Business Start-up Simplified
Business start-up does not have to be complicated, lengthy, or difficult. You can start a business very quickly and simply. Let's assume you are working from home, you have no employees, and you don't need to borrow money to get started. Here is a simple business start-up plan:
Becoming a Sole Proprietor
You can start as a sole proprietor, which requires nothing except a business license from your city. You don't need to register with your state, and you can use your social security number as your business number. To keep it really simple, you can use your name as your business name, so you don't need to file a d/b/a (fictitious name or trade name) application.
Working from Home
If you can work from home, you don't need to find a location and then pay rent to someone else. You can also deduct your home business/office expenses from your taxes.
Business Checking Account
You will need a business checking account and you should be careful to keep your business and personal finances separate, so there is no question that you have a separate business entity.
Business Insurance
You probably don't need business property insurance, unless you have expensive special equipment. You might want to look at liability insurance. If you are doing contract work for someone else, and something happens, you may not be covered under their liability insurance. Check to see if you can get a rider for your personal insurance, or an umbrella liability policy.
Find a Tax Adviser
If your business is simple, your tax return will be too. You will be filing a Schedule C with your personal 1040, and most competent CPA's can help you. You should check with your CPA as you start your business to make sure you are keeping track of all deductions. Then you only need to check once a quarter and at tax time. Depending on where you live, you might not have to spend more than $500 for the year on tax advice. This cost, of course, gets deducted from your income to reduce your taxable profits.
Set up an Accounting System
You will definitely need to set up a simple business accounting system. You can use online resources or financial software to make it easier. But since you are doing this to maximize your deductions and minimize taxes, spend the time to start out right by keeping track of all business expenses.
Certainly there is more you can do, including setting up a different business structure, hiring employees, and finding a business location, but when you are starting out or if you just want to remain a solo business owner, you can do well with these minimal steps to start-up.
