Importance of Getting the Right Business License and Permits

Applying for licenses and permits for your business.

When you are staring your own business you should not forget to explore and investigate the requirement for various licenses and permits.

It is better to take care of these things before you start your business rather than later.

Not taking care of these things right from the beginning is a common mistake that many entrepreneurs make. It is a mistake that you might have to pay for later. It is easy to get embroiled in other things that you have to do when starting a business and forget about this small bureaucratic point. The fact is that in order to operate certain businesses, you probably need a permit and license from your county or state. In fact some licenses and permits can be costly and hard to get.

You need to adjust the cost for getting a license for your business in your startup budget as well.

It is important to find out in the beginning what kind of license or permit you require to start a business. Otherwise your business could suffer and even stop to function right in the middle of its inception and growing stage.

You do not want your business to become a success only to get shut down by the county when you discover that you don’t have the proper license or permit.

Not having the proper license can also lead to heavy fines and restrictions on a business. It can result in lawsuits from suppliers or employees and even problems with the internal revenue service. In this section we will discuss the most common kinds of licenses and permits that a business owner may need and where you can go for further information.

Why You Should Hire An Account for Your Business

What are the benefit of hiring an accountant when you start a business and how he/she can help you tremendously not only in the startup but also in future business growth.

Many small business startups think that only bigger businesses need the services of an accountant. This could not be further away from the truth. If you are a small business start up, it could be true that you need less services from an accountant but nevertheless, because you are likely to be starting with a limited budget when you start a small business, an accountant can be of interest was able help in keeping an eye on the cost of the startup and controlling your finances.

If you are starting a business for the 1st time, an accountant can help you understand the various costs as well as help you get an estimate before you begin. This helps you in getting the required funds and capital ready beforehand rather than finding yourself short of the required amount of money at a crucial business juncture.

Even after the business has started up, this time is likely to be a very busy time for you. Many business owners do not have an accurate idea of how much money they are actually making. It is extremely important to know how your product is doing and how much money your business this making in terms of profit to know whether you have got certain things like such as the amount of cash flow, funding, capital investment and the pricing of your product as well as the profit margin. An accountant can help you clearly see this picture.

Another point to consider is that people starting off with a small business think that they can do the accounting job themselves using the accounting software. There are several excellent accounting software available in the market which are easy to use. However, one must understand that an accounting software only does what you tell it to do. An accounting software cannot be a replacement for the expertise and knowledge of a good accountant.

The services of an accountant go beyond just crunching numbers. Most of the accountants today, specially those working for business startups work in the capacity of financial advisory as well. The accountant has an intimate knowledge of how profit and loss, costings and business financing work. If you involve an accountant in your business right from the beginning, he will understand your financial goals better and have a know-how of helping you move onto the next step. An accountant can not only help you manage your business goals but also keep in mind your personal financial agenda as well.

It would be wrong to think of an accountant for business as mainly someone who prepares your tax return.

Accountants have a wide knowledge of finance and are an invaluable asset to the business. These are some of the areas of expertise in which an accountant can help your business.

  • Business advisory services.
  • Accounting and record keeping.
  • Tax advice.
  • Auditing.

If the accountant is closely involved with the business these areas of functioning overlap with each other. For example when the accountant is preparing your profit and loss statement, he can also advise you on increasing or decreasing a profit margin and taking a better control of your overhead costs. He can pinpoint certain costs that are inflating the cost of running a business and hence reducing your profit margin. When filing your tax returns he can also make suggestions regarding investments and business realities to reduce your year-end tax liability.

Five Services That An Accountant Can Provide For Your Business

These are the 5 common functions that an accountant can perform for a business.

An accountant is not someone who only prepares the tax returns for your business. Neither is he someone who only does that count and record keeping. In fact, an accountant is a person who has extensive financial knowledge. If he is someone who has experience with doing accounting for businesses, then he can give me some valuable insights and guidance regarding all matters pertaining to finance about your business. While he may not be the person to recommend design and the relevant enhancements in your product, he could be the person who tells you how to cut down your overhead costs and manage your year-end tax liability. A business accountant is also the person who gives you a clear picture of how much money the business is making. When clever accounting, you will be able to see exactly what the profit-making areas of your business and which are costing more than necessary.

These are five common functions that an accountant performs for business.

