Starting a small business

I’m curious if anyone here has experience launching a sole proprietorship—specifically, what kind of startup capital are we talking about, and how long does the paperwork actually take?

Also, if I have a product ready to go, is a formal business structure a requirement to get it into the market, or can I handle the billing, invoicing, and federal taxes just as an individual?🤷

Thanks, everyone.

So, I’m wondering if it’s actually feasible to set up a sole proprietorship where I don't hire anyone—basically just acting as my own boss—and then essentially opt out of paying myself a formal salary until things get more stable? I suppose I'd also want to know if there's a way to decline participating in Social Security contributions or health insurance coverage, since I really have no interest or need for those right now.

I stumbled upon this in another comment thread:

Quincy:

That’s precisely why I’m asking. I laid out my specific factors—the low invoice volume, the overhead, the seemingly light workload—so I could get a sense of whether the pricing is actually fair. It isn't my intention to haggle with an accountant, which is why I decided to seek some clarity here on the forum. If there’s a way to secure the exact same service $167 for less, that matters quite a bit to me. Given that on those ten or so annual invoices, I'm already paying $1000 for Social Security and Medicare, plus $333 Chamber of Commerce fees, along with $333 for the accountant itself, I suppose I'm just looking for areas where I can trim the fat.

In what manner does this individual pay their $1000 annual Social Security and Medicare taxes
?
If it is:
Quincy:

For individuals operating as sole proprietors, the base used to calculate Social Security contributions (per the regulations regarding insurance bases for calculating and paying Social Security benefits) is a multiple of the average wage and a coefficient of 0.65, which comes out to $1208. Applying the 19.5% rate to this base results in a contribution amount of $236.

$236*12=8479.32

Quincy:

The bases used to calculate and pay Medicare premiums for specific insured individuals are determined by the Social Security Administration Board based on provisions from Article 51 of the Health Insurance Act, via the Decision on Bases, Calculation Methods, and Payment of Funds for Basic Health Insurance. The rate used to calculate these contributions is 16%. For workers with a high school diploma, the contribution is $173, for those with an Associate's degree $198, for Bachelor's $229, for Master's $259, for Doctoral degrees $272, and so on.

$198*12=$2372

Totaling $5198

What exactly is the Chamber of Commerce, and why would anyone be paying them $333 annually?

Or $333 why pay accountants at all when you could probably just handle the bookkeeping yourself!

Just to throw another layer onto this, let's say I’m already working somewhere else where my employer covers my health insurance and social security contributions, but I also run my own small business on the side. In that scenario, would I really be expected to pay into those same systems twice? I guess it seems like a bit much, maybe.

Justin Walker24 said:So, I’m thinking about finally biting the bullet and starting my own small business, and honestly, my head is kind of spinning with all the moving parts! Does anyone know what the actual deal is with getting a loan—like, am I even eligible, what kind of interest rates are we looking at, and how much of a headache is the whole application process? Also, does anyone have a ballpark figure on what it actually costs just to get the company registered? And oh! Is there still money on the table for hiring employees through those government subsidies, or has that dried up? (Seriously, if there's anything else I should be worrying about right now, please, please let me know!)

Since I’m based out of Indianapolis, is there any way I can qualify for those special economic development zones or rural revitalization programs, and if so, what kind of perks am I looking at?

Thanks a million in advance!

😍😂😂 You’ve got me laughing my head off here. You'd probably be out there demanding "rights" to a loan from big Austrian or French investment banks. You'd probably expect zero interest and a ten-year grace period, too.😂

Just a bit of satire to lighten the mood. Mystic, let's be real: you don't have an inherent "right" to a loan when you're just starting out with zero collateral. Honestly, someone working a minimum-wage government job is more likely to get approved than a brand-new entrepreneur—unless, of course, you happen to be a high-ranking member of the Republican Party and snag a grant from a local postal bank.
After you've been running things successfully for maybe three or four years, you might finally qualify for credit based on your revenue (though don't hold your breath), adjusted upward by about 30%.

Hey everyone...
I'm looking for some info but I'm hitting a wall here...

