There are many steps when starting your business, and they can be confusing and overwhelming. This page covers the main steps to consider. Even if you have been in business a while, going through this list can help if you missed a step at the beginning. 

Simple Profit provides the education you need, when you need it, for free or at a very low cost. Get answers your questions gives you the tools to help make business decisions.

1. Start-up costs

This video explains what start up costs are (minute 0:35), how to choose your start date (minute 1:50), tracking and paying from personal (minute 3:40), when to deduct and limitations (minute 5:05).

Link: Start-up cost free spreadsheet
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2. Choose form of business

There are many options for your business entity. The right option is the one that is best for you, the business owner. It is important to get legal and tax advice, but first know the options, how they work and that will help you determine what questions to ask. 

Read this blog post to understand the options >>>

Note: Some states, counties, cities, towns require a business license, but many do not. The requirements can vary based on the type of industry and form of business. If you are unsure, search online "business license" and separately search your state, county, city or town names. You can call your local business or zoning office to inquire as well. Home offices may need a permit or permission. 

3. Get an EIN

An Employer Identification Number (EIN) is a type of Taxpayer Identification Number (TIN). A social security number is another type of TIN.

Business owners get an EIN to avoid using the owners social security number, and it is usually required by the IRS or banks. A sole proprietor or individual EIN is linked to the owner themselves. An LLC, S-Corp or C-Corp EIN is tied to the business itself, not the owner. 

Official IRS.gov EIN online application (free)

Don't get scammed

Scam sites have "IRS" or "IRS.gov" in the web address and they will charge a fee for applying for the EIN for you. However, the EIN on the IRS site is free and easy to get. You will spend as much time filling out the form on a scam site as you would getting the EIN itself. Ensure you get a free EIN directly from the official IRS site.

4. Open a business bank account

It's expected to keep business transactions separate from personal transactions. This is critical to having good books and records for your business. Click the picture to read the blog.

Watch the business banking video

5. Business Deductions

It can be challenging to know what expenses can count as business deductions. See the resources below.

Read more about deductions
Download Free Tax Checklist
Deduction blog
Deduction video
Year-end spending video

6. Choose an accounting method

There are three methods of accounting: accrual, cash and modified/other. Most small businesses use cash method accounting. Cash method is the simplest, and ensures you won't pay tax until you have actually collected the revenue.

If you are unsure which to choose, it is likely best to choose the cash method because it is the easiest to understand. 

7. Choose an accounting system

An accounting system tracks and categorizes financial transactions. Even if you use an EHR, EMR or separate client management system, you still need an accounting system. Click the picture to read the blog

For help with bookkeeping, consider joining the Simple Profit membership!

8. Determine owner pay

How you pay yourself as a business owner depends on your form of business. Watch the videos below to understand your options. Owners Pay video is a general overview, and Owner Payroll is about establishing a reasonable salary for an S-Corp or C-Corp owner. 

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9. Pay estimated taxes

The IRS and states with income tax expect self-employed individuals to pay estimated tax during the year, even if the first year in business. 

Click to learn more - estimated taxes

10. Explore Simple Profit resources!

Simple Profit has tons of resources to help the small business owner! Watch the first video to learn all about Simple Profit's free content. The second video is a preview in to the low cost membership!

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