Business Advisory Services

An accountant is someone who has extensive knowledge of finance matters. If he has been involved in your business right from the beginning, he will also be knowledgeable about your business environment, your business lands as well as a personal financial status. Accountants can offer advice on everything from insurance to business expansion. They can help you acquire extra assets, tell you when the time is right to expand business, invest or to make changes in certain costs and expenditure of the business to enhance your profit-making. An accountant can give you advice on which areas of your business is profit-making and where unnecessary expense is going. An accountant and a good accounting system is required to get a clear picture of how much money you are making and how the expenditure and cost of running the business is being managed.

Accounting and Record Keeping

Accounting and record keeping is one of the most basic functions that an accountant performs. However, many small business owners prefer to keep their own books and records instead of having an accountant do it. The reason for this is easy to understand. A person is responsible for the accuracy of their financial records and is held accountable for them when examined by the lenders or the Internal Revenue Service. Therefore it makes more sense for the business owner to maintain them and keep them accurate. However, the great utility of the accountant is in setting up of the effective accounting system which allows the business owner to easily maintain his financial books and records. An effective accounting system will allow the business owner to evaluate the profitability of the business at any given point of time. He will be able to track expenses and see which areas allow him to cut down costs and increases profitability. The business owner can control the cost of this product and profit margin as well as keep things within a business budget using the accounting system set up by his business account. The business owner will be able to keep track of the sales and expenses and take advantage of any seasonal trends that happened to show up in the accounting statement. Accurate and effective maintenance of financial books: business also results in a greater ease when it comes to filing tax returns.

Tax Advice

Apart from all the other functions that an accountant serves, tax planning and compliance with all the taxation rules and regulations is an important part. A business should always be in compliance with the federal, state and county laws of taxation. Planning for tax liability also determines the kind of legal business structure that you create.

Auditing

Almost all businesses required auditing by the third-party accountant in order to file tax returns. Most of the lending institutions and banks require the proper auditing of the business before they can approve the business was alone. Auditing of business includes preparing financial statements as well as an assurance by the content or third-party that the companies financial information is accurate.

Financial planning

Many accountants are moving into this area for businesses as well as it is the most natural extension of their financial knowledge and expertise. An accountant can help you finance your business, plan for future expenditure, requirement of future financial capital input, cost of growth, cost of hiring employees, controlling overhead costs etc. when an accountant is involved with the business right from the inception, he is in a great position to be intimate with the working of the business as well as the long-term goals. This puts them in a great position to be of incredible advisory assistance when it comes to making any decision that involve money and finance.

How To Make the Most Of Your Business Accountant

Maintaining a healthy business relationship with your business accountant and utilizing his/her expertise to the full.

In order to make the best use of your business accountant you should keep good and healthy business relationship with him. Creating and developing healthy business relationship with your business accountant starts with the engagement letter. This letter should contain the understanding you have about the services that he has to perform for you and your business. It should accurately list your expectations from his job as an accountant and even a financial advisor if he is going to be serving in that capacity. Making all this clear in the engagement letter makes sure that there are no misunderstandings in the future and both you and your business accountant understand the limitations and scope of the agreement.

Secondly, do your best to make your accountant’s job easy and effective. Organize your business’s finances such as receipts, check payment records, deposit slips, bills and expense records so that you can give him a coherent account when it is time to prepare the finical statements. Many small businesses keep a close watch over the transactions on a weekly and monthly basis during the startup phase to ensure that things are not going wrong. Get your accountant involved in this right from the beginning.

Meet with your account once a month to go over the financial statements and discuss any confusion that you might have. Such a meeting will also help you understand where and how your money is being spent. It also gives you an opportunity to discuss financial matter to see how things can be better managed.

Getting a good accountant and then using him/her successfully for your business is one of best steps that you can take for the long term success of your business. So work on building the right time right from the beginning.

How to Choose an Accountant for Your Business

How to find a good accountant or CPA for your business.

One of the best ways to find a good accountant is to get the referrals from somebody you trust or somebody with a good professional know-how of running a business such as your attorney, your banker or a business colleague.

You can also refer to the Society of Certified Public Accountants in your state.

