You have two separate issues to face the first is bookkeeping/accounting. At various times I have done my accounting/bookeeping as follows:
1)Paid everything by check and keep a ledger of money received. Turned it over to an accountant/tax preparer at the end of the year.
2)Did it myself using Quick Books. Turned it over to an accountant/tax preparer at the end of the year.
3)Hired an outside accountant to do month profit lose statements and they did taxes at end of the year.
This is about it as far as options are concerned other than being a do it yourselfer and doing your own taxes. Ofcourse, you could resort to the shoe box method (throw it all in a shoe box and take it to someone to sort out at the end of the year). I have not done my own taxes since I set up a corporation in 1993. I did do my own taxes for years before that. What you do depends upon what you can afford, what you know, what you want to do, and how much time you have to do it. Do keep in mind that it is much easier to secure bank loans with information prepared by an accountant.
The second issue is payroll and tax filings. The tax filings will include Federal 941 (withholdings) and 940 (unemployment) and state filings: sales tax, withholding taxes, unemployment taxes, local taxes, and perhaps tire fees. Payroll and the tax filings I have handled various ways:
1)Did them all myself calculating them with excel spread sheets and writing all checks.
2)Hired outside bookkeeper to prepare all the above.
3)Entering all payroll information and using on-line service to process payroll and pay taxes.
If you will go to bi-weekly payroll you can do the internet one through netpaysolutions.com for about $75 per month. I am currently using our bank (Regions Bank) which offers an on-line payroll/tax service with a little more work involved but it only costs me $40 per month.
The thing to keep in mind is the more stuff like this you take onto youself the less time you have to devote to either the things you enjoy or things you are really good out. Working 12 hours in the shop and then coming home and doing bookkeeping is a forumla for burnout. If you shop around you can probably get someone who will do everything you need for somewhere between $250-$300 per month if you won't monthly account and payroll. At least I can in this market. Like I said you can get payroll for about $75 per month.