Starting a small business

Hey there,
I’m looking to start a small business, but I feel like I've hit a massive dead end here.😢
I stopped by a local CNN office to get some guidance, but they basically just handed me a flyer listing ten steps I need to take. Apparently, step one is waiting on CNN to provide certain forms and specific data.🙄

Quick question: can I just grab a background check from the local police station, or am I going to have to trek all the way down to the county courthouse?
Also, can I launch a sole proprietorship without having my high school diploma in hand yet? I've only got about a month left of classes, but I really need to get this business off the ground ASAP.
The plan is to rent out toys for kids. From what I've gathered, I don't actually need any special permits or licenses for something like that, right?

restlesstiger47 said:Hey there,
I’m looking to start a small business, but I feel like I've hit a massive dead end here.😢
I stopped by a local CNN office to get some guidance, but they basically just handed me a flyer listing ten steps I need to take. Apparently, step one is waiting on CNN to provide certain forms and specific data.🙄

Quick question: can I just grab a background check from the local police station, or am I going to have to trek all the way down to the county courthouse?
Also, can I launch a sole proprietorship without having my high school diploma in hand yet? I've only got about a month left of classes, but I really need to get this business off the ground ASAP.
The plan is to rent out toys for kids. From what I've gathered, I don't actually need any special permits or licenses for something like that, right?

If you're in New York City, you'll head to the misdemeanor court over on Kennedy Square for that background check. That covers the business and economic district area.

As for the business, if it's a general service setup, you can open it regardless of your schooling or degree.

Renting toys isn't a specialized trade, so I assume no extra permits are needed, but it wouldn't hurt to double-check with the local Chamber of Commerce first.

So I just launched my own little service business about three weeks ago... it's just me, a solo operation. The IRS told me I need to keep a ledger of all my income and expenses. I can handle the bookkeeping myself since I used to manage the books for a local grocery store, but I’m totally lost on how to actually pay myself... what forms do I need to file, and do I have to drop them off at the IRS or Social Security or something?

Hello.
I have been weighing a specific situation regarding the potential opening of a small business venture.

I need to procure services from a certain US company, but they strictly limit their clientele to registered corporations, sole proprietorships, or non-profit organizations; essentially, they won't deal with me as just an individual.

Since my requirement for these services is relatively short-term—perhaps lasting a few months, though the exact duration is uncertain—I am assuming the path of least resistance would be to register as a sole proprietor just to facilitate a contract.

During this brief window of operation, I anticipate generating a maximum of $20,000 to $30,000 $0.00 in revenue. Given that amount, I would remain under the threshold for sales tax registration, though I'll still be on the hook for income tax and other standard obligations, correct?

If I were providing something like IT consulting or marketing services, what percentage of that gross amount would actually remain in my pocket after I account for all the mandatory
taxes and fees?

Furthermore, how difficult is the process of dissolving such a business once the work is done? Is closing shop after only a few months a bureaucratic nightmare?

Thinking about starting my own little IT shop. Mostly coding and computer repair stuff.

Most of it makes sense, except for this:

The work that doesn't require General Motors would be done at home. The catch is the house and everything on the property is in my dad's name. I don't own anything, not even a share of it. Do I actually have to rent space from him? Isn't there some other way? It feels pretty stupid to bother a retiree and drag both of us down to the IRS just to deal with all his tax filings.

Also, the landline and the internet are under his name. Say I don't need the phone, but I can't work without web access. I guess I’d have to get a new number and a new account, but business accounts are basically just more expensive versions of what people already have. Who decides that I *must* use a business account, and why can't I just use the one in my dad's name? Who gets to decide that or force my hand? Does that apply to the electric bill too? Even though I don't have my own connection for that room or anything in my name?

My little setup would basically be competing with my current employer. The company I work for is slowly dying, so I'm trying to get my own thing ready before they fold. Do I need to justify myself to them or ask for permission to start my own business?

