Brumlow and Company, P.C. CPA's

Ten tips for starting a small business

Transcript

1. Brumlow and Company, P.C. Certified Public Accountants A Full Service Accounting and Advisory Firm www.brumlowandcompany.com @brumlowcpa cpa@brumlowandcompany.com
2. 2 0 1 0 A m e r i c a n Starting a new business 1. Develop A Business Plan 2. Entity Selection 3. Register with State, IRS, and Local Gov. 4. Set up a separate bank account 5. Business Licensing 6. Insurance (Liability, Corporate, etc) 7. Marketing Communication & Sales Plan 8. Capitalization and Financial Plan 9. Develop a Business Rhythm 10.Don’t go at it alone, develop advisors and mentors
3. 2 0 1 0 A m e r i c a n 1. Develop A Business Plan What will you be selling?, Who is your customer? Competition?, How will you go to market?, What are the financials? I. Table of Contents II. Executive Summary III. General Company Description IV. Products and Services V. Marketing Plan VI. Operational Plan VII. Management and Organization VIII. Personal Financial Statement IX. Startup Expenses and Capitalization X. Financial Plan
4. 2 0 1 0 A m e r i c a n 2. Entity Selection Control Liability Taxes Administration Sole Proprietorship Total Control of business operations and share of profits Personal and business assets at risk Reported on Sole Proprietor's tax forms None other than obtaining business license and register trade name General Partnership Management and profits shared between partners per Agreement General Partners are generally liable for obligations of General Partnership and other General Partners Pass-Through Entity. Each general partner is taxed directly upon his/her share of profits No formal administrative requirements other than obtaining proper licenses and permits. Limited Partnership General and Limited partners share in the control and profits of the partnership per Agreement Limited partners: not personally obligated for liabilities of partnership General partners: same as partners in a General Partnership Pass-Through Entity. Each partner is taxed directly upon his/her share of profits Registration requirements similar to Corporations, but no burdensome record- keeping or tax filing requirements Corporation Shareholders: ownership rights & elect directors Directors: govern general affairs & appoint officers Officers: manage business operations Neither Officers, Directors or Shareholders are liable for debts incurred by the Corporation or torts committed in conducting the Corporation's business "Double-Taxation" unless "S" Corporation, which is a "Pass-Through" Entity akin to a General Partnership Formal incorporation process and annual registration with Secretary of State. Comprehensive record- keeping and tax filing requirements Limited Liability Corporation Members share profits per Operating Agreement which specifies management procedures Generally, Members risk only their investment in the LLC May be taxed as Partnership or Corporation, depending upon the election filed Similar to Corporation's requirements with regard to formation and operation
5. 2 0 1 0 A m e r i c a n 3. Register with Authorities 1. Federal – EIN 2. State – Dept. of Revenue, Sec. of State 3. Local – Business Licensing, Sales Tax, Etc.
6. 2 0 1 0 A m e r i c a n 4. Set up a separate bank account You should set up a separate bank account… for legal protection, tax advantage and credibility 1. Clean and Accurate Bookkeeping 2. Prove your Business is not a Hobby 3. Separate account required for incorporated business 4. Create a clear audit trail for the IRS 5. Professionalism
7. 2 0 1 0 A m e r i c a n 5. Business Licensing Insure you comply with any and all local regulations and licensing for your type of business and operations.
8. 2 0 1 0 A m e r i c a n 7. Marketing Communication and Sales Plan The living part of your business plan, designed to outline the tactics of the strategic plan and its execution. • What is your Direct Value Statement, how do you convey what you do, why and what value you possess in 30 seconds or less. (impressions are made in 17-34 seconds) • How will you market what you do? • What is your sales process? • What is your value and how do you communicate it. • What is a qualified prospect and how will you get them? • What are your success metrics? • Build your plan using S.M.A.R.T. framework • Build in time to review and revise regularly
