7 Tips for New Businesses | Hacker News Reader

7 Tips for New Businesses

b.lesseverything.com

17 pointsauston11 comments

Keep in mind, these are accounting tips for someone who's got a full time job and starting a business on the side.

With a full time job, you get taxed on your normal paycheck and on April 15th you pay the gov't the taxes you owe from your side business (if your withholdings weren't enough to cover tax liability).

If you don't have a full time job, you've gotta pay quarterly estimated taxes or pay interest on what you owe later on.

Also keep in mind, I'm not an accountant but the guy who gave these tips is one.

I think LLC is much better than Sole Proprietorship, its really not that much more work and you get the advantage of having more legitimacy

This post is targeted at people starting a one-man shop, not entrepreneurs in the sense of the word as used on hn.

If you've got partners and plan to grow and/or are planning on hiring several employees in the next few months, you should do the couple of hours of homework and lawyering it takes to file the right papers at the beginning.

If you have partners or upcoming hires, then you shouldn't look to any blog for guidance. If you're like me, hoping for traction to attract a good cofounder, this seems applicable.

I agree that following their advice of essentially ignoring the legal entity question for a while is the way to go short term, until you're ready to grow.

I should have been more specific and said that the fact that they neglect to mention what you should do when it's time to grow, and only recommend creating a legal entity past the 5-year mark, tells me that they're definitely not focused on HN types as their target audience. They're targeting the self-employed.

If you want a cofounder, you don't want a sole proprietorship, because you need to divide equity.

When I find a cofounder we can figure out what kind of corporation to form, transfer IP to it, and then split equity. Before incorporating, sole proprietorship is what you get by default. I wouldn't have had to fill out any paperwork at all except that I wanted to be able to advertise using the name OurDoings instead of Bruce Lewis.

Wokay. That makes sense. Of all the things we had to do to start our company, incorporation was the least dramatic. Liability insurance is the real bitch.

I'm sorry, but what exactly do you mean by not entrepreneurs in the sense of the word as used on hn?

Not building a facebook app / widget / twitter clone that you expect to flip to Microsoft/Google/Yahoo for $$$.

(Which admittedly is a bit harsh on the HN crowd)

You're right, it's presumptuous and probably inaccurate for me to say that.

My perspective (which I was mistakenly projecting on the rest of the community) doesn't have much room for being self-employed doing projects for other people as a long-term goal. But that's the angle the article takes I think.

I can see that some people here might see themselves staying a sole proprietorship for 5 years, and creating a lot of value in doing so. Just not my cup of tea.

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