1. Have a Business Plan - A well-conceived business plan is critical to the success of your business. It is a road map that shows how to get where you want to go and may be required to obtain the necessary financing. The Small Business Administration (www.sba.gov) has extensive information on business plans.
2. Choose the Entity that is Right for You - One of the first choices you will face is the legal form in which you will operate the business. Should it be an unincorporated sole proprietorship, a partnership, a limited liability company, a regular corporation, or an S corporation? Each of these forms has both tax and non-tax advantages and disadvantages that must be weighed in conjunction with your own plans and personal situation. Although selecting the right entity cannot ensure success, selecting the wrong entity can prove costly. Consider events that go beyond the formation stage like retirement planning and selling the business.
3. Set up a Good Recordkeeping System - Having a good accounting software program or recordkeeping system allows you to know your bottom line. It also allows for budgeting, forecasting, and filing your tax returns. Every business operates to make money. A proper accounting system allows you to know if you are making money.
4. Know Your Filing Requirements and Your Tax Responsibilities - Make sure you know what forms are required and when they are due. This helps avoid unnecessary late filing interest and penalties. Depending on business type, you need to make sure you are paying the taxes you should be. Whether it is USE Tax paid on imported merchandise for resale, payroll taxes, or Federal Excise taxes.
5.Engage a Good Banker, Accountant, Financial Planner, and Attorney - All startup businesses are burdened with requirements to make initial filings, elections, and registrations, but the extent of that burden varies from entity to entity. Having the right team helps you make the right decisions and implement them quickly so that you can concentrate on success.