Entrepreneur’s Diary

It seems as if addition, subtraction, multiplication, and division should be fairly simple. It is, until you want to apply it to accounting and do your tax calculations! There are many ramifications resulting from your choice of corporate structure on how you end up paying taxes. For example, who in their right mind would choose to pay taxes twice on profits you make from your company? Well, if you choose a C-Corp for your company structure, that’s just what you’ll be doing! But sometimes a C-Corp is the best choice, and you might ask why. I think my accountant was probably the key professional with whom I interacted with during the early days of my start-up. I recommend seeking an accountant’s advice early, before you create your company structure.

Getting Started

At this point in the text, we’ve covered the basic steps of defining your business, developing a marketing strategy, and differentiating your business from the competition. In this chapter, we cover the creation and use of financial accounting statements in the typical business plan, including depreciation and taxation issues. We stress the importance of creating these financial statements from the top down versus the bottom up by basing the figures on details from the demand side of the equation, that is, sales and the costs of production.