This article will cover the legal issues and foundational aspects that you should have set in place when you are starting a CPR training business. If you have an existing business, these are things you should consider doing if you haven’t already. This will help you to be more informed and be better able to run a successful CPR training business.
CPR Training Legal Considerations
There are a lot of them. Nothing huge, but there are several basic things that are important for you to do to ensure your business is staying above board so you don’t get yourself in trouble.
Get an EIN number.
Similar to a social security number, an Employee Identification Number is a federal ID number for your company. This is important to have in order to effectively create an entity for your business for tax and other legal purposes. It creates a separation between your personal liability/finances and that of your business. This is free to set up online.
Apply for a business license.
It’s usually very inexpensive – business licenses can range anywhere from $10 to $100. If you live in a city, you may have to apply for both a city and a county license. Contact your local city/county business office, they can help you determine what license(s) you need for your area. You will need your EIN number when you fill out the paperwork.
Get a business checking account.
Much like a personal checking account, this is free to set up with your local bank. It is important for separating out your personal finances from your business finances. This is necessary to get a clear picture of your business income and expenses, so you can begin to get a feel for tracking the numbers and increasing/decreasing trends of your business so you can adjust your spending accordingly. It is important also for getting into the habit of making financial decisions early on with regards to the financial outlook of your business.
This also helps you consistently track the financials of your business right from the get go. Not only is this simply good business practice and keeps you above board with the IRS; but down the road, if you want to eventually sell your company, you need to have very good accounting books to show any potential buyers or other interested parties.
You may be asking yourself, “But I’m just starting out. Why should I be concerned with selling my company at some far-off point in the future, if I do at all?” The reality is, you need to be making good decisions NOW because it takes time to build a successful company, and if you don’t lay that foundation properly from the very beginning, you may have to make time-consuming and often costly adjustments down the road when it comes to keeping the books and everything else in good order. Every successful business has a long-term plan or goal, and your business should be no different.
Get a business debit/credit card.
This is similar to the concept of why you should have a separate business checking account. All purchases made on this card should be for the exclusive purpose of your business. Your business expenses only should go on this card – do not mix it up with your personal expenses.
There are some popular business insurance providers out there. Do some research and talk to other CPR instructors/business owners to find out who they’re using. My recommendation is to not check out just one insurance provider. Shop around to several (at least 3-4) so you can get a full-picture view of what’s available. Do an in-depth comparison of insurance premiums as well as all of their policy details; what’s included and what’s not – in order to make an apples-to apples comparison, so that you can make an informed decision. Don’t automatically settle for the lowest insurance premium until you take a hard look at what’s included. You want to choose the best insurance policy that works for your business.
Better yet, find an insurance broker. Tell them about your business and what you are looking for in regards to your insurance needs. They will not only help educate you on what sort of coverage you need, they will also do the heavy leg work and shop insurance policies for you, then present you with the best possible policy for your business. Keep in mind that the best policy for you may not always be the cheapest. This broker service is at no cost to you; they make their commission off the insurance provider that sells them (you) the policy.
Consider the Taxes Involved.
You don’t want to run your business only to find out later on that you are subject to taxes you didn’t know about from the beginning. Some of the taxes you will be faced with may be:
- Property taxes where your business is housed.
- Sales and use tax – if you sell anything tangible product such as books, or pocket masks, or AEDs – all of that is subject to sales tax. You will be collecting these taxes from your customers during the sale of goods, then paying that tax to the state (in most states). Check with your state, you will need to register with the Department of Revenue to get a Sales and Use Tax number so you can begin reporting that income and paying those taxes. Generally, services are not taxed, BUT, there are some areas around the country where they are. You will need to check with your Dept. of Revenue to find out if the area where you will be providing CPR training is considered a taxable service.
- Franchise and Excise Tax – If your company is an LLC, you will likely have to pay a franchise and excise tax. There are many upsides to registering your company as an LLC, but one of the main downsides is that you will have to pay this tax at the end of the year. You should always budget for this.
We hope that this information was helpful for you. Check out our corresponding video and other great material to help your CPR business be as successful as it can be!