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The first thing a start-up business owner should do is develop a strategic business plan. That plan acts as a blueprint for your business and provides financial backers, whether family members, banks, or private investors, with key information as to what your business is going to do and how it is going to operate.

The new business owner needs to determine what type of legal entity the business is going to be. The form of organization chosen will determine whether the business owner will be personally responsible for its debts and obligations. Corporations, Limited Liability Companies, and Limited Liability Partnerships all protect owners from obligations they have not personally guaranteed. The form of entity will also determine how earnings will be taxed. C Corporations are taxed first at the entity level, and its owners are taxed again on any dividends that are distributed. Income from S Corporations, Limited Liability Companies, and Limited Liability Partnerships are not subject to corporate income tax, and are generally taxed to their owners, much the same as with partnerships.

Few businesses start successfully and thrive without adequate capitalization. Capitalization includes both debt and equity. Equity is raised by sale of the business ownership interest (share of stock with a corporation). This portion of the company's capital does not requirement repayment. Most business failures result from inadequate capital. Business owners need to make sure that they have established some banking and/or financial relationships from the very beginning. This holds true whether the owner is going to borrow from the bank or not.

Finally, tax issues permeate every aspect of your business. There are income, employment, and often sales tax issues that need to be considered. In most states, business owners and those in control of finances of the business are personally liable for all unpaid taxes, whether income, sales, or employment. Proper tax planning on a regular basis is necessary in order to assure proper deposits from employment and income taxes at both the federal and state levels.

If you would like more information about starting or operating your new business or any other subjects, please contact us through our e-mail or by calling (612) 339-4295.