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Top 10 List for New Businesses
Create a Business Plan! Have something in writing detailing your business plan. Establish goals, procedures and policies; set deadlines for reevaluating your business, etc. Meet with your financial and business advisors to make sure you’re on the right track. Ensure that you have a budget and projection, at least for your first year in business, preferably for the first two years, and consult with professionals to compare.
Determine your business structure. What type of organization will you create? Will you operate as a sole proprietor or as a business entity (corporation, partnership, etc.). If you have set up an LLC – elect the tax reporting entity.
Select your business location. Depending on the type of business, location can be a significant factor in your success. Carefully research traffic and visibility of your location, as well as practicality and cost. Consider starting your business at home, to save money, until you start turning a profit.
Apply for an EIN. You’ll need an identification number to open a business account, to give to clients, or if you’re going to hire employees. You’re better off providing an EIN number to vendors instead of your social security number, to avoid identity theft. Go to the IRS’ EIN page (http://www.irs.gov/businesses/small/article/0,,id=102767,00.html) to apply.
Open a Business Banking Account. Having a separate checking account for business expenses will save you time and money when it comes to preparing your business tax returns. Provide your EIN number when opening your business account.
Apply for all necessary permits with local, state and federal agencies. Check with your city and county for necessary licenses and permits. Remember to register with the State Board for a resale number if you will be making merchandise purchases or sales. Don’t forget the Fictitious Business Name application if required in your area. If you will be providing money services such as money orders or cashing checks, you may need to register with the Department of the Treasury.
Determine your insurance needs. Get your insurance policies in order and make sure you have workman’s compensation coverage if you will be hiring employees.
Compare and research vendors and service providers. Do your homework before signing any contracts or entering into binding service agreements. Check prices, quality, and reviews of companies that you will be working with, as their reputation will affect yours.
Obtain necessary business equipment. Make a list of the equipment that you will need for your day-to-day operations. Schedule equipment by date of necessity as you begin your business operations – remember to budget for purchase or lease costs.
Put an enrolled agent (“EA”) on your team. Getting good tax advice at the outset will ensure you pay the lowest tax rates and receive the highest tax credits available to your business. Enrolled agents are the only federally-authorized tax practitioners with unlimited rights of representation before the IRS. EAs demonstrate competence in taxation and report hours of continuing education to IRS. You can find an enrolled agent in your area by visiting www.NAEA.org .