When creating a small business, finances are a crucial part of any plan. It’s important to have a plan in place for how to handle the finances, as everything will need to be carefully tracked for management and taxing purposes. Use the tips below to start thinking about how the finances will be managed for the business to make sure everything is done right. 

Keep Business and Personal Separate

It is imperative to keep business and personal expenses separate. It can get confusing to go through receipts at the end of the year and wonder if dinner was business-related talking to a client or if it was just a dinner out with family or friends. Instead, by having a business bank account and using that for business-related finances, separate from any personal finances, it’s easier to keep track of everything. 

Track Everything and Save Receipts

Save all receipts and invoices for the business. This can be done in files or on the computer, whichever is easier. It is recommended to save paper copies and scan them so they’re saved in two different locations, just in case anything happens. Track all income and expenses for the business, as well as any debts or credits, to have a full overview of the financials for the business. 

Pick an Accounting Method

Pick a method of accounting to use, then stick with it for at least a year. The two main accounting methods are accrual or cash, and they both operate differently. They also have their pros or cons, so it’s important to investigate them and decide which one will work best for the business. Take time deciding this to make sure it’s easy to keep on top of the financials for the business and to make sure that the accounting is done consistently. 

Use Professional Help That’s Available

Accountants can help track and handle business finances. This may be a good way to get started, as they can help with determining the right accounting method, tracking all income and expenses, filing taxes and more. With professional help, it may be possible to save money on taxes as well as have a better idea of the current financial status at any time. 

If you’re ready to launch a new business, take the time to think about how managing finances will be handled and make sure everything will be done right. It’s far better to do it right from the start than to scramble and make mistakes when it’s time to file taxes. 

The post Managing Finances for a Small Business appeared first on QuickStart Docs.

Ready to start a small business? The process isn’t as overwhelming as it might seem at first. It just requires knowing what the 10 steps to starting a small business are and taking the time to make sure each one is done right.  

Do Your Research

Market research is crucial before launching any business. Look into the business idea to learn more about the competition that’s out there, how successful it might be, and if any things can be done to make the new small business stand out. 

Name the Business 

Picking a name can happen at any time before all of the official paperwork is filed, but it’s a good idea to do it at the beginning. Start thinking of a name now. 

Start Creating a Plan

A business plan is an essential part of any business. Where will initial funds come from? How will the business operate? Each detail for the business should be in the plan. 

Gather Funds

No matter what kind of business it is, funds will be needed to get everything started. Something run out of a home office still requires money to cover fees, initial products to handle services or sell to customers, and other items that will cost money. 

Pick a Legal Structure

It’s possible to start a sole proprietorship, but another legal structure for the business may be a better fit. Learn more about the differences between a sole proprietorship, an LLC, a corporation, and more to pick out the right legal structure for the business. 

Get an EIN

An EIN, or employer identification number, is needed for taxes and other purposes. It’s best to get this right from the beginning as it may be needed on any paperwork for the business. 

Get Permits or Licenses

Depending on the location, business type, and more, permits and licenses may be needed. Get these early so they’re obtained and ready to show if needed. 

Get a Bank Account

It’s best to separate personal and business funds, so get a bank account specifically for the business. It should be in the business name and completely separate from personal accounts. 

Start Operating

Once everything is ready, it’s time to open the doors and start accepting customers. Market the business thoroughly before opening day and be ready for sales. 

Continue to Expand

Think about marketing and other details to continue bringing in new customers and get a plan in place to help the business thrive. 

If you’re ready to launch a business, now’s a great time to do so. Follow the 10 steps to starting a small business here so you don’t miss anything and are ready to go for opening day. 

The post 10 Steps to Starting a Small Business appeared first on QuickStart Docs.

Liability is Limited

One of the biggest positives of creating an LLC is that liability can be limited. The owner or owners of the company are not personally liable for anything the company does, so they don’t have to worry about losing their home, vehicle, or assets in case there is a lawsuit of any kind.

