Small Business Beginner Basics
It can seem baffling when you’ve decided to start your own digital marketing agency. At first you may have no idea what steps you need to take, and you can feel very overwhelmed, very quickly. We’ve compiled a list of the basics, to get you started and moving in the right direction.
- You need to open a bank account for the business. If you intend to stick it out as a sole proprietor you don’t legally need a separate bank account but it is recommended. In the United States LLCs, partnerships and corporations are required to have separate bank accounts.
- Play hard to get! Don’t just go down to your local bank and open an account though. Look around at many different banks and see what benefits a business account, at that location offers up.
- You’ll also need to be aware that in order to open a business bank account you’ll need to have your business registered with the state (unless you are doing business as yourself). Head over to the Small Business Association to see the steps you need to take.
- Tracking your expenses is a cumbersome but critical step in recording keeping for the small business. You should lead right off the bat with putting together a process for keeping track. This can be digital or manual (place receipts in a folder and pull them out to track at the end of each month) but there are a few types of receipts to pay close attention to:
- Entertainment/Meals: If you conduct a meeting and eat out at the same time this is something you can claim! Be sure to keep the receipt and note what the meeting was and who attended.
- Vehicle related (if applicable): This requires you to track where you where, when you were there, and why you used the vehicle for business.
- Gifts: If you purchase a gift for a client you can also claim it as a business expense but you have to be careful. A great example is if you purchase tickets to a broadway show, if you attend as well this is no longer a gift expense, but instead and entertainment expenses.
- Home Office: Having your office at home can really cut down on your initial expenses. You will need to keep track of usage of the business side of things however.
You can deduct your internet, business phone, and more when you work remotely. If you share something so the use is half business, half personal you’ll just need to keep track of that as well.
- Keeping the books in order! This is a system you need to also put in place from day one. You’ll need to decide if you’ll use a third party software (there are many), or if you’ll use a local bookkeeper. The decision is up to you, it’s just a decision you’ll need to make.
- Sales Tax is something you pay everytime you go to the store on certain items. You’ll need to look into your state and see if you’ll need to charge and collect sales tax. You can learn more at the SBA regarding sales tax.
- Taxes! Depending on how you structured your business, depends on how you’ll pay your taxes. If you chose to structure as an LLC., partnership or sole proprietor you’ll be considered self employed and you’ll pay the business taxes on your personal claim. If you structured as a corporation you’ll need to do a separate filing.
- Revaluate and Reinvest. Starting out it’s totally ok to use a spreadsheet to track your expenses, but as time goes on and the business grows you may need to change up your methods. Don’t be afraid to realize you need to change your methods or get outside help. Your business will be stronger because of it.
Starting any new business can be hard, but following the basics laid out here will help you to build a strong foundation for your business. DMTG is always here to lend a hand as well. What do you wish you had known as a new business? Drop us a comment with your tips!