And what's the deal with paying mandatory contributions for Social Security and Medicare if I'm working full-time at my current job where they already cover everything for me? Do I still have to pay those $600 or do I just pay the difference between what my employer pays and what my business income requires at the end of the year?

What about the estimated income tax for a new business in its first year? Do I actually pay it or not? How does that math even work? At the end of the year, does the business income just get added to my salary from my job and then calculated... or what? I'm struggling to wrap my head around it since everyone talks about a small business as if it's just an extension of a regular person.

Can you actually get a "pass" on the U.S. Chamber of Commerce dues during the first year if you request it in writing? Is that true?

Got a few more questions, but I wanted to clear these up first. Thanks in advance.

Hi there!
I was wondering if anyone might be willing to lend me a little guidance...
I've been thinking seriously about opening a small children's clothing boutique. I’m trying to figure out if I should just set myself up as a sole proprietorship or if I really need to go through the hassle of incorporating a full company. Since I graduated from a four-year textile design program, I have the technical background, but my knowledge of business structures is, well, pretty much non-existent. I suppose a sole proprietorship would be much more affordable to start, right?
I live in a pretty small town where there isn't much variety at all. For instance, I have a two-year-old son, and whenever I want to find him something nice to wear, there's absolutely nothing available locally. I always have to hunt elsewhere, so I have this feeling that a dedicated kids' shop would actually do quite well here. Plus, I spent some time working in high-end children's boutiques in Washington, D.C., so I definitely have some solid retail experience under my belt.
Right now, I'm unemployed, so I'd be running the whole show myself. Honestly, no matter how hard I look for work around here, it feels almost impossible to find anything. Does anyone have any idea how much startup capital I might need to get something like this off the ground?
Thanks so much in advance!

Can anyone help me out here? Thanks

Matthew Morris28 said:Thinking about starting my own little IT shop. Mostly coding and computer repair stuff.

Most of it makes sense, except for this:

The work that doesn't require General Motors would be done at home. The catch is the house and everything on the property is in my dad's name. I don't own anything, not even a share of it. Do I actually have to rent space from him? Isn't there some other way? It feels pretty stupid to bother a retiree and drag both of us down to the IRS just to deal with all his tax filings.

Also, the landline and the internet are under his name. Say I don't need the phone, but I can't work without web access. I guess I’d have to get a new number and a new account, but business accounts are basically just more expensive versions of what people already have. Who decides that I *must* use a business account, and why can't I just use the one in my dad's name? Who gets to decide that or force my hand? Does that apply to the electric bill too? Even though I don't have my own connection for that room or anything in my name?

My little setup would basically be competing with my current employer. The company I work for is slowly dying, so I'm trying to get my own thing ready before they fold. Do I need to justify myself to them or ask for permission to start my own business?

And what's the deal with paying mandatory contributions for Social Security and Medicare if I'm working full-time at my current job where they already cover everything for me? Do I still have to pay those $600 or do I just pay the difference between what my employer pays and what my business income requires at the end of the year?

What about the estimated income tax for a new business in its first year? Do I actually pay it or not? How does that math even work? At the end of the year, does the business income just get added to my salary from my job and then calculated... or what? I'm struggling to wrap my head around it since everyone talks about a small business as if it's just an extension of a regular person.

Can you actually get a "pass" on the U.S. Chamber of Commerce dues during the first year if you request it in writing? Is that true?

Got a few more questions, but I wanted to clear these up first. Thanks in advance.

Matthew Morris28 said:Thinking about starting my own little IT shop. Mostly coding and computer repair stuff.

Most of it makes sense, except for this:

The work that doesn't require General Motors would be done at home. The catch is the house and everything on the property is in my dad's name. I don't own anything, not even a share of it. Do I actually have to rent space from him? Isn't there some other way? It feels pretty stupid to bother a retiree and drag both of us down to the IRS just to deal with all his tax filings.

Also, the landline and the internet are under his name. Say I don't need the phone, but I can't work without web access. I guess I’d have to get a new number and a new account, but business accounts are basically just more expensive versions of what people already have. Who decides that I *must* use a business account, and why can't I just use the one in my dad's name? Who gets to decide that or force my hand? Does that apply to the electric bill too? Even though I don't have my own connection for that room or anything in my name?

