Starting a business - need help understanding...

[cryptic]

I would like to start a small business down the road...

The main reason I have been hesitant of starting a business is because of all the "business" details I find overwhelming.

In addition to product liability insurance, a DBA name, tax ID, business license, what about these?

• Do you do your own taxes?
  
• Do you hire a CPA to do your taxes?
  
• What is considered tax-deductible? (what does it mean?)
  
• What is itemized taxes?
  
• Inventory? (What do you need to keep track of? how often?)
  
• Do you need to report taxes frequently, or just once a year?
  
• Is there a book that explains what you have to do or keep track of in your business?
  
• Did you create a business plan first before opening for business?
  
• How did you learn how to run your business?

I have a million other questions, but these will do for now to point me in the right direction. I just find the "business" side of it so tedious and complicated. If someone can help me see it in a more simplified way, I would greatly appreciate it Don't worry, I'm not starting anything until I understand all this stuff. Thanks.

[Mark]

Can't really help with them questions, but if this will be a home based business, the first thing you need to do is contact your local planning/zoning commision to find out if you can have a business like this in your home. I went to check into getting my Tax ID and business license and i could get them, but the lady at the state info center told me to talk to the zoning commision first just to make sure i could do it from my home. Glad i called them before getting my tax id and DBA, cause they said "No way" can i do that out of my home. I then asked them about all the people making home made crafted items out of there houses to sell at craft fairs and flea markets, farmers markets etc. She said thats illegal too, according to the zoning codes. Of coarse, if your planning on having a store of your own, just forget all that i just wrote.

[Budgie]

• Do you do your own taxes?
  
• Do you hire a CPA to do your taxes?
  
• What is considered tax-deductible? (what does it mean?)
  
• What is itemized taxes?
  
• Inventory? (What do you need to keep track of? how often?)
  
• Do you need to report taxes frequently, or just once a year?
  
• Is there a book that explains what you have to do or keep track of in your business?
  
• Did you create a business plan first before opening for business?
  
• How did you learn how to run your business?

I found these two books to be helpful with taxes and record keeping.

422 Tax Deductions for Businesses & Self-Employed Individuals (422 Tax Deductions for Businesses & Self-Employed Individuals, 3rd ed)

by Bernard B. Kamoroff

Small Time Operator

by Bernard B. Kamoroff

I definitely hire someone to do my taxes though because I don't want to screw it up and she can usually find more deductions than I would even know of. I only report taxes once a year because my business is still really small. And just about all I've learned about running a business I read in books.

Hope this helps a little bit.:smiley2:

[StacysScentsations(DH)]

I would definatly hire someone to do your taxes. When starting a business you should always do 2 things... talk to a laywer and talk to an accountant. Money well invested and not that expensive. An attorney will tech you how to get creative selling products through your home like getting a po box or virtual office and setting up a .com and running everything through the website and your po box as opposed to your home address.

[cryptic]

Cool thanks for the info and advice! Internet-related stuff, no problem (I did web design for several years, search optimization, online marketing resources, etc.) Business stuff, that's the tricky part for me. I can see why it's so much easier to just hire a CPA and let them do all the accounting stuff for you, less of a headache

Thanks! I will check out the books!

[DragonWorks]

I definitely agree that you MUST get a CPA to do your taxes. Having a CPA do your taxes as an indicator to the IRS that you consider this a 'real business' not just a tax write-off to pay for your hobby. Also a CPA can also help you decide if you need to incorporate. For many people, sole proprietorship is the best choice. I decided to go with LLC (limited liability Corp) rather than full "C" incorporation. There is good and bad about both...you just have to decide what is best in your situation. But, you need to decide that relatively early because it will affect how you are taxed.

There are a number of good business resources out there that are free for small business owners. One I have found helpful is SCORE.

http://www.score.org/

They will help you with mentoring and coaching and they have good online resources for developing a business plan....which is strongly suggest you do. It helps you think through a lot of important things in an organized manner.They have online articles, templates and examples of business plans.

You'll also need a 'for business use only' credit card. If you get one through one of the big banks like Chase/Bankone, they have alot of free business resources on their website.

Check out your resources and don't get overwhelmed...although that's easy to do!

Hope that helps,

Nina

www.BlackCreekCandleWorks.com

[The_Dallas_Texas_Dean]

• Do you do your own taxes? NO
  
• Do you hire a CPA to do your taxes? Yes
  
• What is considered tax-deductible? (what does it mean?) For the most part, anything that you spend money on to design, build, create, operate, promote or maintain your business is tax deductible. ( DO NOT take this literally without speaking to your CPA, but it is a general explanation.) Everything from Wax to Insurance is deductible.
  
• What is itemized taxes? It is where you list each item separately in "groups" that have been set up by your accountant. Keep receipts:wink2:
  
• Inventory? (What do you need to keep track of? how often?) Inventory Control Sheets that will need to be created by you. You should maintain a "running" inventory to keep things simple. You will need to maintain Daily, Weekly, Monthly and Annual records for Inventory, Sales, Expenses, Feedback/Surveys, Client Records etc.
  
• Do you need to report taxes frequently, or just once a year? Quarterly
  
• Is there a book that explains what you have to do or keep track of in your business?
  
• Did you create a business plan first before opening for business? Yes
  
• How did you learn how to run your business? Mentors, Mentors, Mentors!!! ( Also, read everything you can get your hands on and attend every symposium/convention/class that is available to you.) Be prepared to hire the people you need that have the expertise to set you up for success. DO NOT try to open a business on a "shoestring". Make sure that you have enough capitol to sustain you through at least a year. DO NOT waste money, but DO NOT try and cut corners when it comes to Image or Quality.

I tried to answer as simply as possible. I have owned my own businesses for 30 years. I can't imagine not being a business owner. It is rewarding beyond measure. That been said, you will work 10 times harder when you work for yourself than you will ever work when you work for someone else. The good news about being the sole proprietor is that everything gets to be your way, and you reap the benefits from your decisions and hard work. The bad news is that only YOU are responsible for those decisions and the buck stops with you. Not every decision you make will be right. As long as you learn from your discoveries ( I call them discoveries, NOT mistakes) than you will be fine...enjoy the ride!

Michael