Starting a Business?

Stepping out with confidence
Why do you need professional advisers?
What type of entity should you choose?
Do you need to register your business?
Do you need a business plan?
What accounting records do you need?
How you benefit from our services

Stepping out with confidence

Starting a thriving business demands a clear focus. Before taking the initial steps, research your business idea thoroughly and objectively to make sure it is viable. Then, equipped with a solid idea, secure adequate financing for your business.

Though the task of establishing a business may seem daunting, following these five steps will help you onto the right path:

Select professional advisers.
Determine the appropriate type of entity for your business.
Register the business with your state and federal governments and apply for ID numbers.
Develop a business plan.
Set up a system for tracking income and expenses.

Why do you need professional advisers?

The expertise of professional advisers is one of the most cost-effective tools you can use. The right accountant, attorney, banker and insurance broker can prevent costly problems and prepare your business for a strong strategic launch.

These advisers will help you determine the type of operating entity to choose, the best way to finance your business and the kinds of liability and casualty insurance you need. In addition, they can advise you about which tax reporting requirements apply to your business and when those reports are due.

In addition to tax consulting and preparation, your CPA can help you find and assess capital and provide financial statements.

What type of entity should you choose?

Today's business owners have many options to consider when choosing the form of business under which to operate.

The two major considerations are protection from legal liability and income tax treatment. The different types of entities to choose from are:

Regular corporation
Subchapter S corporation
Limited liability company (LLC)
Limited liability partnership (LLP)
Partnership
Sole proprietorship

No single answer is right for every business. Your accountant and attorney can help you evaluate the pros and cons of each entity so you can make an informed decision.

Do you need to register your business?

Every state has some form of registration for businesses, typically through the office of the secretary of state.

Each type of entity has different requirements. It is best to consult your attorney about the documents that need to be filed when registering.

For every type of entity, except a sole proprietorship with no employees, you must file Form SS-4 with the Internal Revenue Service. This form tells the IRS that you have formed a new entity, what the name and address of your business is, when you will begin doing business and when you will start payroll.

The IRS will issue an employer identification number (EIN). This number will identify your business to the IRS and others for the life of the business. You will need this number to open a business bank account and file tax documents, among other things.

You must also register with your state's revenue department. It will issue identification numbers to be used for tax filings and sales tax reporting if this applies to your business.

Do you need a business plan?

Many businesses start without a business plan. However, there are many advantages to having one. In some cases, a plan may be required.

If your business will require financing from a bank or any other outside source, a business plan will be valuable in helping you obtain that financing. If you're considering a Small Business Administration (SBA) loan, a business plan will be necessary as part of the application process.

These are the basic elements of a business plan:

Executive summary gives a brief summary of what is contained in the plan document.
Major assumptions state the important assumptions made during the planning process. The statement allows the reader to evaluate the likelihood of an assumption being violated.
Philosophy explains the business philosophy of the company. It tells the reader what is important to the executives of the company.
Definition of the business describes what the business does and why.
Definition of the market specifies the buyers and sellers. It describes the customer base and the factors considered important in the buying decision. An analysis of the overall market size and your competitors is a part of this section as well.
Description of products (or services) stipulates what you are selling (or providing) and why potential buyers (or clients) will need it.
Management structure provides information on the people who will be implementing the plan. It outlines their qualifications and experience.
Objectives, goals and action plans focus on what you intend to do and how you intend to do it.
Financial data focus on forecasts, operations and cash flows. If you're using this plan for financing purposes, this section will be of most interest to those lending the money because it will tell them how you will pay it back.
Appendices provide supporting details.

Not all new businesses will need a plan that is as comprehensive as the one described above. Your accountant can help you tailor a plan to your needs.

What accounting records do you need?

Financial statements and underlying records provide the basis for many decisions made by banks, landlords, potential investors and creditors – as well as taxing authorities and others.

The necessity for well-organized financial records cannot be stressed enough. One of the most serious mistakes is failing to keep good records and making improper or poor business decisions based on inadequate information.

Some initial questions to ask are:

Who will be the users of the financial information? This will determine the frequency and type of financial statements needed.
What questions do you need answered to manage the business? While your business is small, just knowing how much cash is in the bank, how much money is owed to you and how much you owe to vendors may be enough. As your business grows, your needs will become more complex.
What questions should be answered for government or regulatory taxing authorities? Reporting requirements related to payroll, sales and income taxes need to be addressed.
Can you do this yourself or do you need a bookkeeper? This decision depends on how much time you want to spend on accounting functions. If you don't need a full-time bookkeeper, several options, such as a part-time employee, a bookkeeping service provider working on a contract basis or your CPA firm, are available to help fill the role.

How you benefit from our services

Highly trained and experienced staff – Our professionals have years of experience in dealing with the complexities of business planning. Let us help you transform your business vision into reality. Our in-depth financial training and knowledge allow us to present you with business advice tailored specifically for your company.

National access to professionals – Our firm takes pride in its affiliation with CPAmerica International – a worldwide network of CPA and consulting firms. Our membership allows us to make available to you the financial knowledge and resources of thousands of CPAs across the country and around the world.

Planning services – A good business plan should be the basis of your overall operation. Our firm offers in-depth planning services to assist you in making the best decisions for the future of your company. As CPAs and advisers, we can suggest paths that will help ensure that your business and personal objectives are met.

We offer the experience and specialized knowledge to craft a business plan that will truly address your opportunities and future business success.

For more information, please call us to make an appointment.