32 million small businesses account for 54% of all sales and 55% of all jobs in America. Small businesses are our life blood, our favorite places to relax, the soul and history of our towns, as well as the innovators changing the way we do business and see the world.

pie chart of small businesses accounting for 54% of all sales and 55% of all jobs in America.
light bulb - business ideas

It's an exciting time to run a small business. Banks are lending more five years out from the end of the recession. E-commerce allows small businesses to reach niche audiences worldwide, and the ability for anyone to market themselves to large audiences. Younger Americans are seeing self employment and startup ventures as a way to make their ideas come to life and liberate themselves from a 9-5 in a cubicle. Yet for all this, there are many challenges to running a small business, and well, succeeding so your business isn't so small anymore.

For this reason the editors at accounting-degree.org decided to put together a crash course on some of the most troublesome topics for small business owners: small business accounting, and taxes.

 
Table of Contents

Chapter:1 Are You a Small Business?

Are You a Small Business?

If you have a small business, you probably know it. But what is a small business exactly? Small businesses are usually sole practitioners, partnerships, or privately-owned corporations. To qualify for U.S. Small Business Administration programs you must have less than 500 employees (for most industries), but small businesses can also be classified through number of sales, amount of assets, and net profits.

Typical small businesses include convenience stores, artisan or small shops, craftsmen, lawyers, accountants, restaurants, bed and breakfasts, artists, small-scale manufacturing, creative agencies, and small online service providers.

Here are some tools to help you determine if you are a small business, and to step you through types of incorporation.

Chapter:2 Hiring Your First Employees

Hiring Your First Employees

Once you've started a business, or have run it alone for a period and are looking to expand, it's time to think about your first hire. There are several options, each with unique advantages and disadvantages.

By one estimate the average cost of recruiting, hiring, and training a new employee is around $4,000. For top talent, this number might be more. Then there are legal concerns, insurance, and the cost of retaining the employee to potentially worry about. For some, contracting out work, using headhunters, or bringing in family members or interns might be better options.

The decision to hire your first employee may seem daunting. Here are a few resources to help you with your decision.

Chapter:3 Accounting Basics

Accounting Basics

Though basic accounting may be simple common sense to some, basic accounting skills are incredibly important to managing a small business. From keeping employees happy, to getting ready for tax season, to simply keeping your business afloat, here are some basic accounting resources.

Chapter:4 Accounting for Small Businesses

Accounting for Small Businesses

Some essential accounting practices for small businesses include the ability to track the cash flow of income and expenses, calculate necessary tax payments, manage payroll and produce financial reports. There are many tools online to help with accounting, but in general, small businesses have three non-exclusive options:

Chapter:5 Avoiding Common Accounting Mistakes

Avoiding Common Accounting Mistakes

With 32 million American small businesses out there, chances are there's a consensus on common small business mistakes, and how to fix them. Here are some lists of common small business mistakes, and some resources for how to connect with your larger business community for answers, networking, and opportunity.

Chapter:6 Banking for Small Businesses

Banking for Small Businesses

You're going to want a lot more than just a bank account in most ventures. Financial services cost money, and having a good relationship with a local banker can be a very valuable asset for your company. For these reasons, it's important to shop around for the best bank for your needs. From large banks with more money to lend, to local banks with local market knowledge, it's worth your time to think about the best bank for your venture.

Chapter:7 Small Small Business Loans

Small Business Loans

Whether you've just created your business plan, or are looking to expand an already extant business, chances are you've thought about taking out a small business loan. The good news is that, nearly five years after the end of the recession, banks are again making it easier to obtain business loans. Banks are also offering more 10-year loans, when 5-year terms have been common over the last few years.

If you have a small business loan already, or are looking to borrow money, check out our resources below.

Chapter:8 Local & Federal Small Business Resources

Local & Federal Small Business Resources

For all of the political bluster about main street America and helping our small businesses thrive, you would hope there would be government resources to help small businesses. It turns out there are. From general business management education, to counseling on regulations and financing, to special programs for minority and women-led business, here are our state and federal business resources.

The U.S. Small Business Administration

Small Business Learning Center  »»»

The U.S. Small Business Administration

Small Business Development Centers  »»»

U.S. Department of Commerce

The Minority Business Development Agency  »»»

The U.S. Small Business Administration

Office of Women's Business Ownership  »»»

Chapter:9 Small Business Taxes

Small Business Taxes

Ah, the subject we've all be waiting for! And I assure you, for good reason. If personal taxes are a challenge for you, then i'm afraid figuring out taxes for small businesses is an even greater one. But don't fear, here are some critical resources that can help you find your way.

Chapter:10 The ACA Marketplace

The ACA Marketplace

The Affordable Care Act (ACA) has caused great worry for some small business owners, while others have been overjoyed at newly available insurance plans. While businesses with less than 50 full-time employees are not subject to portions of the law requiring shared burden of insurance payments, businesses with less than 10 employees stand to gain the most through tax credits if they choose to offer insurance to their employees.

Regardless of the size of your business, the ACA's insurance offerings and tax repercussions are something to keep in mind.

healthcoverageguide.org

Laws and Rights  »»»

U.S. Department of Health & Human Services

Key Features of the Affordable Care Act  »»»

U.S. Department of Health & Human Services

State by State  »»»

HealthCare.gov

Get coverage for your employees now  »»»

healthcoverageguide.org

Small Business Health Insurance Premium Tax Credit Calculator  »»»

Chapter:11 Self-Employment

Self-Employment

For tax purposes, a person is self-employed if they are running a business as a sole proprietorship, independent contractor, as a member of a partnership, or as a member of a limited liability company that does not elect to be treated as a corporation. Self employment is increasingly common for careers such as programming, creative work, writing, sales, and even manufacturing. Here are our resources for accounting and taxation issues for the self employed.