Build Your Business from Scratch. Insurance, Accounting, Taxes & More

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1 Build Your Business from Scratch Insurance, Accounting, Taxes & More

2 There are several reasons to write a business plan (even if you are not seeking funding/investors): Gives you new business ideas as you write. Helps you see how practical your ideas are and how profitable your business may be. Helps others take your business seriously. Directs your analysis of your competitions. Helps you take an in-depth look at your target clients and your market or industry in general. Helps you secure funding from outside sources if you desire investors or loans. Helps you avoid overspending. Top reason to write a business plan: It will help you love & understand your business more! This is especially good for non-business people. Forming a Business Plan pg. 34

3 Please view the list of common business plan sections on page 34 of our book. The most important sections for you as the business owner and operator: Vision and Mission Statements Objectives Keys to Success Company Advantages Products & Services Target Markets Sales Channels Competition Analysis Marketing Plan Start-up Budget Break-even Analysis Recommended Business Plan Sections

4 View page 35 for examples of both Objectives (section 1.3) and Keys to Success (section 1.4), or view some sample business plans on bplans.com for examples. Try to write three goals/keys for each section. In-class Work: Objectives & Keys to Success

5 Read your plan at least once a month to make sure you are on track and to update the plan with any new goals. Use your plan to weigh expansion decisions and operations decisions. Familiarize employees or other key stakeholders with your business and goals by sharing sections of your business plan. Recommended Business Plan Uses

6 For tons of sample plans, fully written out and including charts and graphs: bplans.com For the Small Business Administration s step-by-step business plan guide: sba.gov/business-plan/1 For City of Austin demographics: austintexas.gov/demographics Business Plan Resources pg. 41

7 Employer Identification Number (EIN) For those of you who will hire employees, try to establish business credit, use subcontractors, get a business bank account, and/or apply for sales tax permits, you will likely need a free EIN from the IRS. Please view the URL on page 28 of our book for the web page you need to apply for an EIN, or simply google IRS EIN Application and find the applicable page on the irs.gov website. Don t forget to check Obtain an EIN off of your checklist on page 152 once you ve done so.

8 Small Business Insurance Common types, providers, and uses of small business insurance. Please take note of the types of insurance that may apply to your business. General Liability Insurance Professional Liability Insurance (also called Errors & Omissions Insurance) Product Liability Insurance Property Insurance Workers Compensation Insurance Business Auto Insurance Home-based Business Insurance Business Owners Insurance Health, Life & Disability Insurances Example providers to contact for rates: Progressive Wells Fargo Business Department State Farm Nationwide Hiscox Please view page 28 of our book.

9 Small Business Accounting Review page 44 of our book for the two types of small business accounting available to you. Use pages for information on free and low-cost accounting software. Use page 47 for information on free credit card readers and apps for your smart phone or tablet. Use page 48 for a list of online payment options for those of you who will take credit card payments on your website.

10 Small Business Taxes Charging and Paying the Correct Taxes as a Business and Business Owner Please turn to page 52

11 If your Texas business sells products (or if you sell certain services) to Texas residents, then you should apply for a Sales and Use Tax Permit from The Texas Comptroller: Visit or go to: 1711 San Jacinto Blvd., Suite 180 Austin, Texas Depending on your expected sales volume, the Comptroller will require a tax filing and applicable payment each month, quarter, or year. If you sell services in Texas, read the Comptroller s Taxable Services ( Charging a Sales and Use Tax pg. 52

12 Sole Proprietorship If you operate a sole proprietorship, you will need to file, pay & consider the taxes on page 53. General Partnership If you operate a general partnership, you will need to file, pay & consider the taxes on page 53 for sole proprietorships and the top of page 54 for partnerships. LLC If you operate an LLC by yourself, you will need to file & pay the same applicable taxes as a sole proprietorship. If you operate an LLC as a partnership, you will need to file & pay the same applicable taxes as a General Partnership. Corporations If you operate a C Corp, view the taxes on page 54. If you operate an S Corp, view the bottom of page 54 for applicable tax filings. Paying Corporate and Personal Business Taxes

13 Franchise Tax Any LLC or Corporation operating in Texas has to file or file & pay a Franchise Tax each year on or before May 15. This tax is typically 1% of earnings, and is currently only due if your company makes $1,000,000 or more per year. Excise Tax Certain entities may be required to pay an excise tax, which may include a fuel tax or environmental tax depending on your business. Check the IRS site to see if you ll be required to pay this tax: Tax Estimated Tax View page 55 for information on whether or not you ll be required to file and pay an estimated tax: More Taxes, Yay!