Easy to Get Started

It’s easy to set up an LLC, which is another positive. It takes filing a little bit of paperwork and paying some fees. Though the fees can vary by state, they are relatively inexpensive and can be worth it to have the liability protection that comes with setting up an LLC for a business. No lawyer is needed to set up an LLC, but it is a good idea to get help to make sure everything is done right.

Limits on Limited Liability

One of the disadvantages of an LLC is that the limited liability isn’t foolproof. If the business transactions and personal transactions aren’t separated, it may be possible to lose assets to creditors or in a lawsuit. Additionally, if fraud is committed by the business, it may be possible for personal assets to be taken to cover the victims’ losses.

Self-Employment Taxes Paid

Another disadvantage is how taxes are done. With an LLC, taxes are passed through to the owners, so self-employment taxes are paid on any income the owners receive from the business. This can make doing taxes more complicated, so it’s often necessary to work with an accountant to find and take the full amount of any tax deductions to reduce tax liabilities.

If you’re ready to launch a business, creating an LLC may be an excellent idea because of the number of benefits you could get. However, it is important to note that the different pros and cons of creating an LLC. This way, before creating an LLC, it’s possible to find out how to mitigate or prepare for any of the potential downsides. Learn more about creating an LLC today to find out if that’s the perfect option for your business.

The post The Pros and Cons of Creating an LLC appeared first on QuickStart Docs.

Debts Without Forming a Corporation

When a business owner does not file to form a corporation or other type of business, their business is considered a sole proprietorship. With this business type, the business owner is fully liable for anything the business does. What this means is that when there are debts owed and they cannot be paid by the business, the business owner is personally liable for the debts.

What Happens to Assets?

If there is no protection for the business owner, creditors can go after the owner’s personal assets to cover debts the business owes. If the business owes money and cannot repay those funds, the creditor could put a lien on the business owner’s bank accounts, their home, or their vehicle until the debts are repaid. If the debts are still not repaid, it’s possible for the creditor to take ownership of the assets and sell them to get the funds.

Forming a Corporation

A corporation is a type of business that offers limited liability to business owners. The shareholders who run the business are not personally liable for any debts the corporation may have. This protects the business owners or shareholders from having to pay off debts owed by the business in most cases.

Debts After Forming a Corporation

If the corporation does owe debts, the creditors can only go after the assets owned by the corporation. That means the assets owned by the business owners or shareholders are off-limits. There are certain exceptions to this, such as if a shareholder personally guarantees the corporation’s debts, but as long as the business owner is careful, their assets should be safe.

While no one expects anything to go wrong, there is a lot on the line if a business owner ends up owing money to creditors and the business cannot pay those debts. Instead, business owners who are interested in protecting their personal assets from any potential debt the business may have will want to investigate forming a corporation.

The post How Does Forming a Corporation Protect a Small Business Owner’s Assets? appeared first on QuickStart Docs.

Not Setting the Right Goals

Setting goals is hard. Most business owners simply set goals stating they want to be successful – if they set goals at all. These aren’t realistic. It’s important to make sure the goals set are measurable and obtainable. Goals for a certain amount in profits within the first five years or selling a certain number of products per month are attainable and can be easily measured, so it’s easy to see what’s working and what needs to change to move forward.

Doing Everything Alone

Many business owners try to take on as many roles as possible to minimize how much they spend on help. However, no one can do it all. Business owners who take on too much will end up burning out faster, which can lead to fatal mistakes for the business. Instead, seek help when needed and spend the money on professional help for areas that require it.

Not Planning for Internet Presence

Internet presence is crucial today. Failing to create a website or not creating an effective website can be a huge downfall for any business. Whether the business owner creates one on their own or hires a developer, it’s crucial to put time and effort into creating an amazing website and then marketing it properly to draw in more visitors and create more customers.

Not Paying Attention to Competition

Many new business owners downplay the competition or ignore it completely, assuming that they have a better product, so they’re going to be more successful. Paying attention to the competition and what they’re doing is crucial, however. Instead, take an in-depth look into the competition, learn how they’re successful, and do it better.

If you’re ready to start a small business, take some time to make sure you do it right. Many businesses fail in the beginning, but yours doesn’t have to be one of them. Avoid the frequently made mistakes when starting a small business listed here and make sure you continue to learn how to improve your business so it will continue to see success in the future.