My little setup would basically be competing with my current employer. The company I work for is slowly dying, so I'm trying to get my own thing ready before they fold. Do I need to justify myself to them or ask for permission to start my own business?

And what's the deal with paying mandatory contributions for Social Security and Medicare if I'm working full-time at my current job where they already cover everything for me? Do I still have to pay those $600 or do I just pay the difference between what my employer pays and what my business income requires at the end of the year?

What about the estimated income tax for a new business in its first year? Do I actually pay it or not? How does that math even work? At the end of the year, does the business income just get added to my salary from my job and then calculated... or what? I'm struggling to wrap my head around it since everyone talks about a small business as if it's just an extension of a regular person.

Can you actually get a "pass" on the U.S. Chamber of Commerce dues during the first year if you request it in writing? Is that true?

Got a few more questions, but I wanted to clear these up first. Thanks in advance.

Well, software development can fall under general computer services, which means you could technically register the business at your home address. However, if you want to offer hardware repair services, you’ll likely need a dedicated commercial space that meets local zoning regulations and specific licensing requirements.

The issue is that the house and everything on the property is in my father's name. I don't own any part of it, nor am I a co-owner. Am I forced to sign a formal lease with him? Is there really no other way? It feels incredibly silly to drag a retiree into this mess, making him deal with the IRS and all those extra tax filings just because of me.

That shouldn't be an issue at all. You can just head down to a notary with your dad, and he can simply sign a consent form allowing you to use the space. You can register the business at your current residential address, provided you have the owner's permission. There's no need for a formal lease unless you actually want one for some reason.

Also, the landline and the internet connection are both in his name. Let's say I don't strictly need the phone, but I absolutely need the web access to function. I assume I'd have to set up a brand-new number and a separate internet account, but for business users, the only real difference is that it costs more. Who decides that I *must* use a business-tier connection? Why couldn't I just use the existing service registered to my father? And who has the authority to force that distinction upon me? Does this apply to the electricity too, even though I don't have a separate meter for that room and nothing is in my name?

Again, it’s really not a major hurdle. Your father can just call AT&T and sign off on transferring the line over to your business. The only change would be that the directory lists your business name instead of his. All the bills will go to the business, and you just record them in your bookkeeping.
EDIT: Just keep in mind, if you don't opt for a specific business package from AT&T (which is noticeably pricier than residential plans), you won't be able to write those expenses off. As for the electricity, you might be able to claim a portion of the bill as a business expense—maybe around 30%, if I recall correctly—but you should definitely run that by an accountant first.

Quote:I want this business to be competitive with my current employer. The company I work for is slowly dying, and I'd like to have my own thing ready to go by the time they finally fold. Do I have to justify this to my boss or ask for special permission to start my own venture? Yes, you do. There are legal restrictions regarding competing with your employer. If you engage in activities that directly compete with your current job, you generally need to have written consent from the company.

Quote:What happens regarding mandatory contributions like Social Security and Medicare if I'm already working full-time for someone else, and they are already paying all my taxes and benefits? Will I still be required to pay those amounts through my own business?

$600or at the end of the year, do I just pay the difference between what my company contributes and the amount required by my business income?

Everything gets settled based on your annual tax return. Naturally, you’re just covering the gap between what’s already been paid and what you actually earned. Of course, the whole thing really hinges on how effectively you manage to write off your business expenses... 🙂

What’s the deal with income tax prepayments for a sole proprietorship in its first year? Am I actually expected to pay them or not? And how does the math even work? At the end of the year, is the business income just lumped together with my salary from the firm and then everything is recalculated, or...? I find it a bit difficult to wrap my head around because people always talk about a small business as if it were just an extension of the individual.

