Advice: Tips and warnings for aspiring entrepreneurs

Dear Karen: I’m in information technology, but I want to start a pruning service. Do you have any suggestions?

Answer: Start by proving your concept: Is there a need for such a service? How much could you charge? What kind of hourly return is possible? Before you invest money, talk to local homeowners about this idea and write a simple business plan.

Larry Cox, associate professor of entrepreneurship at Pepperdine University, warned that as a business owner you may work longer hours for less money. Entrepreneurs “frequently fail to consider the fact that they, as the owner, must also be the head bookkeeper, the entire sales force and the overnight janitor. They wake up to find that the business they started is overly dependent on them. They are now chained to its day-to-day operations and unable to scale up to a larger, more profitable size,” he said.

• How late can an IRS audit be?

Dear Karen: What is the statute of limitations on auditing tax returns?

Answer: The statute of limitations is generally three years after a return is due or was filed, whichever is later. Most audits take place within two years after a return is filed, unless a major error is found or fraud is suspected.

Even if a substantial error is identified, the IRS generally will not go back more than six years in an audit. Check the audit FAQ on the IRS website, https://www.irs.gov, for more information.

Small-business questions? Email Karen at smallbiz@latimes.com.