How to stay in business and out of prison

If you are in the process of starting a new business on-line or off-line, there are many things to discuss and consider early in the process. Every state is different where its rules and legal requirements about conducting business are concerned so get some expert guidance before diving in. I find it interesting that every now and then I meet someone starting a business who feels they can go it all on their own. They jump in with very little time spent learning the legal ins and outs of business and I have actually seen people sign contracts without the advice of a good lawyer. That just makes me shiver to think about it. I live by a few simple rules, one of which goes something like this: If a lawyer wrote it and it concerns me, then my lawyer has to read, and translate it, to me. Consider the advice of the following sections.

Get Your Self a Good Accountant

Consulting a good accountant is a must, even if your business is just starting up. An accountant can save you time and money and can keep you from getting into trouble with the Internal Revenue Service. For instance, estimated federal and state taxes should be paid quarterly. Your accountant can help you determine how much to set aside ahead of time for each payment. The government does not have a sense of humor nor is it merciful when it comes to matters of taxation. Also, the laws of taxation change yearly and it is very unlikely that you will be able to keep up with all of these changes.

Your accountant will also help you to properly structure your business financially. He will be able to advise you on the financial advantages and disadvantages of running a sole proprietorship as opposed to a corporation. As a small business owner you may be eligible to take special deductions like self-employment tax, long-term care insurance, or health insurance.

Get Yourself a Good Lawyer

You need a good lawyer, leave all doubt behind. Your lawyer will help you set up your business and see to it that all necessary forms are filed and that no law is accidentally broken. When I started my first business I was amazed at how many things my lawyer took care of that I never realized were required. He keeps me from unknowingly breaking the law through my own lack of knowledge and therefore keeps me out of legal trouble.

Currently I have 2 lawyers for my businesses and one very good accountant. They have been instrumental in helping me to make good, sound business choices while attending to the legal details and keeping me in good standing with the IRS. Their advice and their services do cost money but I consider the peace of mind they give me well worth the cost.

A Few More Thoughts

Consider learning a good accounting software package to help you keep track of all business finances. While a good accountant is a must you are still responsible for keeping in touch with all of the financial data your business generates. Two things to keep in mind: No one will invest as much of themselves in your business as you do. It is your business and you must be the one to monitor its progress. Secondly, no one is perfect and it is always possible for your accountant to make an error. By keeping your own books you will always have your finger on the "pulse" of your business and you will develop a sense for your cash flow.

I currently use Quickbooks accounting software and it works well for me but there are other packages available. Find one you can be comfortable with and use it. There are some wonderful books out there to help you learn how to use virtually any software package. I actually took an online course through a community college in my area to learn Quickbooks and I found it invaluable. For me, having an instructor to ask questions of really made the software much easier to learn.

Finally, make sure you keep good records of all your income and expenses and save all of your receipts. If you are ever audited you will need good, well organized records. Your accountant will get you organized and stand by you through the process to make certain that all the i's are dotted and all the t's are crossed.