Usually, I just let my accountant lose sleep over those details, but... It seems to me there aren't any prepayments during that first year. You just tally everything up at year-end and pay the tax based on that total. The prepayment applies to the business earnings specifically, not the entire sum. Perhaps I’m mistaken, who knows; I don't care to exhaust myself over it...

Can the Chamber of Commerce membership fee be "waived" during the first year—meaning, can you opt out if you submit a written request? Is that right?

You don't even deal with the Chamber of Commerce directly, but you do have to pay the local trade association fees, which offer absolutely zero benefit to you; it's just yet another greasy little levy imposed by this country. Not to mention the corporate taxes (just because you've chosen to run a business...) or those various local permit fees...

Anyway, shoot me a DM if you're interested; I'm looking for someone I could outsource some work to... 🙂

What are all the actual fees an entrepreneur has to shell out? Where can I find a full list—things like rent, membership dues, etc.—excluding taxes?

Edit: A follow-up regarding the quarterly estimated tax system.
If I’m understanding this correctly, I just pay them a set amount every three months. As long as my total revenue stays under $85,000, am I covered? Does that mean there’s nothing else to settle at the end of the year?

When registering with the IRS, there's a field for "expected annual income." For those on the simplified tax method, what figure is actually recommended to put down?

Thanks!

David Mitchell4 said:What are all the actual fees an entrepreneur has to shell out? Where can I find a full list—things like rent, membership dues, etc.—excluding taxes?

Edit: A follow-up regarding the quarterly estimated tax system.
If I’m understanding this correctly, I just pay them a set amount every three months. As long as my total revenue stays under $85,000, am I covered? Does that mean there’s nothing else to settle at the end of the year?

When registering with the IRS, there's a field for "expected annual income." For those on the simplified tax method, what figure is actually recommended to put down?

Thanks!

"Requirements for simplified quarterly taxation:
• The business cannot be registered for Sales Tax collection.
• The business cannot be a partnership.
• The business cannot have separate branches or satellite locations.
• The business CANNOT engage in retail trade and/or restaurant services.
If you qualify for this simplified method, it is assumed that you will generate $4250 in profit—meaning the difference between $28 total receipts and expenses, calculated as 85% of that amount ($24).
Tax on that profit is paid at a flat rate of 12%, plus any local municipal surcharges based on where you live. Essentially, if we assume you live in an area with a local surcharge, you would be required to pay slightly more than $127 to the Treasury at the end of every quarter.
The main advantage of this setup is that you aren't required to maintain full commercial accounting books, since you accepted these conditions when applying for the simplified status.
The downside is that you must pay that specified tax amount regardless of how your business actually performs during the year—even if you end up operating at a loss.
Since running a business at a loss isn't illegal, in our opinion, this might not be the smartest business move for everyone. For a small operation like this, you could pay about $133 per month for a professional accountant—which, of course, counts as a deductible business expense, and then you would only pay tax based on your actual realized profit. If there's no profit, there's no tax. Furthermore, losses can be carried forward for five years to offset income in future years.
Note: Even those on the simplified plan must maintain the following records:
• A record of sales/receipts for cash transactions.
• You must issue invoices/receipts just like any other business owner.
• If you employ staff, you must maintain all required payroll and HR documentation.
How do you become a 'simplified taxpayer'?
1. If you are a brand-new business, you indicate this request on the registration forms submitted to the IRS.
2. If you were previously paying taxes based on full accounting books but now meet the requirements for simplified taxation, you must submit your request to the IRS by January 15th of the tax year. You will also need to include: the standard application forms; a summary of receipts and expenses from the previous year; and a summary of the total amount of money owed (an extract from your Accounts Receivable);
Note: If your business is located in a designated rural area, a remote island territory, or a specific mountainous region (such as somewhere like San Francisco), your simplified tax may be reduced by 25–75%.

A simplified taxpayer does not file a standard tax return, provided they have no other types of income that require one."

Regarding the other fees, I believe things like local occupancy taxes or various turnover-based levies aren't paid because no formal tax return is filed, but it's definitely best to double-check that with the IRS or your local tax office.

Zenexpert, thanks so much!

