As time goes on, big decisions begin to pop up that can affect your ability to do business going forward. Consider each of these 3 big decisions every small business needs to make as well as our tip on how to decide what is best for you and your business.
One of the first steps in setting up your business is getting it registered with the federal and local governments. Depending on where you live and what type of business this can affect your taxes, permits, obligations, restrictions, and so much more.
Your hands are probably a bit tied when it comes to where you set up your business, but you do have some control over how your business is structured. There are 4 main types of business structures. They are Sole Proprietorships, Partnerships, Corporations, and S Corporations.
Tip: Check out the IRS website on each of the structures. With each structure, they explain a bit about who this structure would best fit, the types of taxes you are responsible for, and what forms you need to complete.
If you are using excel or relying just on your bank account then you are in for a doozy of a tax return! Not only can this cause some major problems with the IRS, but you may actually miss out on deductions! Not to mention, the CPA that does your taxes will likely charge more to get all of the information together.
So let’s say you know you need bookkeeping software, but where should you turn? Many quickly download QuickBooks because it is a very popular software. Which is great! QuickBooks provides a great product and an awesome option for tons of businesses.
However, it may not be the best option for your business. Consider the type of business you are in and if there are any bookkeeping software programs out there that fit your needs better.
Tip: QuickBooks is great, but if you are a startup we recommend checking out Xero. If you are a non-profit, give Aplos a try!
How you collect payment may feel like a quick choice, whether that be cash, credit, Paypal, or another online service – until you see the fees. Maybe it isn’t the fees, maybe you find you need automatic invoicing and collection.
These are all tiny factors to consider early on because once you get started, your current clients may be resistant to wanting to change methods frequently.
Tip: Check out a system like Stripe or Square. It looks professional and you can purchase add-ons later like recurring payments
These are all big decisions every small business owner will make but it is important to keep one thing in mind, they can always be changed. If you find the business structure you chose is not working, you can change it! It does require paperwork and some time, but these things can be fixed. Just like your bookkeeping software and how you collect payments, even though they are big decisions and can cost you money, nothing is permanent.
If you are struggling to tackle any of these big decisions, contact us we can help you move forward.
This publication is designed to provide information on federal tax and accounting laws and/or regulations. It is presented with the understanding that the author is not rendering legal or accounting services.
This text is not intended to address every situation that arises or provide specific, strategic tax and/or accounting planning advice. This text should not be used solely to answer tax and/or accounting questions and you should consult additional sources of information, as needed, to determine the solution to tax and/or accounting questions.
This text has been prepared with due diligence. However, the possibility of mechanical or human error does exist and the author accepts no responsibility or liability regarding this material and its use. This text is not intended or written by the practitioner to be used and cannot be used by a taxpayer or tax return preparer, for the purpose of avoiding penalties that may be imposed.