Quick Checklist For Your New Business
1. Setup Your Business Structure - minimum to start DBA
DBA stands for Doing Business As, what it means is that you will be able to open a bank account in the name of your business. A good idea if you need to get paid. Many times this is the minimum needed to open a bank account. I suggest everyone get a DBA if not an LLC to operate their company. Each situtation is different, so make sure you ask a professional before making the decision!
2. Get Business Licenses
Business Licensing is set by each state and profession, make sure you know the details before you start your business!
Some might require a business license others may only require a sales and use tax license.
The laws for sale tax vary by state, but make sure you understand the laws of the state where you are doing business! There are several considerations, first is penalties! It is better in most cases to have a sales tax license and not need it than to need it and not have it. As an example, in Texas, If you do not have a sales tax license and you should have had one, then the fine is $500 per day that you should have had it. So for one 30 day month, the fine would be $15,000! Better to have it, and do a little bit of admin work once a quarter, than to not have it!
3. Bookkeeping/Accounting Software
Get Bookkeeping software and make sure you know the difference between an invoicing program (Freshbooks) and accounting software (Quickbooks Online).
If you don’t want to learn about bookkeeping, GREAT, then hire someone to help you! Bookkeeping and accounting software provides valuable resources to make decisions and help you run your business. Not only at tax time but throughout the year! You and everyone around you (cough, cough, the IRS) should know you are running a business. So put in the effort or the money in to make sure it looks like you are taking your business seriously.
4. Know your numbers!
Know your sales numbers, your marketing numbers, your CAC (customer acquisition cost), etc. You need to know them to run your business well! They will help you make good decisions about your business, and because of the work you put in, you will take personal ownership of the business.
5. Documentation (bookkeeping will fulfill a number of the needs below)
Make sure that you are keeping good records! (See checklist item #3) When you need to find something, or research a question for a customer, documentation can keep that customer loyal. If you are saying “well it looks like I deposited that amount a couple of months ago…..” They are not going to want to do business with you.
Dont keep paper unless you just want to, scan everything you can!
Make sure to do the following:
Match payments to invoices (know check numbers and dates)
Know the deposit and payment amounts (if you allow for multiple payments of invoices)
Keep copies of bills
Match your payment to the bills (know check numbers and dates)
Reconcile your bank account
Keep copies of receipts (digital copies are acceptable), if it is a business expense you should have a receipt!
Track your business mileage (See blog post)
Documentation is critical to a successful business.
If you don’t document well, it will cause you problems with your customers, vendors and at tax time!
Lastly, make sure that you are spending your time well! Be focused and intentional about where you are spending your time. Time is the only resource we have being spent, even when we do nothing with it!