When choosing an accounting for your business, do not underestimate the qualification of a fully qualified CPA, which stands for certified public accountant. All certified public accountants have to go through a rigorous today nationally standardized test which ensures that they have some level of knowledge and expertise in the related field of accounting. Most of the CPAs are also required to have a college degree or its equivalent and many states also require post graduate internship work. While accountants usually work for larger businesses and companies, CPAs handle accounting work for small and big businesses.

Hiring a fully qualified CPA ensures that your accountant has at least some level of knowledge and expertise as well as experience when it comes to answering accounting jobs for the business.

Finding a good accountant can take some time and work. Shortlisting your potential accountants on the basis of their qualification is a good way to narrow down your list and ensure that you find success faster. After you have shortlisted a few accountants you will need to interview them.

However, before you start your search for certified public accountant or a business, you should prepare your own criteria. You should fully understand what your business needs are and how much of the work needs to be done by the accountant. You should have the duties you are going to set for your business account and very clear in your mind. This will help you in shortlisting the list of accountants as well as interviewing them when you pass them pertinent questions as to how qualified and willing they are to serve your business needs.

Accounting services by an accountant can be divided into 3 broad categories which are recording transactions, assembling the transactions and generating returns and financial statements. It is usually the last part of generating returns and financial statements that is the most difficult and requires the highest level of expertise. Ideally, you should choose an accountant who has some level of experience in handling business accounts. Generating income and financial statements for a business is very different from that of doing it for people for personal tax returns. Make sure that the accountant you choose is well versed with this aspect. It is a good idea to see if the accountant does this kind of work for other business clients. If he does, you can get a better idea of the reputation of the accountant and even ask referral from some of his existing clients.

When choosing an accountant for your business you need to look at three aspects, which are Services, Fee and Personality. All 3 of these are important to develop a long term relationship.

Services

As already mentioned before you can choose an accountant for a business, you need to prepare your own business requirement. You should know beforehand what services you will need an accountant to perform. Based on this criteria you should interview the accountant and see if he can handle the jobs that you intend him to do. On the most basic level accountant will be able to offer you tax and auditing services but we also developed a bookkeeping and finance management system which will enable you to track the financial performance of your business? What about estate planning? Other services that you may consider and need your CPA to perform include preparing, auditing, reviewing and compiling financial statements, managing investments and representing you before tax authorities. If you are dealing with a small accounting from, it is a possibility that they may not be able to offer you a huge myriad of services . However, it is equally possible that they may have tieups with another firm who can do so. When looking at the services that an accounting firm has to offer, you should also consider the fact whether they already have experience in your particular field. If they already render those kind of services to other clients it means that they are already familiar with your business requirement and will not waste time in getting up to speed and delivering results. Being familiar and having experience in your business will also mean that the accountant can give you more reliable and up-to-date advice.

Fees

You should definitely inquire about the free and charges of your accountant up front. Different accountants charge at different rates which can very from $75-$300 per hour. This can seem like a big overhead expense. But accounting and bookkeeping is something that is very essential for a business. Determining the legal structure and the tax liabilities as well as accurate calculation of taxation is also extremely important. Which is why it makes extremely good sense to discuss the kind of fee structure that you accountable with. Most of the accountants and even accounting firms might be comfortable working on a monthly retainer as well. The cost of an accountant is not the only parameter on the basis of which you should decide. For example, a more experienced accountant may charge a higher fee but also do you work in a faster and more competent manner. A less experienced accountant may charge less but at the end of the day she’s going to take longer to finish the job, not only do you end up spending the same amount of money but inexperience may also lead to poorer results. A good accountant should be able to give you references and allow you to call or ask a few of his clients as to his services, P and availability.

Personality

You should realize that an accountant is one of the pivotal professionals who you are going to use for the success of your business. As your business grows, your dependents and need for a good accountant will grow as well. It is a good idea to develop a long-term relationship with an accountant. For this reason it is important to be able to find a good accountant right at the beginning of the business so that he can guide you and help you right from the beginning. Having an accountant involved with the business right from the start up stage will make him intimately familiar with lots of things such as your future financial goals, your personal financial situation and allow him to deal with all issues keeping the several business aspects of mine. If you are approaching an accounting from and meeting with someone make sure that you are meeting the person who will be handling the accounting job. Many large accounting firms handle sales and new businesses through their main partners but then pass on the actual account to other people.

