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How to Start Up Your Startup (J. Ann Dorsey Expert Advice)

3 min read

There are many things that go into starting a new company, and too often new companies fail before they even get started. This isn’t to say that your idea isn’t brilliant, but there are a lot of steps between a great idea and a viable business, and any of those steps can be a fatal pitfall. Good advice and knowledgeable professional assistance can go a long way in helping you make it from point A to point B. My company has helped over 1,000 clients start their own businesses. This guide is not a replacement for professional advice, but I will do my best to give you a good start.

Determine the legal structure.

The very first thing you need to do is settle on which form of ownership is best for you: a sole proprietorship, a partnership, a limited liability company, a corporation, an S corporation, a nonprofit or a cooperative. Yes, there are a lot of options, and there are upsides and downsides to each one. Also, don’t make the mistake of treating yourself like an employer. Treat yourself like an employee from the beginning and make sure the benefit system in place is the one that is most advantageous for your future and your tax savings. A proactive, interested tax adviser can instruct you on which type of ownership is best for you from a tax perspective and can also help you set up a retirement structure.

Write a business plan.

A solid business plan plays an enormous role in starting up your business. You must have a business plan in order to apply for loans or to meet with investors. In addition, a detailed business plan is like a blueprint for your business. It is a reminder of who you are and what you are trying to accomplish. Your business plan should include a mission statement, a company summary, an executive summary, a service or product offerings, a description of a target market, financial projections and the cost of the operation.

Select and register a business name.

The name of your business is key. It needs to say something about your business, be memorable and be available. I don’t just mean the name. Make sure the domain is available as well. Web presence is important in the current business world. Decide on a name that best suits your business. If your proposed business name is available, register it with the county clerk, have it trademarked at the state and federal levels and secure a domain name.

Determine tax obligations.

Now it’s time for everyone’s favorite word: taxes. In the United States, four basic types of business taxes arise: income, self-employment, taxes for employees and excise taxes. I highly recommend getting professional tax advice in this area. I have seen too many promising businesses go under because the owner didn’t understand his or her tax liabilities. The government does not accept “I didn’t know” as an answer. Get the right help at the very beginning.

Secure permits and licenses.

Get a federal employment identification number. Apply for state licenses. Pick up a local tax registration certificate. File for local permits, if required. Even the simplest of things, like putting up a banner to advertise a special, can result in a required business license.

Buy insurance.

Make sure that you arrange for the proper insurance for your business. This will vary according to the type of business. If you’re working from home, be sure that your homeowners insurance covers theft or damage to business assets, as well as liability for any business-related injuries.

Set up the books.

Figure out if you are using the cash or accrual system for reporting purposes and for tax purposes. You will need to determine your fiscal year for the business and set up a recordkeeping system. Again, don’t forgo this expense on the front end. Start from the very beginning with adequate, complete records.

This is just an overview of the major steps in opening your own business. If you have any questions or want more details, feel free to email me and I will do my best to help you.


Ann Dorsey is president of Dorsey & Co. CPAs PLLC of Little Rock. Email her at ADorsey@DorseyAndCompany.com.
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