I want to start my own small business and open a cafe...
My question is: can I register the business under my own name?
I finished a three-year culinary program...
Do I actually need prior work experience in the field? I know how to run this thing, which is why I want to do it myself...
I have a basic idea about the paperwork for starting a sole proprietorship, but this part is confusing:
Business Types:
1. General Service Business: No specific certification or trade exam required to operate.

2. Licensed Trade: Requires a professional certification...
or a master's license.
3. Privileged Business: Can only be operated if you hold a special permit...
issued by the relevant government agency, depending on the industry.

Which category do I fall into, what can I actually open, and can I go with the first option?

What are the total costs for all the filings and paperwork?

Can I use a rented space inside an apartment as my business headquarters if it isn’t actually where I live?
I caught somewhere that a small business owner's headquarters has to be their primary residence. Is that actually true? Also, is it okay if my business is registered in one state, but I personally live in another?
Thanks in advance for the help!

So, I’ve decided to take the plunge and launch my own small business, and I find myself facing several questions. I appreciate everyone’s willingness to help me out in advance, but before I dive into the specifics, let me lay out the situation: I am essentially going to act as the sole representative for an Italian firm operating within the US market. They aren't interested in establishing a domestic corporation or hiring a full staff just yet because they want to test the waters first. Consequently, I will be the only person on the payroll. This leaves me with a few dilemmas that I need to resolve:
1) Is it legally viable for a sole proprietorship to function as a commercial agency? Specifically, I am looking into sales representation. We would, of course, have a formal representation agreement in place to ensure everything is legally airtight.
2) There is the issue of transportation. Until I can secure a company vehicle, I plan on using my family car, which is currently registered in my mother's name. What is the standard procedure for this, what are the typical mileage reimbursement rates, and how does the IRS view these expenses from a tax perspective?
3) Regarding office space: I intend to use a portion of my family apartment—which is under my father's name—as my workspace until I can lease a dedicated commercial unit. What is the proper protocol here, how is this handled for tax purposes, and is it even possible to sign a lease agreement if the property is part of a multi-family residential building that isn't zoned for separate commercial units?

Hello, everyone.
I was wondering what kind of Boeing requirements apply to this line of work if one is handling smaller physical items.
I understand that business operations can be conducted out of a residential space, but I am somewhat unclear on the specific standards for a "convenient storage area."

Austin Williams20 said:Just to throw another layer onto this, let's say I’m already working somewhere else where my employer covers my health insurance and social security contributions, but I also run my own small business on the side. In that scenario, would I really be expected to pay into those same systems twice? I guess it seems like a bit much, maybe.

If you're already employed elsewhere, you only pay payroll taxes on your earnings—specifically income tax, I believe—at a set rate. I think it might be around 15.3% for FICA, but I suppose I could be wrong.

Rebecca Ortiz4 said:Hey everyone...
I'm looking for some info but I'm hitting a wall here...

I want to start my own small business and open a cafe...
My question is: can I register the business under my own name?
I finished a three-year culinary program...
Do I actually need prior work experience in the field? I know how to run this thing, which is why I want to do it myself...
I have a basic idea about the paperwork for starting a sole proprietorship, but this part is confusing:
Business Types:
1. General Service Business: No specific certification or trade exam required to operate.

2. Licensed Trade: Requires a professional certification...
or a master's license.
3. Privileged Business: Can only be operated if you hold a special permit...
issued by the relevant government agency, depending on the industry.

Which category do I fall into, what can I actually open, and can I go with the first option?

What are the total costs for all the filings and paperwork?

