Hi everyone! I’ve just filed my first LLC & am planning to open a vintage boutique in my city- I’m completely new to owning a legitimate business of my own. I thought this would be a great question to ask as I know I’ll be making many mistakes in my first year of business.
Please feel free to comment your favorite mistake!
I’m speaking as a newbie slightly ahead of you.
You should be able to fund your overhead WITHOUT business coming in. Makes you less dependent on crappy customers and reinvest all profit into the business.
Your CPA must be willing to explain what they are doing. Most CPA’s will just take your paperwork and spit you back a number. No joke I hired a “good CPA”, he was impatient as hell despite me paying by the hour. I left him for the retired banker/accredited agent at H&R Block and he sat and explained EVERYTHING for significantly cheaper. We just got lucky that we knew his history. Also, he got us $1000 more off our tax bill. A good tax guy is an asset!
I’m in my second year. The least profitable customers are a fuckin headache it’s so true!!! Taking on clients out of desperation is bad for your mental health. Raise your prices to be out of their reach.
I need better marketing and social media. Everyone knows Starbucks coffee is terrible but they are profitable due to marketing.
Oh hell!!! I meant to say this. In TX there’s this thing called a franchise tax. It really applies to those bringing in big money, like in the millions BUT you still have to submit that paperwork and filing fee every year. If you don’t, the state can dissolve your LLC. I let that get past me because hell I’m just starting and I’m not aware. Well it got past me and I got the warning letter. I was able to fix it but it was a wake up call. Some of the documentation is just a way to squeeze a few admin fees out of small businesses.
Make sure you don’t have any of those obscure filing requirements out there in your state. That can really mess things up for you!
Everything you said was good except reinvest profit back. No way. That’s yours. Take it and do something else. Your business should be growing on its own merit.
Well if you reinvest profit, your business is growing on its own merit. There are tax advantages to reinvesting profit in your business. You reinvest by getting parts, new equipment, and that dinner where you entertained a client, that’s business expenses. I personally want to leave the LEAST amount of money on the table to be taxed. They get enough from my regular 9-5. When you take money out of your business, that’s taxable income.
Thank you, this is a great response tbh. I’m definitely hiring someone with experience for tax season! And yes the friends and family situation I totally get.
Tax season is at least 4 times a year. Some companies its monthly. If you only see your cpa once a year you get surprises that you don’t like.
Set aside more than you think you need for taxes (I set aside sales tax plus 20% of every deposit) what ever is leftover at the end of the year and filed and accepted I take 1/2 of what’s left over into profits and leave 1/2 for next year.
Seriously read profit first and implement it immediately it will for the best business habits and give you the answers you need to succeed
Currently reading Profit First. I see the benefits–haven’t put it to work yet. What is your best take away from the book?