5 Key Questions to Ask Yourself if You Plan to Start a Business

5 Key Questions to Ask Yourself if You Plan to Start a Business

By Marco Carbajo, SBA Guest Blogger

Starting a business takes planning, making important financial decisions, and completing a series of legal activities. You will need to set goals, put plans into action, assess your progress, make necessary adjustments and grow your business.
   There are plenty of things that every business needs to do to get off the ground. So, here are five key questions to ask yourself as you plan to start a business.

1) Do I have what it takes to make it as a business owner?
Before you start a business, you should be able to answer a few very important questions. What product or service are you offering? What makes your product or service different from everyone else? Who is your ideal customer? How does your product benefit them? Answering these key questions will help define your business identity.
   Once you identify your business identity it’s important to remember, success in business requires passion, a lot of hard work, staying power and drive. According to Elizabeth Wilson of Entrepreneur Magazine, while some 40 million businesses are started each year, only 350,000 break out of the pack and begin growing and making money.

2) What is my niche and who is my target customer?
Before you start a business it’s key to know who your paying customer is going to be. You may have a great product idea that people need, but that is not enough to break through. You need to solve a problem that people want a solution for, and more importantly are willing to pay for.
   Don’t get trapped into the mindset that if you don’t offer everything, you’ll miss out on customers. Offering everything doesn’t mean that every person will buy your products or services.
   Find your niche and identify your target market. A niche is a specialized product or service you offer to your ideal customer. Your target market is the ideal client looking for what you have to offer.

3) Who will be on my team to help with my new business?
Starting and growing a business requires more than going at it alone. It takes a team to build a successful business and it’s just as important as developing your product. Even if you plan to be a sole proprietor, you can benefit incredibly from creating an outside support team to keep you focused and on track.
   You’ll also need to pull together a team of people as you set up and launch your business. These will be people that are needed to set up and run a business such as a lawyer, accountant, sales rep, web developer, marketing agency, etc.
   Each of these people on your team brings something different to the table, it’s essential that you listen to their advice on what needs to be done. Having a team you can trust is crucial to the success of your business. Getting the right advice can save you from making costly mistakes now and in the future.

4) What amount of funding do I need to start?
Starting a new business doesn’t have to require a great deal of funding if you decide to bootstrap. However, it will involve some initial investment to cover startup costs.  The key here is to work through your options and determine how much business funding you will need to cover not only your startup costs but also ongoing expenses before you are generating a profit.
   Once you have an estimate in mind, there are a number of ways you can fund your startup, including business credit cards, lines of credit, vendor credit, a business loan, etc. You may find that a combination of these sources listed may work best.

5) What business structure should I choose?
The business entity you select will impact various factors from your business name, to your liability, to how you file your taxes. It’s essential to choose the right business structure when starting a business. Once you choose your business structure, you’ll also need to get a tax identification number and file for the necessary licenses and permits.
 
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3 Ways the New Tax Law Will Impact Your Taxes

3 Ways the New Tax Law Will Impact Your Taxes … and When They Take Effect

By Brooke Preston, Manta Contributor

Freelancers and independent contractors will see changes to tax rates and deductions next year, with some mandates still in effect now.

The Tax Cuts and Jobs Act was signed into law by President Trump in December, bringing significant changes to U.S. tax law. However, these changes will be rolled out at different times: While some, like changes to payroll withholding, may already be in motion, others won’t affect your tax return or total bill until next year.
Here are three key ways that freelancers and independent contractors will be impacted by the new tax bill, and when each will take effect.

 

Pass-Through Income Deduction  

A new pass-through benefit will reduce the business income you pay taxes on by up to 20% — starting with tax year 2018. If you’re a partnership, S corporation or sole proprietorship (freelancers are usually considered the latter), your business income is likely to qualify for the new deduction on “pass-through” business income.
While this change was designed to help small businesses, it will also benefit freelancers and independent contractors in many fields. You can take it even if you also take the standard deduction.
However, high-earning self-employed professionals in “service fields” (like healthcare, accounting and law) who earn more than $157,500 single or $315,000 couple from all income sources will see the benefit phase down after those thresholds. Dividends and interest from personal investments like stocks and bonds also aren’t eligible.
Still, most self-employed professionals could see significant savings when they file their taxes next year. Sadly, there will be no change in the tax burden on this year’s returns.

 

Lower Rates & Higher Deductions

Your tax rate may be lower and standard deductions higher — starting with tax year 2018. The new tax law will change tax brackets (what percent of your income you owe in federal taxes, based on your income level). All brackets will remain the same or become lower than previous years, so you should avoid any increase regardless of your income.
However, changes to tax brackets and the standard allowed deduction per person do not apply to the 2017 tax year; they’ll factor in for the first time when you file next year.

 

Health Coverage Requirements Remain

Affordable Care Act mandates are still in place — for this year’s filing. The future of the Affordable Care Act is uncertain. The individual mandate is scheduled to be repealed in time for next year’s tax filing. However, if control of Congress changes following November’s midterm elections, that requirement could be further amended. For filing 2017’s taxes, however, nothing has changed.