How to do a small business in Los Angeles. Like...the paperwork.

August 28, 2020 10:12 PM

A friend started a small business doing personal training in Los Angeles this year and got a lot a clients much faster than anticipated. Now she's worried about what she hasn't done yet but thought she'd have time to learn. Slowly. Like what she should be deducting for taxes. And business licenses. Getting paid on Venmo. And, well...everything. She asked for my help but I feel out of my depth. Is there some sort of "So you have an LA small business" for dummies out there?
posted by rileyray3000 to Work & Money (6 answers total)

I can't answer the general question, but on the specific subject of operating a business in the city of Los Angeles: she needs to register her business with the city here. Each year they will send her a form (an extremely basic single page tax return) to fill out to declare her income and pay city business tax. I believe $0 is due on income less than $100,000, but there is a small (like $20) fine if you don't register and they have to chase you.
posted by caek at 10:32 PM on August 28, 2020

Your friend might be able to get help from a small business consultant via SCORE or other nonprofits. Check out the local SBA.gov for resources.
posted by metahawk at 11:34 PM on August 28, 2020 [1 favorite]

the city of LA has a guide.
posted by jimw at 12:24 AM on August 29, 2020 [2 favorites]

Cannot second caek fast enough. Enforcement for failure to have a business license or pay local business taxes is very aggressive.
posted by Red Desk at 1:51 AM on August 29, 2020

She should find a good accountant! Easier said than done. Ask other small business owners you know. (I’ll say I got my worst-ever accountant through a SBA class i took, and the best ones from business-owning friends. And I’ve gotten mine at least one more long-term client and passed his info on to a lot of others. This is a normal small-business-person conversation!). An accountant will be able to advise on a lot of this.
posted by jeweled accumulation at 6:25 AM on August 29, 2020

I have an LA small business. I say:
-- Yes, register the business at that city link above.
-- Yes, find a good accountant. Mine is in Glendale. Memail me if you want the info.
-- The advice I got at first was "save 50% of your income for taxes" and that's a good place to start before you've got things dialed in.
-- A corollary of that is: figure out a way to track all of your income in one spot. This can be pesky if payment is coming in a variety of ways. (I get venmo, paypal, zelle, checks.) Be anal about this and life will be much happier at tax time.
-- And track all your business expenses. Even if it's just "every receipt goes in a shoe box" you'll be ahead of the game.
posted by BlahLaLa at 9:14 AM on August 29, 2020 [6 favorites]