Virtuoso Team Consulting, Inc.

Taxes are a much maligned responsibility of business owners, primarily because the offices responsible for collecting them do not make the process at all user friendly. While no one wants to pay taxes, they do want the services rendered from their collection. Another issue that I believe should get a small mention is, contrary to popular belief, tax collection is legal and there are plenty of people who have been incarcerated who will attest to this. Whether you agree or disagree with the premise, taxes are what you have to pay when you make money, personally or as a corporation. The important thing to remember is that you only have to pay what you owe, and there are many things you can do to reduce your taxable income. As I have stated before, I am neither an accountant nor a tax lawyer, nor will I pretend to be. What I am is a business advisor, and if your earnings allow it, finding a good accountant is an excellent investment. They will frequently save you more than they charge you, yielding a net positive for your business.

In my opinion, the best way to find a reliable accountant or bookkeeper is through word of mouth. Talk to other business owners, see who they use and then meet or interview those people they recommend. Pretend this person is going to be your doctor; you need to feel comfortable with them. They will be vital in keeping your business healthy. Trust your gut, if someone makes claims that you find questionable or they simply give you an unsafe feeling, keep looking.

Why should I pay my hard earned money to an accountant when I can do my own taxes?

Simply put, the fees you pay to an accountant or tax preparer are tax deductible, and they are better qualified to find deductions you do not even know about. Going back to the idea that you have only two things to invest, time and money, while they are working for you, you can be working on making more money or spending time with family and friends. I cannot stress it enough, whenever able and prudent, it is wiser to let a professional handle some of your business workings so you can manage the part that makes you money.

Another avenue for information is the tax collection agencies. They frequently offer classes or lectures that explain how to figure taxes owed, payment methodology, and answer questions regarding situations specific to your company. Typically these services are free, and are designed to help you fulfill your obligation correctly and with as little error as possible.

Remember, these payments support all kinds of services from the police officers and fire-fighters who protect yourself and property to SBA programs that help small businesses with loans, putting money into the economy. It is the cost associated with being able to follow your dreams. Most successful business owners will agree it is a small price to pay.

©2008-2009 Virtuoso Team Consulting, Inc.   All Rights Reserved.

They say the only two certainties in life are “death and taxes”. Each of these can, and will, have their own blog post, but I we shall start with Death. While this is a terribly morbid subject, I assure you it is something every business owner should take into consideration for a multitude of reasons. Business entities, continuation planning, and insurance are just a few issues that should be contemplated.

There are a number of different types of business entities, each with their own strengths and weaknesses, and I do not presume to know which entity best suits the reader. That is a subject best left to an accountant, tax advisor, or lawyer, and I am none of these. Having said that, one of my preferred entities is a subchapter S Corporation, primarily because it exists outside of the individuals who run it. It has its own name, tax identification number and legal liabilities. Most importantly, if anything happens to one of the principals, the corporation continues in perpetuity. This is in stark contrast to sole-proprietorships and partnerships which dissolve upon the death or incapacitation of a principal.

In the event a sole proprietorship or partnership has been chosen, a thoroughly detailed, legal document should be in place to dictate what happens in the event of someone’s death. The goal should be to keep “business as usual” for the remaining principals, not to mention addressing the rights and responsibilities of the survivors of the deceased. If the decedent is the business, as in the case of a lawyer, physician, or CPA et al, then what plan is in place to service their clients? Can these assets (client lists) continue to be served or sold to another individual or business?

Insurance is a tricky subject that I am licensed to talk about, but will only speak of in generalities for this blog. Insurance, in its simplest terms, is an investment you hope to never have to collect, but is of the utmost importance if it is ever needed. In particular, there are insurance policies to help offset the expenses of keeping the business running, searching for principal or executive replacements, and buying back stock from the decedent’s estate.

These situations should ideally be addressed before starting a company, but if that is not possible, they should be addressed immediately! Do not wait for this or that to happen before you plan for these eventualities or you may lose your ability to do anything about it at all.

©2008-2009 Virtuoso Team Consulting, Inc.   All Rights Reserved.

The sheer volume of things that must be done to legally start a corporation in the state of Florida is astounding:

1.Register with the Department of State of Florida, Division of Corporations

2.If necessary, make sure you have an occupational license

3.Get an EIN (Employer Identification Number) from the IRS

4.Elect and file the paperwork to be a subchapter S corporation from the IRS

5.Pay to be licensed with the county and city, as required.

6.Don’t forget your license to collect sales tax, or pay unemployment tax

7.How about a worker’s compensation waiver?

That is just the legal and tax stuff someone has to go through, let’s not forget about actual business planning, for example:

1.Writing a business plan

2.Creating a marketing plan

3.Registering your domain name (in case you should want to have a web presence, which is highly recommended in this day and age)

4.Establishing your budget, pricing, cost structures and profitability

…to name but a few.

There are also miscellaneous things like bookkeeping software, hiring employees, and exit strategies that should be established.

It really makes me wonder why anyone would want to start their own business, but then I remember what one of my clients at the bank said to me, “Jer, if you do what you love, you’ll never work a day in your life.”

©2008-2009 Virtuoso Team Consulting, Inc.   All Rights Reserved.