I have learned a lot from the people I’ve taught my QuickBooks and Business Financial Basics classes for small business owners and bookkeepers.   Fortunately I’ve also come across people who actually chose to take these types of classes before starting their own business, and I admire them for taking the initiative.

I provide this information because I have been there, done that.   With the way the economy has been going, many people feel that the best way of staying employed is by employing yourself.   Unfortunately not everyone understands the amount of work that often comes with it, even for people who have been researching this for quite some time.

Paperwork
Can you keep up the amount of paperwork you have to file?   These are the basics, although there are numerous others.   The local/state forms I refer to are for my home State of Texas.

Local ‘“ property tax reports are filed one time per year

State ‘“ unemployment reports are filed four times per year
State ‘“ sales tax reports are filed either one time, four times, or twelve times per year
State ‘“ franchise reports are filed one time per year

Federal ‘“ 941 payroll tax deposit reports are filed four times per year.
Federal ‘“ 940 federal unemployment reports are filed one time per year
Federal ‘“ W-2 forms are filed one time per year (employee compensation)
Federal ‘“ W-3 forms are filed one time per year (total amount of employee compensation)
Federal ‘“ 1099 forms are filed one time per year (independent contractors)
Federal ‘“ 1096 forms are filed one time per year (total amount of independent contractors)
Federal ‘“ 8027 forms are filed one time per year (annual tip report)

Employment Taxes and Insurance
Social Security Taxes ‘“ 6.2% match by the company for what you pay your employee
Medicare Taxes ‘“ 1.45% match by the company for what you pay your employee
State Unemployment Taxes ‘“ varies from state to state, Texas is .26% to 6.10%
Federal Unemployment Taxes ‘“ .8%
Workers Compensation ‘“ required by every state except Texas

Start-Up Costs

  • advertisement
  • office equipment
  • dba certificate
  • incorporation
  • business licenses and permits
  • insurance
  • office supplies
  • attorney / accountant fees

If a person is able to make it through all of this information, willing to work nights, weekends, holidays, and practically marry their business, then you have a shot at it.   Yes, the amount of businesses which fail within the first 3 years is 95% on the latest statistics.   Remember most importantly that you are the person responsible, and no one is going to care about your business more than you are.

——
Dwayne J. Briscoe, Owner
Bookkeeping-Results, LLC
Dwayne@bookkeeping-results.com

Photo credit: stock.xchng.