Business and Nonprofit Formation

Are you forming a new business? The first bit of advice is to do your homework. Going into business is a significant investment of time, money, and resources. You want to ensure that you’ve researched the market thoroughly to ensure there is a viable market potential to do well in your prospective field. You have to plan every step of the way. Financial planning is paramount, as everything in your business will require money. We call those initial expenses start-up costs.

If your business requires supplies, you’ll have to budget for that. If your business needs office space, you must also include that. Your location may matter depending on the time of your business and who your target customers might be. Most companies must obtain state licenses and permits to operate legally. Choosing the right accounting system is crucial. So many accounting systems are available, some very expensive, others more affordable. You must get a software package that works within your budget and serves your business needs.

One of the most common mistakes thousands of new start business owners make is forming their business structure improperly, particularly when they’ve not consulted a professional in this area. How you establish your business will determine how you do taxes and filings and when you must file them. The four main types of business structures are sole proprietorship, also known as individual entrepreneurship and enterprise run by one person. Mostly, people perceive the business owner and the business itself as one entity.

In a partnership, business partners, at least two, agree to cooperate to advance their mutual interests. The partners are often expected to share most of the expenses as they’re also likely to have an equal share in the profits or whatever share that has been determined at the point of their written agreements. A limited liability (LLC) is a business structure, whereas the owners are not personally liable for the company’s debts or liabilities.

A corporation is a type of business that declares the company as a separate, legal entity, commonly guided by a group of officers called the board of directors. For many companies with expectations of growing large and which may have slightly higher potential liabilities, this form may be the most advantageous way to go. The two types of corporations are an S and C corporation. Each structure has different tax, income, and liability implications for business owners and their companies. So, it is essential to get sound advice on the right one to choose from the start. Nothing But Numb3rs is pleased to help you choose the right fit for you and your needs.