So, you want to be an entrepreneur and be your own boss. Everyone is great a giving you marketing advice or telling you how to set up a website, but how do you get started legally/paperwork-wise? How do I become an LLC? Or should I be an S-Corp? Here is my checklist on how to get started financially.
- Register with your state. Get an LLC started with the Secretary of State. Make sure your company name is available. In Colorado, you can register online and immediately get your LLC #. If you’re not sure if you should be an LLC, S-Corp, etc… Please consult a CPA. Everyone’s situation is different.
- Register with the IRS and get your EIN. https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
- Open a business bank account and keep your personal and business funds separated. I also would encourage you to open a savings account and business credit card too. Later on down the road, we will talk about having a second checking account at a different bank to save your money aside for estimated tax payments. Do a little research on the bank before you sign up. Check fees, etc. I also like credit unions. They are usually free.
- Now you can create a website and pay for a domain. Also, set up a business Facebook page or anything else you want out in the social media world.
- Order business cards (if you wish)
- If you are starting small and only have a handful of banking transactions a month, you can use a simple excel spreadsheet to track your income and expenses. I have a great spreadsheet that I sell for $125. It creates your reports for you. You enter your income and expenses, and the sheet does the rest. BUT make sure you keep track of your mileage. Depending on your industry, mileage can be a significant business deduction at the end of the year.
- If you are larger and have about 25-50+ banking transactions a month. It’s time to invest in QuickBooks Online. As a pro-advisor, I can get you the monthly subscription for 50% off. So make sure you talk to a bookkeeper before you sign up on your own.
- Lastly, make sure you have a great CPA or tax preparer to ask questions throughout the year. Please don’t wait until January to ask them about that large purchase you made last summer. It’s easier to deal with issues as they happen. It would be best to talk to them quarterly anyway because you might need help calculating your estimated tax payments. You don’t want to wait and get hit with a large amount due next April 15th.
If you have any questions or would like some help with your business. You can reach me at Nicolea.firstname.lastname@example.org.