So you want to be in business? Every year thousands of new businesses fail. Here is a checklist to help you be among those who succeed:
1. Develop a business plan – Write a business plan that includes your business objectives and your strategy for achieving them. Include a realistic start-up projection for one or more years of income and expenses.
2. Select competent advisors – you need a lawyer, banker, accountant, insurance agent, marketing expert, and other professionals as required by your business. These professionals handle a variety of business problems every day. They make excellent sounding boards for proposed transactions.
3. Choose your business entity – The form of business entity that you choose can make a difference in the taxes you pay, the costs of doing business, and the amount of paperwork required. Please consult with your tax and legal advisors before you make your decision. Here is a list of your most common choices:
- General partnership
- Limited partnership
- Professional partnership (health, law, engineering, architecture, accounting, actuarial science, performing arts, and consulting)
- C corporation
- S corporation (be sure to file Form 2553 with the IRS within 75 days of organization)
- Personal service corporation (health, law, engineering, architecture, accounting, actuarial science, performing arts, and consulting)
Limited Liability Company (LLC)
4. Have an attorney work with you to set up the necessary legal agreements – You need to have agreements between the principals of the company that address such issues as ownership, separation due to death or resignation, dissolution, allocation of profits and losses, management responsibilities, and other issues pertinent to your business.
5. Obtain a federal identification number – You may use your social security number only if you are a sole proprietor with no employees. All other business entities are required to obtain a federal identification number. Use IRS Form SS-4 to obtain this number. You can obtain the number by telephone from the IRS (Austin Service Center) by calling (512) 460-7843. You will still need to file Form SS-4.
6. Register with the state of Texas – Contact the Texas State Comptroller to get a sales and use tax number, and various other registrations (alcohol, gasoline, etc). Contact the Secretary of State to incorporate and file the appropriate business entity documents.
7. Assumed name – Contact your city and county clerk to register your business.
We will assist you with loan applications, pricing, credit policies, cash flow needs, cost controls, and other management issues.
If you are interested in starting a small business, give us a call for a no-charge initial conference. You will see how we can help your new business be a success!