (federal, state and local).
Investigate import tax - if you plan on importing any of your goods from outside of the country you will need to understand this tax and its impact on your bottom line.
Determine how you will get paid (example PayPal, credit card, etc.) – you will need establish how your customers will pay you for your product.
Establish sales tax procedures – knowing how you will collect, report and pay sales taxes on items sold before you start selling items will avoid headaches at tax time.
Determine your tax obligations (sole proprietor, Inc. LLC) – your tax obligations will depend on how you set up your company.
Calculate gross margins – knowing your margins is important for controlling your budget and defining the amount of money available for payroll, marketing, etc.
Constantly re-evaluate your methods – review your methods to see if they continue to fit and meet your business needs.