Congratulations on deciding to start a new business! It is empowering to become your own boss and to pursue your dream of starting a business. However, there is a lot to learn about setting up a business, and there is a lot that needs to be done in the beginning. Here are three tips from a bookkeeping services professional on how to give your business a financial head start:
1. Establish a Business Entity
One of your first actions as an entrepreneur should be to establish a business entity–whether it is a Sole Proprietorship, an LLC (Limited Liability Company), or a Corporation. Do your homework and consider consulting a lawyer to find out which type of entity will best serve your business. A Sole Proprietorship is fairly easy to set up, but has more liability than an LLC (which offers protections for the proprietors). Or, it may be preferable to form a corporation, which will better position your company for outside investment.
Separating your personal finances from your business finances is a great way to get organized, make tax time easier, and even save money. Set up a bank account that you use exclusively for your business, and also get a credit card that you use only for business expenses. It is helpful to consult with a CPA to learn about business expenses, tax guidelines, and best practices regarding managing your business bank account.