Tell me about starting your own business

Pay for an hour of a CPAs time tonight get advice on how to set up your books and possible organizational structure of your business.

Much easier to set things up correctly now than have to undo (or pay someone to undo) a mess you created without realizing in the future.

Good advice here ^^^

“Inspect what you expect “

I have a small handful of things to offer, but in general, it is general contracting. I have 3 jobs already lined up and a couple of labor teams ready to go. I also have contacts with 2 local builders that are already willing to give me more business. The work I have lined up is what I believe is manageable for a startup. Decent margins, and not a high amount of overhead. If I can grow it, even just a little, I'll incrementally go after larger stuff, but for now, I'm going to start where I can. I've got enough startup capital to get going easily, and it's what I'm willing to risk to get started. I foresee keeping reliable crews fed with enough work to keep them happy will be a challenge.

Until I get a solid work stream, I won't be hiring employees. But I 100% can appreciate that sentiment coming from where I am currently. There are so many revenue leaks with a large company and it blows my mind that some people are allowed to just exist at work.

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Pay for an hour of a CPAs time

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An hour will accomplish nothing and statements like this are why people bitch and moan come tax time.

Could you explain what you do in an hour?

Some people think everything is deductible.

This is false.

Legitimate business expenses only.

Keep IP you’ve developed for your side gig separate from the IP you develop as an employee

Sure, walk them through filing with the secretary of state, explain basic deductions, explain that loan payments are not the same as expenses, talk about contributions and distributions, review their chart of accounts if they have accounting software, explain reconciliations, talk about financial statements and what they mean from a high level, lately I’ve been explaining why what they saw on TikTok was wrong.

I’m not holding their hand through these tasks but explaining the importance of good bookkeeping habits and best practices. An hour doesn’t give me a ton of time to get into all id like but I’ve find I can explain these concepts to people who don’t know anything about accounting.


This approach usually gets a follow up meeting or call and more often than not a new client. Feed back from these meetings is usually “thank you so much for clarifying that” or “you’ve explained to me what another accountant couldn’t”

Not taking these types of meetings right now, though.

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Anyone care to explain to me the write-offs

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he is writing off damn near everything he buys

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I guess it’s working- for now.

Tickets/golf: NO

“ 50% Deductible Expenses: Includes client meals, business travel meals, and food for in-office meetings.”

100% for office parties.

I’d keep meticulous records.


LINK

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What are things I may not be expecting generically?

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More pain and heartache than you planning for. I am not going to repeat the good answers already given here and more recap the journey.

We went down this path for my wife 15 years ago, but now have a business with around 50 people and offices in Texas and Oklahoma. It is going to start slow and I mean real slow. You have a job already, so keep it as you plan, but you are going to burn some cash. There are start up cost of course, and then you are going to have yearly cost with lawyers, accountants and benefits. You will need to market and advertise if you are in the General Contracting realm, which will be more costs and without knowing where you live could have some tough competition reducing your margins.

Shorter version, you are not making a living wage for some time and going to burn at lot of hours of your life.

If you make it past the first few years with some growth and look to expand with employees on staff -

1. Salary and benefits are going to matter. During the slow times when it was just you, you could digest not getting a paycheck. This is going to change when you hire other people. You cannot miss paying people, it will become one of your most important tasks as a business owner.

2. You are going to want a revolving line of credit with a financial institution. This is important to pay your bills and people on time. Checks coming in from clients will always be feast or famine, but payroll and bills will always be there. No matter what your line of credit limit is, you are going to hit it, probably several times.

3. Benefit pain is going to be an annual event. Insurance is always changing and you will probably be changing insurance companies every 3-5 years.

4. You are going to be involved in some legal action at some point, either receiving or giving. It come from a client, a sub, a prime, or an employee; it is going to happen. You will have to decide how much fight you want, as only lawyers win.

5. Hiring and firing employees is not easy. Prepare to work hard finding the right candidate and even in "at will" states prepare for legal action when you let go of some employees. If they push legal action, you will end up spending money on legal fees, even if their fabricated claims are false.

6. Prepare for unexpected disruption in what you are offering. We had a key employee get killed out in the field. You will want to make sure there is some form of redundancy.

7. Office space comes with an expense and time finding the right place. Don't do it, until you are at a point you need it.

8. Technology. You are a software developer now, so you probably can breeze through this part. Find that all in one solution though for payroll, billing, timesheet, etc., even if it costs more. The time and effort it takes to setup the integrations between differing systems might not be worth the cost savings. Leverage cloud offerings as well, to prevent aging infrastructure in your home or office.

9. Try to not be HR. Hire a person or company to handle those tasks.

Seems like a bunch of negative, but in the end it is worth it. If I can ever get her to sell this off, retirement here I come.