Starting a Business: A CPA’s Guide to Getting It Right From Day One

Starting a business is exciting—but it can also feel overwhelming. From choosing the right structure to keeping your books in order, the decisions you make early on can have a big impact down the road. As CPAs, we often meet entrepreneurs after they’ve already run into tax or compliance issues. The truth is, with the right planning, you can avoid those headaches and set your business up for success from day one.

Here are the key steps every new business owner should take:

1. Choose the Right Business Structure

Should you be a sole proprietor, LLC, partnership, or S corporation? Each comes with different tax implications, liability protection, and paperwork requirements. For example:

• LLCs provide liability protection and flexibility.
• S Corporations may reduce self-employment taxes but come with stricter rules.
• Sole Proprietorships are easy to start but offer no personal protection.

💡 Tip: Talk with a CPA before filing your paperwork. A quick consultation can save you thousands in taxes later.

2. Register and Get the Necessary Permits

Once you’ve chosen your structure, you’ll need to:

• Register your business name with the state.
• Apply for an EIN (Employer Identification Number) with the IRS.
• Obtain any industry-specific licenses or local permits.

Skipping this step can cause delays or penalties down the line.

3. Separate Your Business and Personal Finances

One of the biggest mistakes new business owners make is mixing personal and business expenses. Open a separate business bank account and, if possible, a dedicated credit card. This makes bookkeeping easier and helps protect your personal assets.

4. Set Up Your Bookkeeping System Early

Even if you only have a few transactions a month, get into the habit of recording income and expenses. Whether you use QuickBooks, Xero, or spreadsheets, consistency is key.

💡 Pro Tip: Hiring a CPA or bookkeeper early will not only keep you compliant but also free up your time to focus on growing your business.

5. Plan Ahead for Taxes

Many entrepreneurs are surprised by how much they owe in taxes their first year. Setting aside money each month (typically 25–30% of profits) for taxes helps prevent cash flow problems later. Depending on your business, you may also need to make quarterly estimated tax payments.

6. Don’t Forget About Compliance

Annual reports, franchise taxes, payroll filings—staying compliant isn’t glamorous, but it’s essential. Missing deadlines can result in penalties or even the suspension of your business license. A CPA can help you set up a compliance calendar so nothing slips through the cracks.

Final Thoughts

Starting a business isn’t just about passion—it’s about building a strong financial foundation. By making smart decisions early, you’ll save yourself time, stress, and money in the long run.

👉 If you’re thinking about starting a business, our CPA team can help you choose the right structure, set up your books, and build a tax strategy tailored to your goals. Contact us today for a free consultation.