What service should I use for credit card processing? So gone are the times of leasing expensive machines. Now anybody with a smart phone, tablet, or computer can process credit cards. Two great services: Square and Intuit Payment Solutions. As you grow and your credit card sales are more than 6K a month you can reassess what your best options should be.
What bookkeeping software should I use? Ok, I am biased. I like QuickBooks. It’s what I use. It’s what most accountants and bookkeepers use for small business. I really like QuickBooks online for my mobile business as it allows me to work from anywhere and assign access to my employees and accountant based on what they need to work on. Quicken and Mint.com are also great for businesses that are just starting out.
What paperwork do I need to keep for bookkeeping and tax purposes? Keep EVERYTHING!!! I have a blog post on this here.
How much should I pay myself? This one is tricky because often times your business doesn’t allow for much of a salary for business owners in the beginning. At some point though, start paying yourself what you would pay an employee with your skill set and keep giving yourself raises as you continue to grow.
What type of corporate structure should I be? This one depends on your business, but it’s been my experience an LLC is a solid corporate structure for most business. Some businesses will start as sole proprietors because those are the easiest to start. As a sole proprietor, your risks of liability are greater because you don’t have the protection of being a separate entity like business owners who are structured as an LLC or corporation.
What do I need for an audit? A good CPA? No really the IRS auditor is going to want to see a list of all expenses and the receipts to back up those expenses.
How much should I save for taxes? Start with 10% of all revenue if you are a new business and gradually grow to about 20%. This is also dependent on rather or not you pay yourself a salary and what your corporate structure is.
How do I determine rather someone is an employee or an independent contractor? The laws for each state vary, but in this recession most states are cracking down. See the list here before you decide to pay someone. The fines can be pretty high if you are found in violation of your labor laws so make sure you are choosing the right designations for folks.
What are the best solutions for payroll? When choosing amoungst the big payroll companies I prefer Paychex because they assign you a specific person to handle your account. If something goes wrong I like to know that I can call a specific person and have him or her take care of me. For DIY business owners, QuickBooks payroll is a great option and cheaper too. D Cooper Financial also handles payroll.
What are the first things I should do to start a business? Pick a name, pick your structure, register with your state, and open a business account. Of course there is more but start with these 4 things.
Should I keep a separate bank account? Absolutely! I know people don’t do this in the beginning and it will bite you in the ass when tax time comes and you have to shift through all your expenses to figure out what is what. Plus it makes it harder to hire someone to take care of your bookkeeping for you when your expenses are messy and business and personal gets mixed together. In my experience million dollar businesses don’t mix personal expenses on a regular basis so what kind of business do you want to be?