Alright, look. You can run a cafe as either a sole proprietorship or an LLC. Going the sole proprietor route is usually a bit cheaper, and you’ll take your paperwork down to the local Small Business Administration office where the cafe will be located. If you go the sole proprietor route, one requirement is that you—or someone you hire—must have the proper food service certifications. If you aren't certified, you can hire someone who is, provided they're working full-time, and you’ll report that to the Social Security Administration once the business is live. One big tip: before you sign any lease, ask the landlord for the building's permits (ideally a Certificate of Occupancy—it doesn't have to be specifically for your unit, but it needs to cover the building if you're in a mixed-use space) and check if they have the necessary inspections for utilities like electricity, water, HVAC, and gas. This matters because every new food service establishment has to pass inspections to meet minimum safety standards based on its type. Basically, if you want to open a cafe, you've got three main stages:
1. File the application to register your business
2. Submit the request for health and safety compliance checks
3. Submit the final application to officially open for business

Gerald Taylor7 said:Can I use a rented space inside an apartment as my business headquarters if it isn’t actually where I live?
I caught somewhere that a small business owner's headquarters has to be their primary residence. Is that actually true? Also, is it okay if my business is registered in one state, but I personally live in another?
Thanks in advance for the help!

It really all comes down to what kind of business you're running. Generally speaking, there's no rule saying you can't have your business headquarters in Washington, D.C., while you personally live in San Francisco.

So, I’ve decided to take the plunge and start my own small business, and I find myself facing a few hurdles. I appreciate any insight or guidance you all can offer before I dive in. To give you some context: I am planning to act as the sole representative for an Italian firm operating within the West Coast region. They aren't interested in establishing a formal US entity or hiring a full staff until they see how the market responds, which means, for the time being, I will be the only person on the payroll. This leaves me with several pressing dilemmas:
1) Is it legally viable for a sole proprietorship to function as a commercial agency? Specifically, I am looking into sales representation. If we draft a formal representation agreement to ensure everything is legally sound, would that suffice?
2) There is the issue of transportation. Until I can secure a company vehicle, I intend to use my mother’s car. What is the standard procedure for this, what are the typical mileage reimbursement rates, and how does the IRS view these deductions?
3) Regarding office space: I plan to use a portion of my family’s apartment—which is under my father's name—as my workspace until I can lease a proper commercial unit. What is the protocol here, how is the tax implication handled, and am I even permitted to sign a lease agreement if the property is part of a multi-family residential building that isn't zoned for separate commercial units?

Eric Bennett4 said:So, I’ve decided to take the plunge and start my own small business, and I find myself facing a few hurdles. I appreciate any insight or guidance you all can offer before I dive in. To give you some context: I am planning to act as the sole representative for an Italian firm operating within the West Coast region. They aren't interested in establishing a formal US entity or hiring a full staff until they see how the market responds, which means, for the time being, I will be the only person on the payroll. This leaves me with several pressing dilemmas:
1) Is it legally viable for a sole proprietorship to function as a commercial agency? Specifically, I am looking into sales representation. If we draft a formal representation agreement to ensure everything is legally sound, would that suffice?
2) There is the issue of transportation. Until I can secure a company vehicle, I intend to use my mother’s car. What is the standard procedure for this, what are the typical mileage reimbursement rates, and how does the IRS view these deductions?
3) Regarding office space: I plan to use a portion of my family’s apartment—which is under my father's name—as my workspace until I can lease a proper commercial unit. What is the protocol here, how is the tax implication handled, and am I even permitted to sign a lease agreement if the property is part of a multi-family residential building that isn't zoned for separate commercial units?

Bill Gates, for these specific tax questions, your best bet is to hit up the local IRS office or just grab a quick word with a CPA if you know one. As for the representation side of things, you could probably run that through a general trade brokerage setup, or maybe register as a marketing or market research agency, depending on exactly how much legwork you'll be doing.

Eric Bennett4 said:So, I’ve decided to take the plunge and start my own small business, and I find myself facing a few hurdles. I appreciate any insight or guidance you all can offer before I dive in. To give you some context: I am planning to act as the sole representative for an Italian firm operating within the West Coast region. They aren't interested in establishing a formal US entity or hiring a full staff until they see how the market responds, which means, for the time being, I will be the only person on the payroll. This leaves me with several pressing dilemmas:
1) Is it legally viable for a sole proprietorship to function as a commercial agency? Specifically, I am looking into sales representation. If we draft a formal representation agreement to ensure everything is legally sound, would that suffice?
2) There is the issue of transportation. Until I can secure a company vehicle, I intend to use my mother’s car. What is the standard procedure for this, what are the typical mileage reimbursement rates, and how does the IRS view these deductions?
3) Regarding office space: I plan to use a portion of my family’s apartment—which is under my father's name—as my workspace until I can lease a proper commercial unit. What is the protocol here, how is the tax implication handled, and am I even permitted to sign a lease agreement if the property is part of a multi-family residential building that isn't zoned for separate commercial units?