The post Frequently Made Mistakes When Starting a Small Business appeared first on QuickStart Docs.

Two Simple Steps to Create an LLC

There are only two steps needed to use Quick Start Docs to create an LLC. First, the business owner will need to fill out the online form. Then, the business owner will need to go help their business thrive. It really is that easy to get started. There’s no need to fill out forms for different governmental agencies, figure out where and how to submit anything or struggle over unfamiliar terms that might be used in the different paperwork.

Form in Any State

With the easy-to-fill-out form, an LLC can be created in any state. Different states have unique laws regarding LLC formation, but that doesn’t matter when Quick Start Docs is involved. The business owner just fills out one form and the company does the rest for them depending on where the business is formed.

Only Takes Seconds to Get Started

Completing all of the paperwork for the LLC, not to mention filing everything and following up on it, can take a long time. However, Quick Start Docs makes this a lot easier. It only takes around 90 seconds to fill out the form. Once that’s done, the company handles the rest. In just seconds, the business owner can fill out all of the paperwork needed for their LLC, then sit and wait for the rest of the work to be done.

Starting an LLC can be confusing, especially if you’ve never done it before. There are various governmental agencies to file with, a ton of paperwork to do, and a lot of time needed to get it done. That is why you should choose Quick Start Docs when starting a business. If you’re ready to launch a new business and want help with the process of creating an LLC, check out Quick Start Docs now. They provide the help you need to form an LLC in any state with just a few seconds spent filling out a form. Take a look now to see how easy it can be to start an LLC.

The post Why Choose Quick Start Docs When Starting a Business? appeared first on QuickStart Docs.

What Is Arbitration?

The arbitration process works a lot like conventional forms of litigation. An arbitrator will act as a judge, take testimony from both parties, then decide how to resolve the dispute. It’s like going to court, but with less formality and lower expenses for both parties.

The Pros of Arbitration

Small companies with limited resources generally prefer arbitration for these reasons:

• Arbitration is less expensive than lawsuits.
• The process can be completed in months, rather than years.
• There’s no right to discovery unless required in arbitration provisions.
• Many arbitrators have specialized experience.
• There’s no way to appeal a binding arbitration ruling.
• The cost of hiring an arbitrator is usually lower than that associated with going to court.

The Cons of Arbitration

Not all small businesses like arbitration. Some businesses are opposed to this ADR technique because it:

• Takes weeks to initiate
• Can lead to loss of secrecy in the absence of TROs (temporary restraining orders)
• Can go poorly in the absence of an appropriate arbitrator
• Can wind up being appealed to the courts

What Is Mediation?

Mediation involves hiring a neutral evaluator, called a mediator, to help two parties reach a resolution outside of court. It’s a less formal proceeding than arbitration, though successful mediation will still end in an enforceable settlement agreement. Many businesses prefer mediation as the first step towards dispute resolution.

The Pros of Mediation

Small businesses tend to prefer mediation over arbitration for several reasons. Mediation:

• Is the most inexpensive solution
• Allows parties to arrive at a settlement without being told how to resolve the dispute
• Is less likely to create bad blood between two parties

The Cons of Mediation

Like arbitration, mediation also comes with some distinct drawbacks. They include:

• The lack of a binding method for ending the dispute
• The possibility of disputes getting drawn out
• The possibility of moving from mediation to arbitration or litigation in the absence of a suitable compromise

What’s the Best Choice?

Most experts consider mediation to be a better alternative for small business owners. However, there are some cases where arbitration, or even formal litigation, presents a better option. Business owners should consider all their options before deciding how to proceed when handling a serious dispute.

The post The Differences Between Arbitration and Mediation appeared first on QuickStart Docs.

Pros and Cons of an LLC

LLCs are easy to set up and though they do cost money, it’s usually inexpensive. There aren’t a lot of strict guidelines for creating an LLC, either, which makes this an attractive option for small business owners. The downsides include the way the business is taxed and how the LLC is operated. The LLC is considered a pass-through business, so it does not file a tax return. Instead, the business owner files the incomes or losses with their personal tax return and will need to pay a self-employment tax. It is important to be careful with how the LLC operates, as the operation does need to be separate from the owner, not a shell company for the owner to operate under.