9. 2 0 1 0 A m e r i c a n 8. Capitalization and Financial Plan How much money do you need to start up? How much money is needed to get to profitability? What is your variable cost and Gross Margin per transition? What is the value of a customer? And how many do you need to meet your financial goals/obligations? Where will your money come from? Bootstrap, Personal capital, SBA, Angel Investors? Your financial plan should include: • Startup Expenses and Capitalization • 12-Month Profit and Loss Projection • Four-Year Profit Projection • Projected Cash Flow • Opening Day Balance Sheet • Break-Even Analysis Business Financial Tools http://www.brumlowandcompany.com/financial_tools.html
10. 2 0 1 0 A m e r i c a n 6. Insurance Coverage Make sure you connect with an agent and cover your liability, corporate, Errors & Omissions, Workers Comp, Business Interruption, Commercial auto etc…
11. 2 0 1 0 A m e r i c a n 9. Develop a Business Rhythm Create a Rhythm around your Operational and Financial Tasks. The more organized you are, the more you are able to interpret you financial results with your CPA rather than scramble just to get the information together before the next deadline. Bi-Monthly Bookkeeping Tasks -Set aside a day at the beginning or end of the week twice a month to do the following • Enter New Invoices, Pay Open Invoices • Follow up on open customer proposals • Apply customer payments to invoices • Run Payroll • Review Transactions and Categorize expenses.
12. 2 0 1 0 A m e r i c a n 9. Develop a Business Rhythm (cont) Monthly Bookkeeping Tasks -Set aside one to two days each month at the same time to complete the following • Send checks to vendors. • Reconcile your bank and credit card statements. • Review your monthly Financial reports • Review your cash flow trends (expenses and income) • File your Monthly Sales Taxes if applicable • Make sure you have properly documented new vendors and customers (W-9, Tax Exempt, etc) • Send your General Ledger to you CPA
13. 2 0 1 0 A m e r i c a n 9. Develop a Business Rhythm (cont) Quarterly Bookkeeping Tasks Choose one or two days at the very beginning of each quarter to complete these items for the previous quarter. • Prepare your quarterly reports for your CPA and review them for strategic and tax planning (Balance sheet, income statement, AR and AP reports) • File your quarterly sales taxes if applicable • Prepare your estimated taxes if applicable • Insure your payroll taxes are filed if applicable • Set up a meeting with your CPA to review your results to date and establish go forward planning.
14. 2 0 1 0 A m e r i c a n 10. Don’t go at it alone In addition to having your professional advisors, CPA, Lawyer, Banker, Insurance Agent, etc.. An inexpensive, effective way to help your business it with the help of a board of advisers, it is cheaper than a Board of Directors and they do not have a fiduciary responsibility and thus no liability. • to bounce ideas off, • to get their opinion, and ask for advice. • to provide a reality check, • to tell you when you're about to mess up, • to confide in when you're alone at the top. Create your advisory board by… 1. Define your advisory board member profiles. This is a list of skills and connections you want. This will be advisory that will help you build your business as well as mentor you as an executive. 2. The best size for an advisory board is eight to 10 people. 3. Brainstorm your target list.. Ask your friends, colleagues, mentors, vendors, and financiers if they know people who meet the profile you seek. . 4. Celebrate, incorporate, communicate.
15. 2 0 1 0 A m e r i c a n Financial Back office Accounting • Bookkeeping • Payroll • Write-Up • Reporting Strategic Advisory • Technology • Financial • Process • Operations Tax and Audit • Tax Prep • Advise • Representation • Forensics Doc Management • Image and Doc Storage • Retention Management • Access/Control Brumlow and Company, P.C., Certified Public Accountants, a full service CPA firm • Auditing, Tax Preparation, Bookkeeping, Payroll and Advisory services focused on small and mid-sized businesses and individuals. • Serving the Atlanta area for over 25+ years with 2 metro locations. • Our staff and CPA’s have wide array of knowledge and . • Members of the American Institute of CPA’s and the Georgia Society of CPA’s
16. 2 0 1 0 A m e r i c a n How to Engage Us Contact us to set up a no charge meeting to discuss your current situation. We can then determine how we might best help. cpa@brumlowandcompany.com 770-751-6763 Visit our website and sign up for our monthly newsletter www.brumlowandcompany.com Follow us on Twitter @BrumlowCPA Find us on FaceBook and Linkedin