Checklist for Starting a Business
In the 25 years between 1985 and 2010 small business grew from less than 5 million employers to 6 million employers. Small businesses, which were non-employers, grew from 14,000,000 to almost 23,000,000. On average, 40,000 new businesses per year, so clearly there is a need for a Checklist for Starting a Business.
In comparison there were 28,000,000 small businesses in 2010 compared with only 18,500 companies with ≥500 employees. Consequently 99.7% of US employer-firms were small businesses. Over that same period they provided 64% of the net new private sector jobs, 98% of export companies, 33% of the total export value and 43% of both public sector payroll and high-tech employment in this nation.
Leading the Recovery
Since the 2008-2014 recession ended, small business has led the recovery in terms of jobs, providing 67% of the total. Of these new businesses 25% are still in existence after 15 years, and 50% make it as far as six years. Bear in mind is that people under age 25 only created 2% of the new businesses, whereas more than 23% were created by those 65+. Youth-created jobs are for the long-haul; retirees utilize a Checklist for Starting a Business to help keep them busy for another half-decade to build up their nest-egg, before permanently retiring.
Checklist for Starting a Business
The prospects have certainly improved since the latest recession ended. If you’re not intimidated here’s a Checklist for Starting a Business that identifies the Federal requirements.
- Obtain your Employer Identification Number (EIN/Federal Tax Identification Number), since it is very rare to not require one (check the above link to see if you’re an exception);
- Use the Checklist for Starting a Business to decide on your business structure because this will have very important legal & tax implications. Knowing the difference between an “S” and “C” corporation could decide if you have to pay any corporate taxes.
- Select your tax year. When starting a business, most companies prefer the calendar year, from January 1 to December 31. For some specific reasons it might be necessary to use a fiscal year, which is any 12 month stretch which terminates on the last day of any month. You could even go more fine-grained than that by using a year that runs 52 weeks beginning at any time during the year.
- If you will have people working for you, each one will need to fill out a form Form I-9 and a Form W-4.
- Pay your business taxes is an important addition for your Checklist for Starting a Business! Varieties of taxes include Income, Employment, Self-Employment, Excise, plus a little beauty called Estimated Taxes where you must “guesstimate” how much money you will earn, and submit taxes as they’re earned. If you don’t, you can be assessed a penalty even if you are getting a refund.
State of Chaos
Of course your Checklist for Starting a Business will change for each state. You must manage your state and/or municipal taxes. Here in New Jersey the rules would be different than those of Pennsylvania or New Mexico.
Starting a business here is easier than some states. New Jersey provides the Business Portal which answers most of the important questions for getting organized when creating your Checklist for Starting a Business.
There you can acquire any of the required licenses and permits, pick up valuable information on Financing and Incentives, get a selection of tips on how to grow your business, or most importantly, talk to our tax consultants and make sure you’re doing everything correctly, including registration as S or C corporations, LLCs, or even a personal/nonprofit business.
An important part of your Checklist for Starting a Business is having access to the letter of the tax law. Connect with the state Department of the Treasury for precise information. Other assorted information, such as the Green Building Standards or the Bond Financing Programs, is available on the site of the New Jersey Economic Development Authority.
This Checklist for Starting a Business is a good start for the Federal information but, if you’re not in New Jersey, your state information might be significantly different. This is particularly true in terms of tax strategies, state-sponsored incentive programs, license and permit requirements, etc.
If you’re currently creating your Checklist for Starting a Business in New Jersey, and need serviced office space, please feel free to contact us at 973-575-6080 or stop by either of our New Jersey locations at:
330 Changebridge Road in Montville, or
181 New Road in Parsippany