Getting Started in Your Own Business


By Erin Baehr,

Whether out of entrepreneurial desire or financial necessity, many people are starting their own businesses during this recession. I’d like to offer a few tips on getting started.

Once you have a viable business idea, your first stop is the PA Open 4 Business website,, where you can register your fictitious name, register your enterprise with the state, and register for taxes you may need, such as employment or sales tax.

It is recommended to consult an accountant and an attorney before choosing an entity, because it involves both liability protection needs and tax considerations. You will also need to apply for an Employer Identification Number from the Internal Revenue Service, which can be completed online at

You should have a business bank account to run all income and expenses through. I recommend two accounts; an operating account and a separate tax account, where you can deposit one third of your profits to cover self employment and income taxes (make quarterly tax payments from this account).

Estimate your overhead costs (such as rent, phone, utilities, and insurance) and variable expenses related to the cost of manufacturing or distributing your product or service (such as inventory, supplies, marketing, and packaging). Limit your commitment to fixed overhead as much as possible, to be adaptable to market conditions as well as changes that develop in the early stages of your business. Set a goal of how much you want to take home from the business, and back into the amount of gross sales you will need, considering projected expenses and taxes.

You’ll need liability insurance, workers’ compensation if you have employees, and possibly other coverage such as professional liability. Consult a commercial insurance agent to get the right coverage. If you’re working from home, let your homeowners’ insurance agent know.

Keeping the books correctly is critical. Quickbooks can be a good system for those who want to maintain their own books, once it is set up correctly. I highly recommend professional assistance for initial set up. If you make errors in the beginning, it can be difficult and time consuming to fix later. Keep receipts to document expenses, and track miles, even for the little trips that add up. At you can enter the date and address of your trips; it calculates the miles and keeps a log. If you have a smartphone- there’s an app for that. Be sure to note beginning and end of year odometer readings. Review income statements regularly; don’t wait until year end to see if your business is profitable. Seek professional advice to interpret the reports if you don’t understand them, or for a second opinion. Being aware of your business health enables you to see what’s working and what isn’t, and make necessary changes along the way.

Here’s to your success!

Erin Baehr is the owner of Baehr Family Financial (, offering personal and business financial planning on a fee-only basis, without product sales.