starting a small business

   / starting a small business #1  
O

oceaneering

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Joined
Sep 6, 2006
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Anybody feel like sharing a little info on starting a small business and running a small business. On another thread we were discussing tax issues and it seems a few questions came up about resources to help get a small operation off the ground. Where do you go to get started. When you first decide to start a small business, (in my case it will be some form of construction, carpentry, ect..) where do you go. Do you register online for a business liscence or go to my local sba. Is it exspenssive. I see a lot of people form a LLC to protect them from liability. Does this protect them as an idividual from total liability or just debt from the business.
sole p, partnership, and corp seem to be types of a business the LLC is its own type but can be looked at as anyone of the three depending on certain criteria. at least for tax purposes. Is this acurate.
When it comes to a corps, what does S Copr, and C Corp mean.
Its says a husband or wife can run a business as a sole p. and the spouse can be an employee. Why is this better than a partnership with your spouse. Or worse.
Let me ask you for example. can a husband run a business as a sole p. Pay his wife a salary. That salary would be a exspense of the business. And then have the couple file married and single so her portion of the money can fall in a low tax braket. Would this be realistic, legal, worthwhile. What is married filing single anyway is that mean seperated.
Anyway that's enough questions for now. I look forward to your responses
Thanks Oceaneer.
 
   / starting a small business #2  
A few years ago I got a wild hire to start a business, so I went to the state's Secretary of State (Texas) web page called TXSOS. That was great, I was able to select a name, search for other similar names, and see if the name I wanted was taken. That was $35 for the name registration. Once had the name I registered the business name and paid $200 and now I was an LLC. The next step would have been to go to the tax office for Tax number, but I did not go any further. This site gave a choice of LLC, LLP, and others I can't recall.

Watch out for making family members company officers. I have a cousin that was listed as VP for his father's co. When he was 16 the IRS sent him a bill for back taxes in excess of $100,000. Officers are liable on taxes should something go wrong.
 
   / starting a small business #4  
MadReferee said:
Regarding LLC's, here are some links that might help. They also have pointers to several other links that may be usefull.

Forming an LLC

How LLC's work

Choosing between an LLC and a Corporation
Click to expand...

Very helpful. It looks like I cannot form an LLC here in Massachusetts without a second willing participant in my new business, limiting me to an "S" corporation only (unless I want to submit to double taxation). Is that still true? Or is that information out of date?

Anyone else here from the People's Republic of Taxachusetts???

Dougster
 
   / starting a small business
  • Thread Starter
#5  
CharlieTR said:
A few years ago I got a wild hire to start a business, so I went to the state's Secretary of State (Texas) web page called TXSOS. That was great, I was able to select a name, search for other similar names, and see if the name I wanted was taken. That was $35 for the name registration. Once had the name I registered the business name and paid $200 and now I was an LLC. The next step would have been to go to the tax office for Tax number, but I did not go any further. This site gave a choice of LLC, LLP, and others I can't recall.

Watch out for making family members company officers. I have a cousin that was listed as VP for his father's co. When he was 16 the IRS sent him a bill for back taxes in excess of $100,000. Officers are liable on taxes should something go wrong.
Click to expand...

That's an interesting post charlie. Maybe I will start a business up in my sons name, file whatever deductions I want and let the IRS bill him. He's 9 he needs to learn what responsibility is.
Of course i'm just kidding.--- I would really use my daughter she's 2,( less likely to be found competent to stand trial).
Why did you not get your tax id# and start a business.
 
   / starting a small business #6  
These are the questions that really helps if you have a good business team around you that can answer these things.

While the info on TBN is excellent, and primarily accurate, I would only venture into something like this with competent local help.

For us, a good CPA is the base. For many it is their Banker. We try not to use the banker so much..... But they are important to have in your corner. LLC, Inc, Sole Proprietership,,,, those are things you need to look long and hard at and make sure that you understand the ramifications that go with each. (and the long term reporting requirements)

Check with your local SBA, sometimes they have counseling services available. SCORE, service core of retired executives can be a real asset. Although, just like anything else, sometimes you get great ones that are a great fit, and sometimes they just suck.

Check with your local colleges and see what they have available.

There are numerous books out there not to mention all the magazines.

If you can get an experienced Mentor that will work with you that is one of the best things. Maybe a guy 2 towns over that you will not compete with but is willing to share, or I had a guy that I grew up around and he operated a very large commercial woodworking shop when I was starting out and he helped us out considerably. Again, the right fit is important.

Many folks hire business consultants, we have been down that road a time or two, again, like so many other things, find the one that fits and it can be a great deal.

Our CPA helps us keep all our licenses straight, keeps us straight with city and county and state and federal taxes. As well as keeping our multi state taxes straight when it applied to us. Acts as a general business consultant as we look at things (after all, he is a small business himself) and really helps me to put things into black and white perspective at times when we look at the different options. Just for example...

Say you get an influx of work, more then you can handle at the moment.

Do you
Hire an employee?
Hire a subcontractor?
subcontract out the work?
Buy bigger equipment to do this job?
Pay someone under the table to work for you to get through this?

