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As an accountant, I get this question a lot. Many people are convinced that being self employed is the way to go, simply because you can be your own boss, establish your own hours, etc. All of that's true (which is why my husband and I are both self employed), but the fact is the GREAT majority of small businesses do not make it.

Despite the fact that most small businesses crater, I still believe that being self employed is preferable to working for an employer. However, there's one caveat: in order to succeed, one must not only do her homework, she must remain very nearly anal when it comes to record keeping. There is no magic formula for success; in my experience, the same basic problems keep most business ventures from taking off. This article starts on the assumption that all of the necessary market evaluations have taken place, and that you've come to the conclusion that your business idea is indeed, a viable one. Assuming this is so, we'll begin where I come in as an accountant, and we'll look at some of the issues that can afford no compromise.

1. Make sure you understand the necessity of establishing a detailed accounting/bookkeeping system BEFORE the first transaction ( which could mean loan closing, or initial investments preliminary transactions that must be dealt with before business commences). I have worked with many people who didn't bother to get all of their bookkeeping ducks in a row from the very beginning, and that simple oversight was the kiss of death. I remember one client, a builder, who thought that he was making between $10,000 and $12,000 profit per house he sold. When I finally got his books in order (and this was no small task, I had to locate and enter EVERY transaction, from land closings, to rolls of housewrap, to packages of nails), I discovered he was, in fact LOSING $2000 per structure. By the time I brought this to his attention (he didn't call me in until he'd been building for a year), the bank cut off funding for further development.
2. If you have employees, make sure you stay on top of filing your payroll taxes. I have seen MANY small businesses go under because they are late getting payroll funds to the state and the IRS, respectively. In the case of employee taxes, the states and the IRS show no mercy. This is because when you fail to file employee taxes, you are holding on to money that isn't your own some of those funds were taken from the payroll checks from your employees. So, in essence

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