CnoteChris wrote
Everyone likes to be respected. They like to make a difference in someone elses life. They like to see someone they mentor succeed because in an indirect way they succeed.
True. But if you want to be big, you need to think big.
Go to a lawyer. Find a commercial that gives free consults. He will advise you whether you should or not.
In most states you can do it yourself, but it seems like you have a lot more questions. You might not have to or want to. And the lawyer can give you any referrals that you might need such as insurance companies, accountants etc.
If you’re in doubt, see another one who gives free consults. This is the best way, otherwise you’ll end up with a lot of unanswered questions.
Sorry, I meant find one in the yellow pages. They’ll have listing for commercial ones who does incorporations etc.
BTW, if you incorporate you’ll have to satisfy certain administrative requirements every year (keep minutes, appoint officers, distribute shares) which you may not understand unless you see a lawyer.
Toadspittle-
Bingo! Limited Liability. As soon as I read that sentence, I knew I had been told to do that myself, as a first step, by someone, sometime ago. Thanks for jarring my memory. That sounds like what I’d want to do, at least for now.
Is that something you can set up on your own? How? If not, do I need an accountant? Or a lawyer?
A little off topic-
Really? To begin with, how big of an ad did they make you take out? If you really have to take one out, why not take out a small classified? Furthermore, if these LLC’s are so popular, how come I never see the notices in my paper? Are you in a special circumstances business? Is that even a sentence?
Contracts. You might think I’m stupid, but I never even thought to have someone sign something before I started to work. Up until now, it’s all been, how should I put this, umm… under the table. A no paperwork kinda deal.
Thanks for that bit of advice. I’ll use that when I start to tighten this thing up.
bare-
The only person who I know who has a business started it by getting some serious inside help through their family members. Read- they got a boat-load of start-up cash and operating costs. So much so, in my opinion, that the business had no option but to make some money down the road.
Since mine wouldn’t be anything like his, the advice that he gives me has limited value. I can’t hire tons of people to tell me what to do and how to do it. I need to try, and that’s the key word, try to figure it out given what I have to work with.
Everyone else-
I suppose a mentor would feel good telling others how they got their start. It’s probably an ego thing mixed with a sense of helping someone out who’s starting out the same way they did. But how do you find the ones that started the way you’d be starting. That is, limited knowledge, limited cash?
Exactly. I may fail, but if I don’t, I wanna be big. Sometime, someway, it’s going to happen.
Again, thanks one and all for your input and suggestions. Every little bit helps.
http://www.incorporate.com can set you up with a corporation or LLC. It’s cheap and easy to set up. But again, I don’t think that’s really as important as you think. And it’ll be a pain to maintain with paperwork and crap.
As far as mentors go, there isn’t really a formal relationship. It isn’t something where you sign a mentor contract or something. You’re asking people here who’ve done this and you’re getting some mentoring. Just go find people who’ve done this and get their occasional opinion. Where? Find community gatherings of IT folks. Ask at local colleges. Look in your local paper. Ask friends you know.
Yer makin’ this too hard Cnote.
Mentors are not hard to find and you don’t need someone in your particular line of interest. Anyone who has started a business from the bottom up can help you to avoid pitfalls.
In a sense, you already have found mentors, simply by asking your original question here. Look at all the advice you’ve received.
For example, when I fist went into business I saw a need that was not fulfilled locally. I wanted to offer that service at a very reasonable cost. This particular business is 75% service and 25% merchandise and parts. I thought that I should be ok charging cost of goods sold plus 10%. After a year, I realized I wasn’t making any money. While watching the owner of a saw shop fix my saw I realized that he was essentially in the same business I was, service along with some merchandise. I just started asking him questions and picking his brain. My problem was that 10% markup. He explained that in order to come out you need to charge a 30% markup on most large items and an enormous markup on small parts, if you pay a nickel for it, charge 95 cents for it.
I thought it was a rip-off, but until I started following his advice I never came out.
I still don’t necessarily think you need to incorporate at first. Corporations don’t absolutely free you of liability. If you are worried that you will screw up, carry more insurance.
Learning to keep books was another area I had to ask for help. It’s tempting to stuff the money you make in a pocket and just take out what you need. While it is possible to operate like that for a while, you’ll regret it the first time you get audited or go to the bank for a loan. I still do my own books but I pay a bookkeeper/taxpreparer to look my stuff over once a year just to see if I’m missing anything or see an easier way for me to go. Even though I pay them for the service, I consider them mentors.