A good CPA can walk you through these options and more, and point out the pro's and con's of each, then you have to decide what to go with.

Oh, and I keep talking about CPA's, just like the other things, you have to find that one that fit's you and your situation.

I do not want the CPA firm with the big name, staff of hundreds, large advertising budget etc.

I have the guy that is in his mid 50's, operating in his hometown, out of a remodeled house, has another accountant and sometimes another CPA working with him and an office staff of a couple of folks, reasonably priced,,,,

That I can call up and say, hey Dan,,,, I am thinking of................ does that sound reasonable? And we will have a conversation and he will give me some guidance without clicking the clock over and billing me in 5 minute increments. Just as he calls us and say's can you guys look at this tree and give me some options for a flower bed and a wall for out front.

Good luck
 
   / starting a small business
  • Thread Starter
#7  
AlanB said:
These are the questions that really helps if you have a good business team around you that can answer these things.

While the info on TBN is excellent, and primarily accurate, I would only venture into something like this with competent local help.

For us, a good CPA is the base. For many it is their Banker. We try not to use the banker so much..... But they are important to have in your corner. LLC, Inc, Sole Proprietership,,,, those are things you need to look long and hard at and make sure that you understand the ramifications that go with each. (and the long term reporting requirements)

Check with your local SBA, sometimes they have counseling services available. SCORE, service core of retired executives can be a real asset. Although, just like anything else, sometimes you get great ones that are a great fit, and sometimes they just suck.

Check with your local colleges and see what they have available.

There are numerous books out there not to mention all the magazines.

If you can get an experienced Mentor that will work with you that is one of the best things. Maybe a guy 2 towns over that you will not compete with but is willing to share, or I had a guy that I grew up around and he operated a very large commercial woodworking shop when I was starting out and he helped us out considerably. Again, the right fit is important.

Many folks hire business consultants, we have been down that road a time or two, again, like so many other things, find the one that fits and it can be a great deal.

Our CPA helps us keep all our licenses straight, keeps us straight with city and county and state and federal taxes. As well as keeping our multi state taxes straight when it applied to us. Acts as a general business consultant as we look at things (after all, he is a small business himself) and really helps me to put things into black and white perspective at times when we look at the different options. Just for example...

Say you get an influx of work, more then you can handle at the moment.

Do you
Hire an employee?
Hire a subcontractor?
subcontract out the work?
Buy bigger equipment to do this job?
Pay someone under the table to work for you to get through this?

A good CPA can walk you through these options and more, and point out the pro's and con's of each, then you have to decide what to go with.

Oh, and I keep talking about CPA's, just like the other things, you have to find that one that fit's you and your situation.

I do not want the CPA firm with the big name, staff of hundreds, large advertising budget etc.

I have the guy that is in his mid 50's, operating in his hometown, out of a remodeled house, has another accountant and sometimes another CPA working with him and an office staff of a couple of folks, reasonably priced,,,,

That I can call up and say, hey Dan,,,, I am thinking of................ does that sound reasonable? And we will have a conversation and he will give me some guidance without clicking the clock over and billing me in 5 minute increments. Just as he calls us and say's can you guys look at this tree and give me some options for a flower bed and a wall for out front.

Good luck
Click to expand...

That's good advice and I can't wait to go get started talking to a cpa, developing a friendship, like your describing and saving money. And I learned so much about the taxs thread that now I know what questions to ask them. Or at least I have some ideas of what I would like to achieve. I get my taxes filled every year at the same place. I don't know if they are a cpa or a tax preparer. Never considered it. I have asked questions in the past and didn't understand the answers. I mean they told me it was just over my head. Now I have a better idea of what they will be talking about. That and I;m one of those people who just learn more from a person who can break the truth down. I get caught up with all the jargon. So thanks for the replies and insights.
 
   / starting a small business #8  
 
   / starting a small business #9  
Well, I guess I would say, if your present place left you feeling like that, then it is not the right place. To me, it is their job to explain it too me in terms I understand. I would find another place that was a better fit. Our guy gives me whatever service I need. At one point that was full explanations, and laying it out by the numbers.... I think last year the wife brought home the tax paperwork with a sticky SIGN HERE arrow on it................. That was the only question I had at the moment :)

And Mike 120 brought up another biggie that I forgot about (and god knows I wish I could forget them) but a good insurance agent is very important.

I personally wish I could have 1, but so far, I have never found the place that handled all my needs. I have it narrowed too 2, cars, house, etc. etc. with one. Business Liability and Biz equipment with another.

While from my viewpoint insurance is insurance, they looked at those different needs as very different items. Kind of like my mom would say Car parts,,,,, but you would want to know if you are taking it too a Xmsn shop or an engine rebuild house.
 
   / starting a small business #10  
Dougster...i think you are mistaken.
Limited Liability Company Information

Limited liability companies are unincorporated organizations having one or more members formed by compliance with M.G.L. Chapter 156C. Generally members are not personally liable for the debts, obligations or liabilities of the LLC. If formed properly LLCs will be treated as partnerships for federal and state tax purposes.
 
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