Five steps to starting a business off right

So, you have a great idea for a product, solution, or service, and you’re thinking about starting your own business. Starting a business can be a daunting task, but with careful planning, a strong worth ethic, and the right guidance, it is possible to turn your dream into a reality. At MATAX, we, too, were once in your position, and we know how it’s easy to feel lost while you’re in the early stages of getting things started. That’s why our team created this list of five steps to starting a business off right.

Step 1: Make it Legal

Before you can open your doors to the public, there are a few steps you need to take to make sure your business is legal. For this part, we highly recommend consulting with a lawyer. The first step is to choose the right business structure. Will you operate as a sole proprietor, partnership, limited liability company, or corporation? Each type of business has its own benefits and drawbacks, so it's important to choose the one that makes the most sense for your specific situation. 

Once you've selected a business structure, you'll need to obtain the appropriate licenses and permits from your state and local government. These requirements vary depending on the type of business you're operating, so be sure to do your research before moving forward. Finally, you'll need to register your business with the IRS.

Step 2: Keep the Money Separate 

Once the business entity is established, you can then open business bank accounts and obtain business credit and debit cards. Using separate financial accounts for your business helps to keep personal and business expenses separate, making it easier to track business expenses and deductions come tax time. Additionally, being diligent about using only business cards for business expenses helps to build business credit, which can be beneficial down the road. By taking these steps, you can help to set your new business up for success.

Step 3: Find an Experienced Bookkeeper or Accountant

Hire someone to organize, record, manage and report your finances.  If you are just starting out, they can help you structure your accounting system and teach you the basics of income and expense tracking. A CPA is essential come tax time.  One that works in tandem with your bookkeeper/accountant will make your life easier and facilitate success through organization, managing cash flow, and goal setting. The search for an accountant should be one of a personality fit. You should feel comfortable talking about all aspects of your business and never feel intimidated.  Your accountant is there to help drive you toward success. 

A great accountant can also help find the right banker when you need a loan, line of credit, and competitive merchant service rates.

Step 4: Download Accounting Software

Starting a business is a big undertaking, and there are many steps that need to be taken in order to get the business off the ground. One of the most important steps is to choose the right accounting software. There are many different accounting software programs available on the market, and it can be difficult to know which one is best for your business. 

However, if you are looking for an accounting software program that is scalable and customizable, then Xero is the best option. With automatic bank feeds, Xero is able to provide real-time information, so you can be sure that your books are always up-to-date. In addition, the cloud-based SaaS platform means that you can access your account from anywhere, at any time. So, if you are starting a new business, be sure to ask your accountant about Xero

Step 5: Establish Regular Communication

There are a lot of steps to starting a business, and it can be helpful to have a team of professionals in your corner. Connecting with your team regularly is a key part of successful business ownership. Each of your advisors should know this is a requirement going into the relationship.

 Make sure to introduce your team to each other - your lawyer, bookkeeper/accountant, and CPA. The people you're entrusting to help you reach your business goals should be comfortable working together. Having everyone work together collaboratively will make your business stronger as a whole. By following these steps, you're setting yourself up for success from the very beginning.

Need help with your business accounting needs? The experts at MATAX are here to help your business succeed. Contact us here to learn how we can help you start and grow your business.