Business Strategies

Running a small business raises a steady stream of practical questions. Here are answers to some of the ones we hear most often from owners.

Which business structure should I choose?

The common options are a sole proprietorship, partnership, limited liability company (LLC), S corporation and C corporation. The right choice depends on liability protection, how you want profits taxed, whether you will have co-owners or outside investors, and how much administrative work you can handle. Many small owners start with a sole proprietorship or single-member LLC and revisit the decision as profits grow. Our business formation team can walk through the trade-offs with you.

Do I need a separate bank account for the business?

Yes. Mixing personal and business spending makes your books harder to keep, makes tax preparation more expensive, and can weaken the liability protection of an LLC or corporation. A dedicated checking account, and ideally a dedicated credit card, keeps everything clean.

What taxes will my business owe?

It depends on your structure and what you do. Most owners deal with federal and Georgia income tax, self-employment tax if they are sole proprietors or partners, and possibly sales tax and payroll taxes if they have employees. Many owners must also make quarterly estimated payments rather than waiting until the end of the year.

When should I hire an employee instead of using a contractor?

The answer turns on the degree of control you have over how, when and where the work is done, not on what you call the person. Misclassifying a worker can lead to back taxes and penalties. If you are unsure, ask us before you decide. IRS guidance on worker classification is available at irs.gov.

How much of my income should I set aside for taxes?

There is no single percentage that fits everyone. A practical approach is to move a portion of every payment you receive into a separate savings account, then adjust the amount after a projection of your year-end liability. We can help you build that projection.

What records do I need to keep?

Keep sales records, bank and card statements, receipts for expenses, payroll records, and copies of filed returns. Good bookkeeping through the year is far cheaper than reconstructing it later. See our bookkeeping services if you would rather hand that off.

Do I need a business plan?

Not legally, but a written plan forces you to test your assumptions about pricing, costs and cash needs, and lenders and investors will usually ask for one. Our business plan assistance can help.

Have a question that is not covered here? Contact our office and we will be glad to talk it through.