Entrepreneurship is the process of designing, launching and running a new business, which is often initially a small business. The people who create these businesses are called entrepreneurs.
Starting a business of your own can be exciting and financially rewarding! It also comes with a lot of responsibility, and a new family member, and his name is Uncle Sam. One thing about family, is we try to avoid any family disputes, to do this, you must follow the rules and regulations, which govern starting and running a business. There is no excuse, for ignorance of the Law!
According to the IRS.. if you are selling goods including online, or offering any type of service to the general public with the intention of making a profit, then you are in Business!
THE FIRST MISTAKE
The first mistake many people make is they start a business without a plan. The very first step to starting a business begins with planning and vision! I can appreciate the scripture in Proverbs 29:18 which says where there is no vision, the people perish, the same rule applies to starting a business without a vision your business it is destined for failure.
1. BUSINESS PLANNING….
A Business Plan is a document that clearly describes your vision, including all the details of your business operations. If you are planning to seek financing for your business then a business plan is a must!
SBA offers a free Business Planning Tool you can use to create your business plan step by step. You can save it, and go back and finish it at any time and print out a hard copy when you complete it.
2. THE FICTITIOUS BUSINESS NAME
If you plan to operate your business under a different name than your own, you may be required to register your trade name with your state or local government. This form of registration is known as “doing business as” (dba) or fictitious name filing. Check with your State office for information on Business Name Registration.
3. DO YOU NEED A EMPLOYER ID?
Determine whether or not you need an Employer Identification Number (or EIN)- generally, if you are going into business for yourself and you are not starting a corporation or non-profit organization etc., and do not employ anyone, you do not need an EIN. Your social security number is your EIN. You will only need an EIN if you answer
“Yes” to any of the following questions.
4. CHOOSING A BUSINESS STRUCTURE
When beginning a business, you must decide what form of business entity to establish. Your form of business determines which income tax return form you have to file. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation.
A sole proprietor is not only one of the common forms of business but it is also one of the easiest type of businesses to form. You are not required to do any kind of special incorporation filing. A sole proprietor is someone who owns an unincorporated business by himself or herself.
A limited liability company (LLC) or corporation helps protect your personal assets in case a law suit is brought against your business for products sold or services rendered. But may require the help of a professional to start. Learn more about the different types of business structures..
5. LOCAL ZONING LAWS
Local zoning laws, also called ordinances, establish what business activities can be carried out in a particular municipality. You need to get an approval, and any required permits from zoning, before setting up a business in a particular location including your home. Many city and county zoning and planning agencies require all home-based businesses to get a Home Occupation Permit.
6. BUSINESS LICENSE /PERMITS
General Business License
As a business owner you are normally required to purchase a yearly general business license. Contact your county clerks office for more information on applying for a general business license and/ or any other licenses or certificates you may be required to carry based on the type of business you are starting. If you plan to run a home business from property you are renting you may also be required to get permission from your landlord acknowledging he is aware of the fact that you are starting a home business on his premises.
Sales Tax Permit
If you intend to sell taxable goods or services online or offline, you may be required to collect state and local sales taxes from your customers, on behalf of your State revenue office. You are responsible for applying for a sales tax permit if the state where business will be located charges a sales tax or levies a gross receipts or excise tax on businesses. Check with your State Revenue office for more information
Health and Safety Permits
If you plan to sell food to the public or to other businesses a Health Department permit is needed. Permits are normally issued by your county government, an inspection of the business premises may be required,. Additional permits you may need is a food handlers permit or certification for a food service or food preparation business depending on your state. You may also be require to apply for a permit and inspection from the local fire department.
If you plan to make any construction changes to accommodate your new business venture, check your local government’s building and planning department. You may need to apply for an construction permit.
Some Local community ordinances restrict the type, size, or location of signs placed on your property. Check with local city or town zoning board or other local authority.
7. STATE BUSINESS REGISTRATION
Most States if not all, require you to register your business with your State Revenue Agency. State Revenue offices issues a variety of business permits/ licenses depending on the type of business you are starting and the needs of the business.
8. PAYING ESTIMATED TAXES
9. ANNUAL BUSINESS TAX RETURN FILINGS
a. Federal Business Tax Return(s)
Every business owner is responsible filing and paying business taxes due.. Your profit and loss from business is reported on the Schedule C Profit and Loss statement and attached to your personal tax return. The following video tutorial will walk you through the business taxes, which effect small business owners.
b. State Business Tax Return(s)
You are also required to file a annual State tax returns with the State Revenue Office.
c. Local Business Tax Return(s)
Depending on your business location and local city requirements, a local city tax return, and a business privilege tax may apply. Check with your local city clerks office for full details on their tax requirements for small businesses doing business in the city where your business will reside..