You should also discuss how they the accountant will deal with any plans that you intend on incorporating in your business such as changing the business model in the future or having to deal with tax issues if they arise. Listen to the response and see if that is the approach you are comfortable with.

Having an accountant who differs in a post to your natural instinct for doing business is not always a bad thing. For example if you are overly conservative amah having an accountant who exposes you to aggressive side of doing business is not bad. Likewise, if you are aggressive, having an accountant who is conservative in his approach and safeguards your financial interests at all times.

Questions to Ask When Interviewing an Accountant For Your Business

These are some of the questions that you should ask a potential accountant when you are considering hiring him for your business.

  1. Are you a CPA? Do not assume every account this.
  2. Are you licensed to practice in the state?
  3. When and where did you receive a license to practice?
  4. Where did you go to school and what degrees did you earn?
  5. Who are some of your clients? See if you can call some of them and get a reference.
  6. What is your area of specialization?
  7. How big or small are your clients and what size were there when you started working with them?
  8. How accessible are you? Will the accountant be available only on certain days and during certain business hours or will he cater to your business whenever you need.
  9. What professional organization does the accountant belong to?
  10. How active are you in those groups?
  11. What are your fees and charges? Ask to see some current invoices.

Getting the Maximum Advantage Out of Your Business Lawyer

How to make the most of having a business lawyer and get the maximum benefit out of the relationship.

Once you have successfully established a relationship with a lawyer, you need to make sure that you are using him to full utility and to the best interest of your business. You must keep channels of competition open at all times. When you find out lawyer who can help you or your business, understands your business needs and does a good job in keeping the legal problems in check, you have found a valuable asset for your business. It is up to you to use this asset whenever required and to take out its full potential.

It is advised that you should meet with your lawyers regularly. Even once a month. While this may seem counterproductive to keeping the legal costs low, you would be surprised how it enables you to reduce your day-to-day consultation with your attorney thus bringing down the costs and more importantly helps you nip certain legal problems in the bud before they have a chance to escalate into something more complicated.

It is a good idea to arrange annual meetings with your attorney to discuss the past years progressed and plan goals for the coming year.

Keeping in touch with your lawyer and business attorney will also help you estimate how good a job he is doing. Usually the quickest measure of your attorneys competency is to realize how many legal difficulties you’re still facing.

Lawyers are not only supposed to solve problems but they should also fend them off in advance by bringing up solutions to potential legal issues and problems that the business can face in the future. This is somewhere where the experience of a lawyer can come in handy.

Even if the lawyer is not very experienced, a competent professional always does extensive research or refers to someone who can help in a situation that he is not well versed with. That said, when you hire a lawyer for your business, he should be somebody who is well aware of and has a good knowledge of business laws and legal structure of small businesses. A good lawyer is a competent professional who returns phone calls, meets deadlines and follows through on promises.

Make sure that your attorney is helping you meet your business goals, control legal ramifications, does not burden you with undue legal costs and is a support system for your business.

Using Prepaid Legal Services For Your Small Business

Using a Prepaid Legal Service can cut down the cost of getting legal guidance and help for a small business tremendously.

Something that has caught on in popularity in the recent times is prepaid legal services. Prepaid legal services help a business combat the rising legal costs and helps the business get certain basic and preliminary legal service from a reputed and respected source without having to pay the earth for it.

Prepaid legal services are not limited to providing basic legal support but also extend 2 extensive legal guidance and solutions. Prepaid legal services are about charging a fixed monthly fee and offering a package of services such as say Unlimited phone consultation, review of 5 contracts per month, up to 10 get collection letters per month and discount on other legal services.

A prepaid legal service can cost as little as $15 a month to $200 or more.

It has been established by a few experts that many and in fact most of the legal problems faced by small businesses can be resolved with a single telephone call. This is where a prepaid legal service comes in handy as it allows phone consultation with a respected law firm which otherwise might have been out of the businesses budget.

The way a prepaid legal service works is that they usually have a contract with one law firm in each state to handle routine matters. In this way the prepaid legal service is one of the law firm’s biggest clients. When you call up the law firm as a subscriber to the prepaid legal service you get a better reception and more attention than you otherwise could have hoped for when speaking directly with the law firm itself. This is an obvious advantage of dealing with the prepaid legal service. Not only are you better received and given more attention but you also get to consult with the specialists at considerably reduced rates.

