Prior to reading please review NOTICE at the end of the article.
Starting a business in today's day and age can be more complex than one would think. The first and biggest question is "What kind business structure should I use?". Unfortunately there isn't a one all, cure all, answer to that question. If you're planning to start a business without soliciting the help from investors then it may be best to start off with a Sole Proprietorship or Partnership. If you have no client's or previous business and have no idea what your going to make for next year, and you're working another job full time job this by far seems to be the best choice. An article I read basically said, if your expecting to make less than $40,000 and won't have employees there's a high probability that you won't need the added protection or tax complexity of a business entity. For myself, I found this interesting as it's general knowledge socially that you should always have an LLC or a INC. Another thing that I had to consider was that I live in California and we have an extremely high Franchise Tax Board tax. It's $800.00 a year if I were to form a LLC or INC. That's a lot of money! That could be more than what I make with this whole year with this venture.
As I continued to research this I also learned on many forums that it's a best practice to make sure that you include a tax accountant as an added expense. This is especially important if you are paying employees and doing your business full-time. I've read some horror stories that ended with hard working folks like you and me owing the tax man bookoo bucks! Before I mentioned added expense because that's exactly what it is, You can expect this as a ballpark figure, a hourly rate for questions is $200.00 hr and to do a schedule C is roughly $500.00 yr. More than likely you'll end up scheduling your quarterly taxes for the year in one sitting. One other thing to add is that if you're filing for an LLC or a INC it's going to be very similar in price to prepare your taxes if your making under a 100k.
So what's the short list to get started:
- Choose a business name.
- File a Fictitious Business Name Statement with the county recorder.
- Obtain licenses, permits, and zoning clearance.
- Obtain an Employer Identification Number.
Check out these resources:
Stay tuned for more information. I plan to update this article as I move forward. If you would like to comment please connect with me directly. My goal with this post is to minimize the efforts for people to find business start-up information.
I am not an attorney, expert, wizard or any other kind relevant source. So if you're sue happy and like to blame others for your own failures this article is not for you. Anything read in this blog are my own opinions and my own thoughts.