Business and Practice Startup

The How and Why of Starting a New Business

You have an idea and a goal of becoming your own boss, so you have decided to start your own business. Like many entrepreneurs before you, excitement and enthusiasm abound. Before you jump in headfirst, take the time to do some market research, develop a business plan, set some realistic goals, and create a network of support. The success of your business may be quick or it might take longer to establish. Either way, it needs to start with a solid foundation.

What Do You Need to Start a Business?

First, consider your reasons for launching a business as that will drive some of your decisions. Are you looking to become your own boss? Do you have a unique product or service that meets a market demand? Do you want more flexibility in your work/life balance? Is there a financial goal you want to meet? These are all valid reasons why launching a business is the right option for you. Understanding the reasons will help you develop the right business plan. Contact the U.S. Small Business Administration and look at the resources they have available. They offer guidance on planning, launching, managing, and growing small businesses. They also have funding program information including loans, grants, and investment capital.

How to Create a Business Plan

Your business plan provides the structure to get you started and the process of creating the plan will help you determine your timeline and goals. A traditional business plan allows you to go into detail for each section and requires more work upfront. The leaner version of a business plan uses the same structure, but is a higher-level summary with only the key points listed.

The Small Business Administration (SBA) is a good source for business plan templates.

Steps to Starting a New Business

Once you have your business plan, you will need to walk through these 10 steps to set up your business structure.

Determine the entity structure
Name the business
Apply for a Federal Employee Identification Number (EIN)
File articles of incorporation/organization with the state
Obtain state identification numbers and accounts
Choose an attorney
Choose a financial institution and obtain financing
Choose an accountant and accounting system
Set up a payroll system
Obtain liability and workers’ compensation insurance

Services Offered: How SVA Can Help

Business professionals need easy access to information to make timely decisions. SVA has what you need, when you need it. Choose a topic below or just contact us directly. Our expertise is ready anytime you need it.

When setting up your accounting system, review the options available to you. Many software solutions, such as Intuit QuickBooks® and Sage Intacct®, are cloud-based and offer affordable pricing.

You will want a software that can grow with you and gives you the financial reporting required by your lender and accountant.

Learn more about accounting software options.

Utilizing an experienced accountant as an advisor, you will need to establish how you will handle the following areas of your business:

Choosing your entity structure will require understanding the tax considerations that come into play based on if you choose a C-Corp, S-Corp, LLC, sole proprietorship, or partnership structure.
Choosing your accounting method takes an understanding of the facts and circumstances the IRS considers when preparing the required elections and forms.
Start-up costs will need to be reviewed to determine if they should be expensed, capitalized, or amortized for tax purposes.
Budget planning and forecasting is a critical tool in the planning process. There are different forecasting models and tools your accountant can review with you to help you identify the best revenue and expense forecasting methodology.

BIZ TIP: Business Entity Types: Which is Best For Your Business?

Tax planning will help you minimize your tax liability and maximize the available credits you can benefit from.

Some of the areas to talk with your accountant about are buying vs. leasing equipment, evaluating depreciation methods, and multistate/Nexus tax planning. As more businesses sell online and across the U.S. and beyond, you will need to plan for the impact of multistate taxes on your bottom line.

Learn more about our business tax services.

A critical step in starting and running a successful business is having good financial records. Efficient and effective records will help you:

Monitor the progress of your business
Prepare your financial statements
Identify sources of income
Keep track of deductible expenses
Track your basis in property
Prepare your tax returns
Support items reported on your tax returns

This is an area where accounting expertise at the start will ensure you have the records you need, when you need them.

Learn more about our accounting services.

Resources

sva-certified-public-accountants-eguide-the-financial-reporting-manual-2023

The Financial Reporting Manual: A How-To Guide for Small to Medium-Sized Businesses

Accounting accuracy is required for every business as it measures the organization's financial health. The eGuide discusses the importance of accounting software and procedures, and why data processing is an essential part of it all.

Learn More

sva-certified-public-accountants-eguide-the-definitive-guide-to-business-tax-credits-and-deductions-2023-25-1

The Definitive Guide to Business Tax Credits and Tax Deductions

This eguide covers different tax credits and deductions available to businesses, as well as what to look for in a tax advisor, choosing a tax-advantaged business entity and more!

Learn More