Pros and Cons of an S-Corp

An S-Corp is a different business status that offers tax benefits if there are distributions to employees. If the business is doing well, any remaining profits after payroll and taxes can be distributed to the owner. This is taxed at a lower rate than self-employment taxes, so depending on the profits each year, this could save the business owner a significant amount of money. The downsides include the strict guidelines needed to form an S-Corp, the costs to form it, limitations on passive income, and the limited salary that can be paid to the business owner to avoid issues when filing taxes.

Both LLCs and S-Corps can be a good way to operate a business, but it is important to determine which one to pick carefully. LLCs are easier and have fewer requirements, but an S-Corp could have tax benefits that outweigh the downsides. Business owners considering becoming an LLC or S-Corp may want to speak with an accountant before making any decisions, as this will help them find out what an impact each will have on their taxes and whether the disadvantages of either are something to be concerned with.

The post What are the Differences Between an LLC and an S-Corp? appeared first on QuickStart Docs.

When There’s One Owner

If there is one owner, the business owner will include the income or losses on their personal tax return. An LLC is a pass-through business according to the IRS, so the LLC does not need to file its own tax return. The business owner will simply include the earnings or losses with their personal taxes and make any payments that may be needed to the IRS.

When There are Two or More Owners

When there are two or more owners, an LLC is still considered a pass-through business, but it works a little differently. Each owner will claim their percentage of the earnings or losses on their personal taxes, as well as their percentage of any deductions or credits. If there are two owners, for instance, each business owner will claim half of the earnings or losses for the year. They’ll also each be able to claim half of the deductions or credits.

When There are Employees

If the business has employees, it will need to collect and pay the payroll taxes, which include unemployment, social security, and Medicare. The employee’s share of these taxes should be withheld from checks throughout the year, along with income taxes and filed using special forms at the end of the year. The business owner will pay their share as well as the employee’s share throughout the year, so there shouldn’t be a large amount due at the end of the year.

Other Options

Instead of filing taxes as an LLC, business owners can opt to file as a c-corporation or s-corporation. Certain forms will need to be filled out so the taxes are applied appropriately, but this does not change the business type. It only changes how the business is taxed.

LLC taxes can get complicated, so it’s a good idea to have an accountant run through the options as well as their pros and cons before the end of the first year. This way, you know how to file your taxes and include the LLC taxes, no matter how you decide to file.

The post How are LLCs Taxed? appeared first on QuickStart Docs.

The Basics of an LLC

An LLC, or limited liability company, is a business structure that separates the business from the owner. This means that if something happens, the business can be sued, but the owner cannot. This protects the business owner’s personal assets like their home from lawsuits against the business. An LLC is not taxed on its own, though a tax return may need to be filed. Any income or losses will be filed by the business owner on their personal tax return.

Pros and Cons for LLC Status

An LLC provides business owners with protection and can be a flexible way to own the business. Management is flexible as well, and an LLC status can help the business owner establish credibility. Customers are more likely to do business with an LLC instead of just the business owner. Disadvantages include the cost to get started and maintain the status as well as the difficulty in transferring the business if the owner decides to sell.

Should a Business be an LLC?

Business owners should weigh the pros and cons themselves to determine if having the business be an LLC is a good idea for them. For most small business owners, the protection offered can outweigh the disadvantages of having an LLC, and it’s possible for business owners to get started easily. It’s important to learn more about what an LLC entails, such as how it is created and what the fees for formation are, before beginning, so business owners fully understand what the potential changes may be when the business becomes an LLC.

If you’re thinking about starting a small business or you already own one, no matter how small, becoming an LLC can be a good idea. It’s best to talk to a professional before making any decisions, because changing the business status can have an impact on taxes, how the business is run, and more. Learn more now to see if this is the right option for your business or if a different status may be better.

The post What is an LLC? Should Your Business Be One? appeared first on QuickStart Docs.