Business Startup Question

When you decided to start up your business, did you get a business license first? Did you create an LLC or anything similiar for Tax write-off purposes?

Just curious....... Thanks in advance.

Woten

Sole proprietorship.

In some cities, they are very strict about businesses having a business license. Where I live, the license fee is small. However, it is necessary to have your business address inspected for fire safety in advance, and that inspection fee runs the expense up.

---Bob Gross---

Also Sole proprietorship here. Pretty simple thing to do. Be prepared for cold sales calls when you startup.

Ok here is what I did. I am sure there are a million methods but this is my route.

• Opened a mail box at a local copy center. If you do not open a box at a Post Office branch it is not a P.O. Box, it is a PMB (Personal Mailbox). But there is an advantage, PMB normally have street addresses and unit numbers. That takes away the stigma of the PO Box address. You have to have an address to get a DBA, but you could use your home address. But there could be zoning issues with that.
  
• Went to my county clerk's office (look it up on the internet b/c most large counties have several branches) and filed for a DBA (Doing Business As). That is a legal announcement of your intent to conduct business under a name other than your legal name. You have to have a DBA to open a business checking account.
  
• I opened a free business checking account with the bank I already have a personal account with (Washington Mutual). You have to have a business checking account to be able to cash checks made out to your business name. Also you might find that some vendors will not accept personal checks.

Thanks for all the great advice. I appreciate it!!

One more comment on the set up:

If you set up as a sole proprietorship, you can only lose money on the books for 4 consecutive years before the gov't deems it as a "hobby" and won't allow you to write stuff off anymore. If you take the time to set up as an LLC, s-corp, etc. you can lose money for as long as you want on the books.

I mention this mainly because there are a lot things that you can write off when you own your own business. As a photographer, you can write off vacations as long as you burn through some "film" on the trip, you can write off a big chunk of your vehicle expenses, etc.

But the best advice that I can give is to talk to an accountant about your company. The amount of money that they can save you should more than offset the fees. I'm kind of fortunate in that my accountant is my father-in-law, and pro bono, but I know he's saved me thousands over the past years in legitimate tax deductions that I would have otherwise missed....

Thanks,
Nathan

Checking with an attorney specializing in small businesses would also help. I did this when setting up my consulting business. He asked me various questions about what I did to make money (i.e., the nature of my business) and what sort of expenses I would have. After about 20 minutes, he said I should be an S-Corp, and explained how that would benefit me versus other options.

What is a personal business property tax report, and how would your competition have any knowledge of your status?

I'm not trying to probe your status, but I'm just curious, since I have never heard of such a report.

---Bob Gross---

Interesting. Thanks. I'm glad some states are different from your experience.

You'll have to ready up some pranks for your competitors.

---Bob Gross---

I just checked, and my state does not have such a requirement. Whew!

---Bob Gross---