Here are some of the points to keep in mind when considering using a prepaid legal service for your business.

What kind of package are being offered? Since prepaid legal services charge a fixed monthly amount and deliver a packet Stevie, make sure that the package includes the kind of services that you require for your business.: Since the service in the package may be limited, ask about the charges for others extended services as well.

Would you prefer to build a relationship with one lawyer and attorney who understands your business goals and future growth prospects and is available for consultation on a more one-to-one basis as opposed to having to talk to a different lawyer every time you call.

Consider the quality of work that you might receive from a prepaid legal service. You should try and get a reference from other entrepreneurs who have used so services and maybe even get a recommendation. Asked how the company would handle a conflict of interest in case you have a dispute against the business who also uses the same prepaid legal from.

For more information, contact the American Prepaid Legal Services InstituteAt 321 N Clark St., Chicago, IL 60610 or visit their website at www.APLSI.org.

How To Cut Down the Expense Of Your Business Lawyer

Tips for cutting down costs of a business lawyer.

Many entrepreneurs get daunted by hiring a lawyer for the business wing to the cost that it signifies. Hiring a lawyer conjures up images of skyrocketing legal bills. However, there are various ways on you can keep control over the Expense that you undertake by hiring legal advice and guidance for business.

Learn more about how lawyers charge and how you can use the various systems to keep the building cost of your business lawyer low.

Hourly or per diem rate. Most lawyers charge by the hour. If traveling is involved they may charge extra.

Charging by a flat fee. Some attorneys and lawyers can also suggest a flat charge for certain routine matters such as reviewing contracts and processing loan documentation.

Monthly retainer. One of the options that you can use is to pay a fixed monthly fee to the lawyer if you anticipate a lot of routine questions and legal advice.

Contingency fee. Many lawyers often work on a contingency basis which means that for lawsuits and complex legal matters they receive a percentage of the proceeds if they happen to succeed in the legal proceedings., And contingency fee ranges between 25% to 40%. In case they fail to get and deliver the outcomes you require, they received only the expenses.

Value billing. Some lawyers and law firms bill at a higher rate on business matters if they can obtain a favorable result such as associating a contract that saves the client thousands of dollars. You should typically try and avoid this method which is also known as partial contingency.

If you think any one method will work better for you than the other, you can try and negotiate with the attorney. The attorney may be also willing to offer flexible arrangement to meet your particular business needs.

When you hire a lawyer to draw up an agreement known as an engagement letter detailing the business and billing method find out if more than one lawyer works on your file make sure that you specify the rate for each attorney separately so that you are not charged a higher fee meant for one of the primary lawyers in a from when your work is being done by the associate who charges less.

This agreement should also specify what out of the pocket expenses you are expected to reimburse. Some will seek reimbursement for means, secretarial overtime, postage, photocopies which many people consider to be part of business expense. You should agree to reimburse only the reasonable and necessary out of pocket expenses. If you find unexpected charges and expenses on your bill, you should ask your lawyer for authorization.

Get an estimate beforehand.

You can also ask a lawyer to give you an estimate of how each legal process or procedure is going to cost in advance. This will give you an idea about the kind of legal costs that you are facing in the future. Some lawyers will also guarantee you a cap in writing. This will be the maximum cost of a particular service. This can help you budget and give you a more accurate idea of how much you can expect to incur increased legal costs allowing you to budget for it more accurately.

What increment does the lawyer used to calculate the fee. A lawyer can keep his track of time in increments of as less as 5 min. or as long as half an hour. The shorter the increment the more you are likely to save over quick phone calls and short advices. Using larger time increment could result in you getting built $50 for a five-minute phone call.

Request a monthly itemized bill. Many lawyers wait for the build to get reasonably large before the Senate across to the customer. This can result in you getting unmanageably large legal bills suddenly and out of the blue. In order to avoid this ask for a monthly itemized bill from a lawyer. This will also help you monitor the costs and review them for any excessive fee which may be a result of too many people working on your file or the wrong people or even a mistake in the billing.

Prompt payment discount. See if you can negotiate with the lawyer to give you up prompt payment discount. A prompt payment discount can be in the range of 5 to 10% and be extended to you for being a prompt payment customer who pays within 30 days of the invoice date.

