Starting a New Business? The Important Steps To Take - Part 3

The first set of taxes to consider are federal taxes. These consist of income, social security, Medicare, and if applicable, excise taxes. The good news here is that most small businesses pay no specific federal business tax. If you are a sole proprietorship, partnership, or LLC, all federal taxes are simply passed to the owner via their personal tax return. If you happen to have a corporation, you will have to pay the flat corporate tax rate of 21% (at the time of this writing). Excise taxes are levied against a particular good or service. Many goods and services including gasoline, alcohol and indoor tanning are subject to these so it is important to check to make sure you are not liable for any of those as well.

If your business will be selling a product, you will also need to collect and pay sales tax. To begin, in Georgia, register with the Georgia Tax Center and apply for a Georgia Sales and Use Tax Number. Sales tax returns are completed monthly and are paid electronically in most cases. There are several aspects of sales tax that new business owners should be aware of. First, sales tax is determined by the location where the customer receives the product. That means if your business is based in Gwinnett County, but sends their product to Fulton County, you will need to charge the higher sales tax in Fulton on the invoice. Second, while many services are exempt from sales tax, you should check to make sure all of your services fall into that category. Some services such as hotels, transportation, and entertainment such as games and amusements are taxable in Georgia. Lastly, Georgia charges a “use tax.” If you bring property or equipment into Georgia, you may have to pay a use tax if you use it for your business. It is paid at the same time as normal sales tax.



Another state and local tax your business needs to be prepared for is payroll taxes. First, you will need to register your new business with the state and apply for Withholding Tax Payroll Number. How often you will have to remit them to the state varies depending on how much your company makes. Businesses that withhold over $50,000 in taxes during their “lookback period” of July 1-June 30 will have to send payment electronically after each paycheck distribution. Otherwise, it will normally be a monthly payment. For more specific info, check out the GA Department of Revenue’s Employer’s Tax Guide: https://dor.georgia.gov/employers-tax-guide 

In addition to these, most businesses in Georgia will need to pay an unemployment insurance (UI) tax. You will start by registering your new business with the Georgia Department of Labor. The GDOL will confirm if you are liable to offer UI to your employees. Currently, the UI tax rate is just 2.7%. The two most common mistakes that new companies make is failing to post the required notice (in a place where employees can regularly see it) and misclassifying employees as independent contractors. The latter can lead to penalties and fines, so be honest with your employee designations. 

The final consideration is worker’s compensation insurance. In Georgia, if you regularly employee three or more people (full or part-time), you are required to provide workers’ compensation insurance. The state of Georgia does not offer this insurance directly so look at adding it to an existing policy.

The most common way for businesses to advertise is through their website. Gone are the days where only computer science majors can make professional-looking websites. There are many low cost DIY options available for small businesses or better yet, some very good other small business owners that do just this very thing inexpensively. Just because you can do it yourself, doesn’t mean that it's always your best option. Web designers can greatly assist with setting up a site complete with plenty of engaging graphics and are often easier to maintain. This is important as you always want to update your site with the latest products and prices. Make sure your website is user-friendly and your contact info displayed prominently. Lastly, you may choose to take orders and payments from the web, but make sure your billing system is readily compatible. (Back in Step 3)

Your website is a great way to get connected with potential customers, but make sure you pair that with a robust presence on social media. There are many options out there, but make sure you focus on the sites where your targeted customer base spends their time. A Facebook page is the minimum requirement, with over a billion users worldwide. Also consider an Instagram page, especially if you can take professional images of your products or if your customer demographic skews younger. Other options to consider include Twitter, Pinterest and a YouTube channel. All your social media pages should link to your website as well as with clear links from your site to your social media. You can also consider paid advertisements on many of these sites which will reach users who have interests connected to your business. This can be one of the most cost-effective ways to specifically target potential customers.

The third way you can advertise for your new business is through the various companies that review products and services. Google Reviews is the most well-known. Your startup’s reviews will forever be connected to its Google Search, so make sure to encourage happy customers to leave a review and respond to negative ones quickly and professionally. If you are lucky, fixing the problem can lead to the person deleting it. There are other review options to consider as well depending on what your product or service you are offering. Angie’s List posts reviews and connects customers to home improvement and repair companies. If your business is in the hospitality industry, consider a TripAdvisor page.

A fourth option for advertising your business is through local events and festivals. Held throughout the year especially in cities and suburbs, these gatherings are not only a great way to meet customers, but simply have large numbers of people see your name and brand. You also don’t need to sell products at these events, as many strictly serviced based businesses attend as well. One caveat to mention here is to wait until your business is up and running before advertising at these events.

The last method of advertising we will discuss is through business associations. Although joining one is beneficial for a multitude of reasons, these groups of businesses connect you to your community faster. In addition to internal referrals, many associations try to recommend your business to their own clients as well. With a low cost to join, business associations can add another accessible option for new startups to advertise.

The modern startup has far more affordable and targeted advertising options. The most important thing to keep in mind is utilize them correctly and don’t add options that won’t be maintained or target the right audiences. With a multi-faceted approach, you can reach millions of potential customers before you even make it to the grand opening. Opening a new business? We can help! Contact us today and let our twenty years in the accounting industry help your new company start off on the right path