You may be an attorney or other professional with the ambition to open your own practice. You may be an entrepreneur with the vision to lead your own company. You may have worked for someone for years and developed the know-how to run a better operation.
Owning a business is part of the American Dream. It demonstrates an entrepreneurial spirit, a willingness to take risks with the desire to reap the rewards.
Make sure you are prepared from the start. You are an expert in your field – but you’ve never started and ran a business before. Planning is essential. It involves making key financial decisions and taking legal steps. Gary Kaplan has the experience to guide and help you select the best choices to create a strong business organization.
These are some things to consider before you “open for business”.
Have a Business Plan
Business plans serve many purposes. Lenders and investors often require a written plan to consider funding. It will help a start-up company predict whether a business idea will be profitable. It can help you identify potential problems as well as opportunities.
Compare the tax aspects of various business entities.
The basic choices are Sole Proprietor, Partnership, C Corporation, S Corporation and Limited Liability Companies (LLCs). Each type has its advantages depending on your situation, and will have significant impact on your liability and income taxation.
Execute the correct agreements and federal and state filings.
File incorporation, LLC or partnership documents with your state. Apply for a federal employer identification number (FEIN); this is like a Social Security number for your business entity. For corporations wanting “S Corp” tax treatment, file an election request with the IRS. Get state identification numbers. Obtain required city/county business licenses and permits.
Set up accounting records for the new entity.
Your company will record financial transactions as they occur in the business, for example: start-up funding from shareholders/partners/lenders; purchases and payments; sales and receipts. These transactions will be entered into “accounts”, such as Cash, Sales, Payroll Expenses and Accounts Payable.
These financial records will provide 2 key financial statements you will use to make business decisions:
The Balance Sheet – A snapshot at any period of time of your assets, liabilities and equity in the business.
The Income Statement – A report of results over a period of time of your sales, expenses and profit.
Law Office Management Class Taught by Professor Steven J. Dell, Esq.