Prepare before a meeting or consultation with the business lawyer. When you need to consult your lawyer on some business issue, make sure that you arrange all the necessary documents and know exactly what you want to discuss. You can even fax the necessary documents to the lawyer in advance so that he does not have to waste time reading them during the actual meeting. Being prepared for consultation and meeting with your business lawyer will help you save time and money. Organizing yourself in this manner will also avoid you having to call your attorney many times during a single day. As he you should avoid doing this anyway because it is likely to create problems between you and your business lawyer. No one appreciates too much of their time getting taken for nonessential issues. No one also likes and unorganized and unprofessional approach to dealing with business problems and issues.

Meet with the lawyer regularly. While this may not seem like such a good idea specially if you’re trying to keep the legal costs down, meeting with your lawyer regularly is actually very effective in reducing the phone calls and the number of and you have to refer to your lawyer otherwise. Even a monthly meeting of 5 to 10 min. can help you take care of legal problems before they happen and have had a chance to grow into something more unmanageable.

How to Find the Right Attorney/Lawyer for Your Business

How to find a good business lawyer.

The most common and reliable way to find a good business attorney is perhaps get recommendations from reliable sources. You can ask your business associates, other business owners in the same industry as yours or take advice from your bankers and accountants who are trusted people to give you a recommendation of lawyers suitable for your business. Make sure that you speak to people you trust. When approaching other business owners, make sure that there is no conflict of interest. If you are not comfortable using an attorney used by another business owner, you can always ask that lawyer as to who he might recommend a for some reason you cannot use him.

If you want more sources and more prospects you can contact your local Bar Association. Many of them also have reference services.

The next thing that you need to do is shortlist a list of 5 potential and top candidates. Interview them and tell them that you are interested in building a long-term relationship. Find out which of these attorneys is willing to meet you for an initial meeting without charging you a fee. During the interview figure out which business attorney is ready to meet your business requirement. Not all businesses are created on the same scale nor do they have the same kind of funding available.

The lawyer that you choose should be able to match competence and expertise within the budget that you have for the legal department of your business. Here are some of the questions you should ask the lawyer during the interview and the qualities that you should consider before finalizing.

Experience of the Business Lawyer.

While this is not a hard and fast requirement, you need an attorney who has a good knowledge of the field of business that you’re operating in. This means to say that there might be no point hiding a civil lawyer who does not deal much in issues of a business legalities.

Understanding.

Wake up you should choose a lawyer for your business who has a good understanding of what your business is all about. It only helps to develop a good working relationship if your client understands your business goals and is someone who is a longtime partner in your business’s growth.

Your Business needs and requirements.

You should be very clear with your lawyer about how comfortable he is with serving the various requirements of your business. Is he comfortable with dealing the smaller issues and is he going to be easily available to tackle small problems or is he going to not consider it worth his time. Small businesses often require simple consultation which can be even done over the phone call. Your business law should be willing to give your business to scan of an attention. Also, monthly schedules meeting with a lawyer is a good idea as well as an annual recap of all legal issues and potential growth developments in the future which require a legal overview.

Communication. Communication will be an important point with the lawyer that you choose for your business. If he cannot communicate clearly to you or insists on using legal jargon that you cannot fully comprehend, he might not be the best choice for you. Full and complete communication and time for the business owner is something that business lawyer should always be willing to provide.

Availability. Is the attorney going to be available to you always? Or is he only going to give you time on set dates? Find out how he is going to tackle business issues as they arise and if he is going to be available for urgent business needs.

Fees and Charges. As already mentioned, different businesses may have very different needs as well as budget. Does the fee and charge structure of the attorney suit your expense budget? Many of these things will depend on the size of the business as well as the size and reputation of the lawyer or the law firm that you are hiring.

A business lawyer can charge anywhere from $50 an hour to $500 per lot. Make sure you get the kind of trade that you can afford. Also keep in mind that the lowest fee not indicate the best value of your work since you may either be dealing with an inexperienced lawyer or your work may be handed down to a apprentice or legal aide.

Get a reference.

When you choose a lawyer for your business don’t be afraid to ask for references. Get an idea of what kind of businesses the lawyer has dealt with in the past. If possible get a list of clients or other attorneys that you can contact to discuss your business requirement.