Accounting Support Tips for Starting Your Own Business
Question: I have been working for a distributor for a few years, but I am thinking of leaving them and starting out on my own. What steps should I take?
Answer: Starting a business from scratch has many variables that need to be addressed. Here are four from the accountant’s perspective:
1. Be sure you are free of any non-compete agreement restrictions.
2. Some of the large distributors who take very large fees from you to be part of their business may have exit fees. If so, weigh the cost of those fees against the benefits of keeping the income you previously had to share. How long would it take you to pay yourself back for those exit fees? It might not be as long as you think.
3. Talk with your financial and legal adviser to find out which business structure is best for you.
4. Begin with a solid accounting system, such as QuickBooks. Define your preferences, including sales tax rates, chart of accounts and customized templates set up for our unique business. Be trained to use the system and its processes to make your orders as simple and complete as possible.
Some distributors rely on spreadsheets to start, and grow from there, but I believe starting out correctly is the better way to go. Your processes can be established to avoid errors, and you will look and feel more professional from the inside and outside.
Please email accounting questions you would like considered for the column to HGatter@AccountingSupportLLC.com with the subject line of "Ask the Accountant."
Harriet Gatter, owner of Accounting Support LLC, was an ad specialty distributor for 23 years and an adjunct professor of accounting at Neumann University. She sold her ad specialty business in 2012, became certified as a QuickBooks ProAdvisor, and now works exclusively with ad specialty distributors nationwide on their QuickBooks, order management and accounting needs.