1) Honestly, I haven't a clue—but it probably works.

2) You can use a personal vehicle for business purposes and claim deductions$0.67 based strictly on mileage, and THAT'S IT.

- Or, you could rent the car from your mother, pay her a monthly lease fee, and then deduct gas, maintenance, and all those related costs at a 70/30 ratio... though keep in mind, your mother would have to report that rental income on her taxes.

3) You could rent a portion of your dad's place at a set rate. He’d have to pay income tax on it, but in exchange, you'd be able to write off the rent as a business expense.

I registered my LLC, but I haven't officially started operations yet. I was hoping to lease some servers, transfer my cell phone bill over to the business, and maybe claim a few other items as startup expenses. Is it actually possible to do this before I set an official start date for the business? I called a woman at the IRS, and her answer was pretty vague, though it sounded more like a "no" than a "yes." If there is a way to make this work, how would one even go about it?

Jason Castillo52 said:I registered my LLC, but I haven't officially started operations yet. I was hoping to lease some servers, transfer my cell phone bill over to the business, and maybe claim a few other items as startup expenses. Is it actually possible to do this before I set an official start date for the business? I called a woman at the IRS, and her answer was pretty vague, though it sounded more like a "no" than a "yes." If there is a way to make this work, how would one even go about it?

If you don't have an official start date on file, I don't think that's going to fly according to the rules.

Yes, I suppose I feel the same way. It seems likely they require a specific date for the documentation.

I have a few questions. I am planning to launch an event planning agency specializing in weddings and other celebrations—essentially coordinating with catering companies, invitation designers, venues, and all the necessary vendors. With that in mind:

1. I’ve done some initial research and heard this could be run as a sole proprietorship. I am wondering if this qualifies as a general independent contractor setup, or if there are specific licensing requirements. If it is regulated, what kind of professional credentials would I or my employees need to hold?

2. Beyond the standard $167 fees, what are the actual startup costs? Specifically, what else do I need to pay for before I can officially open for business? I’ve heard mentions of things like filing fees, official seals, and various administrative costs. Does anyone have a rough estimate of what that looks like?

3. Regarding ongoing expenses, which costs are expected during the first year, and which ones will continue indefinitely?

Carol Perez4 said:I have a few questions. I am planning to launch an event planning agency specializing in weddings and other celebrations—essentially coordinating with catering companies, invitation designers, venues, and all the necessary vendors. With that in mind:

1. I’ve done some initial research and heard this could be run as a sole proprietorship. I am wondering if this qualifies as a general independent contractor setup, or if there are specific licensing requirements. If it is regulated, what kind of professional credentials would I or my employees need to hold?

2. Beyond the standard $167 fees, what are the actual startup costs? Specifically, what else do I need to pay for before I can officially open for business? I’ve heard mentions of things like filing fees, official seals, and various administrative costs. Does anyone have a rough estimate of what that looks like?

3. Regarding ongoing expenses, which costs are expected during the first year, and which ones will continue indefinitely?

My advice? If you’re serious about starting this, just head down to a local branch of the Department of Commerce or check their online portal via Google. You can get all the answers there without running around aimlessly, and they can tell you exactly which type of business structure fits best. In my opinion, a standard sole proprietorship should do the trick.

2. Total setup costs will run you about $333
. 3. Ongoing costs include owner contributions, chamber of commerce dues, plus whatever operational overhead you decide on—like payroll if you hire staff, rent for an office, etc., depending on your setup. Most of these are recurring, and the actual amount will depend entirely on your revenue, turnover, and overall volume.