Starting your own business can be very exciting, bringing you both joy and financial gain. However, it’s not for everyone. A lot of people try to turn a passion of theirs into a business without really understanding what starting a business takes, and what monetizing their passion will do to their lives. (North Richland Hills CPA: What To Know Before You Start a Business)
WHAT TO KNOW BEFORE YOU START A BUSINESS
Below are three questions to ask yourself before starting a business, so you can make sure this is something you really want to do.
WHAT DOES MY STATE REQUIRE OF A SMALL BUSINESS?
So many people see starting a business as a labor of love, and not a legal contract. When you start a business of any type, the government gets involved. You may have to register with your state, start paying local or state sales taxes, and you may have to get specific licenses or permits.
Do your research before you open up shop, so that you are sure to set your business up correctly and legally.
WHAT IS MY 1 YEAR SALES PLAN?
Businesses that don’t sell are just expensive hobbies. So how exactly do you plan to make money? As the first year of your business progresses, do you have plan to roll out new products or to increase your price points as your audience grows?
Take the time to write out as comprehensive a business plan, and feel free to dream big. Things might not go exactly as you plan for them to, because entrepreneurship is a wild ride! Still, having the plan gives you a direction to go as well as a sense of what needs to be done to get there.
Take the time to crunch your numbers as well. With your sales plan and products, can you cover all your living expenses or will you need to draw from savings? Where will the money to cover start up expenses come from? Answering these questions BEFORE you’re in the thick of business will make everything more manageable.
WHY SHOULD THIS BE A BUSINESS?
Why do you want to turn your passion or hobby into a business? Not enough people stop to ask themselves this, and it’s a big help to answer it.
Consider things like: could this just be a side hustle? Is this better off as a passion project? What will this mean for my hobbies if I turn it into a business?
Just because you love something doesn’t mean you need to run a business off of it. While it’s tempting to get into the entrepreneur pool and splash around, really consider if that’s what’s best for you and your lifestyle.
Call Scott A. Kunkel, CPA PC today in North Richland Hills at 817-498-1040 to have a chat about ways to save money on your taxes.
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Source: Small Biz Trends