I've got the right background for computer repair, though I’d probably lean more toward transit sales, coding, and maybe a little bit of systems integration—at least on paper.
I'll shoot you a DM about that outsourcing stuff once I catch a break, but honestly, things are a little slammed on my end right now.

Vitas, thanks! I stumbled upon that same page myself, but I’m still looking for someone to actually confirm things for me. I have one simple question 🙂 regarding rental income. I'll probably just fire off an email to the IRS and hope they eventually get back to me... unless, of course, there's someone here who actually knows the answer. 🙂 Thanks again..

So, should I go with a sole proprietorship or an LLC?

The field is tourism and hospitality.

If you’re actually serious about starting your own small business, I’d highly recommend grabbing the GAO’s guide on entrepreneurship. It covers a ton of the basics. Sadly, though, it doesn't touch on the stuff I was asking you guys about.

Just to recap what I know so far:

First off, you gotta pay for the setup—business licenses, opening a bank account, getting a stamp made, and printing your company sign.

- You’ve got quarterly dues for the County Recorder (I messed up earlier when I mentioned the US Chamber of Commerce, but it’s basically the same thing—just useless parasites).
- An annual fee for the County Recorder based on a percentage of your yearly revenue.
- Income tax prepayments.
- Monthly health and social security taxes (plus all those other employment levies and disability fees, I guess) via a flat rate if you aren't working for someone else.
- Annual corporate taxes.
- If you get into specific industries or certain areas, you'll have to deal with local tourism board fees—more parasites.
- And if you set up shop in a historic district, there's a heritage rent (in my city, they just use that money to plant flowers in the park).
- Monthly bank fees, online banking, and stuff like that.

- Plus, you'll probably need a phone, electricity, water, maybe even office rent, an accountant...

@Veky - You nailed it with that post about parasites.

Speaking of parasites though, does anyone actually know what the Chamber of Commerce even does? I mean, some of our money goes straight into their pockets, but whenever I try to reach out, they can't give me a straight answer. I guess I just don't see the point of being a small business owner if there's no actual benefit for us.

can someone please walk me through how you actually calculate pricing because everything I've been digging up on Google is just useless filler that doesn't tell me anything practical... or am I supposed to just hire some high-priced consultant to do it for me? I'm planning on opening my own fast food joint

Hello everyone. I have a question and am hoping someone here might have some insight to offer. I am planning to launch a small business—a specialty shop focused on herbal oils, bee products, and botanical teas. My current hurdle is my educational background; I hold a diploma from an AT&T vocational school, but without a specific degree in commerce, I am hitting a wall regarding the legal requirements to open this type of enterprise. The local Chamber of Commerce offers a certification exam for retail management and product knowledge. If I were to pass this exam, would that suffice to allow me to register the business under my own name? If this certification isn't enough to satisfy the licensing requirements, are there other paths, such as specific accredited courses, that would bridge the gap? For instance, the Chamber suggested I contact the Department of Commerce for guidance, but I am still waiting to hear back from them.

Just shoot an email over to the local Chamber of Commerce—they were incredibly responsive when a friend of mine needed help setting up her small business venture.

So, here's the deal: I spend my free time flipping stuff online, basically buying low and selling for maybe a 15-35% markup. Honestly, for a college student just trying to get by, things are actually going pretty well right now. Over the last 11 months, I’ve managed to pull in about $2333 in profit. I'm starting to wonder if I should go through the whole headache of registering a business or if I should just keep it on the low. Like, is this even worth turning into a formal thing? I don't really have a website or anything to promote myself, so I'm just kind of flying under the radar at the moment.

Nathan Cox25 said:Just shoot an email over to the local Chamber of Commerce—they were incredibly responsive when a friend of mine needed help setting up her small business venture.

The Chamber of Commerce didn't even bother replying to my inquiry, and neither did the Small Business Association. 🙂
I'm looking for the same info as Andrea, though I have a high school diploma and a college degree under my belt, so if anyone has any leads, please let me know. 🙂