My point is: business is business, yer either making it, selling it or servicing it.
I’ve often wondered that we don’t teach people how to start and maintain a business in high school.
All good advice so far, but the way it’s been presented sounds like you might be running around all day trying to coordinate. How about if you could get all the info and help you need in one place? Try The National Association for the Self Employed. Yes, I do work for them, and if you lived near the Mid-Atlantic, I’d be happy to help you myself, I am a small business benefits consultant, after all. NASE offers a package of over 120 business and personal benefits for the small businessman or woman. You get access to professional small business consultants, legal help, business supplies and services at a greatly reduced rate, health insurance generally cheeper than going on your own, and lots of other stuff. I’ll go you one further. Goto my NASE website and enter pin # 1834 to get to my page, and enter your name and number. I’d be glad to call and help you out, or even get you hooked up with a rep in your local area. NASE is a non-proffit organization tht has been around for the last 20 years, and with the exception of the NFIB( which just lobbies Congress), the largest organization of small businesses in the country.
(links fixed - Jill)
[Edited by JillGat on 04-29-2001 at 12:02 PM]
I’ll second that, I still pull it off the shelve from time to time.
You have some great advice so far I agree with most of it and will just add you never know until you try so come on in!
Weirddave-
Thanks, and Thanks! I’m only here for a moment right now, but I’ll take a look at those links later on tonight.
waxteeth-
A second vote for “Small Time Operator”. Got it.
For a LLC you need a partner, but it looks like you’re going it alone.
Looks like I should check in more often. I’m a small businessperson in Minnesota (we’ve got 2 pawnshops now), and here are a few of my thoughts:
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How ya gonna live? Most businesses lose money for the first couple of years, and you should plan your finances accordingly. If it was me, I’d work “under the counter” for a little longer, paying off short-term debts, etc. Depends on how your duel with the banks goes, but I wouldn’t expect a whole lot of start up money from THEM without putting up some hefty collateral (your house?). I’d advise against putting up personal collateral (house, car) to finance business debt, just in case… You may end up working a second job just to make ends meet…
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Got anything to lose? If you really don’t own anything, I guess I wouldn’t worry about getting sued. Nobody’s going to sue you for your household goods if you’ve got nothing else, so asset protection may not be as big a deal as you thought. In any case, you can buy business insurance cheaply enough–mine costs $600/yr for $75,000 in inventory, and that covers all sorts of stuff besides getting sued. You can also buy prepaid legal insurance for about $18 per month. This gives you 30 free hours of in-court legal representation per year (more in following years) in case you get sued.
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Sole proprietorship is the easy way to file for the first coupla years (especially if you’re losing $$$), but once you start to make a profit, look out. Whatever money your business “makes” (which includes inventory that’s been sitting around for six months) gets taxed at your personal rate. If you’re working a side job, trying to make ends meet, and make, say, $15,000 at it, then add your business “profits”, which may be tied up and inaccessible, then your self-employment tax of (forget what it is, exactly, but it’s double your normal SS tax–12 to 15 percent), you can easily end up paying huge taxes. C Corps, on the other hand, pay only 14 percent tax on amounts up to $50,000. You don’t have to pay yourself anything, really, to derive benefits from owning your own corp.
Email me and I’ll send you my phone # if you want to chat.
You can do it yourself. I did. But a lawyer might be able to do it quicker and easier (i.e., they esp. might know what offices to contact in your home state).
How: varies by state (and as I mentioned, many states don’t allow you to form an LLC with only one partner). There are forms to fill out, specific ways to publish notices, etc. Hence:
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In NYState, the racket is this: you have to publish a legal notice in two local newspapers designated by the county clerk once a week for six consecutive weeks. I was told to publish the essential points of my Articles of Organization in New York Newsday (Long Island’s big daily paper) and a crappy free community weekly whose name I don’t recall offhand. I’m convinced that the weekly, and other papers like it, subsist on such legal notices. They charged twice what Newsday did.
New York’s Dept. of State has a pretty good brochure on starting an LLC (which, incidentally, they didn’t have 3 years ago…bastards…). It’s specific to NY, not your state, but it gives a pretty good idea of what’s generally involved and why you might want to do it:
Again, I really appreciate your input and suggestions in this thread. It reafirms my belief that this is one of the coolest sites on the net. Not only is it damn funny most of the time, but it can be informative as hell.
With that said-
I still haven’t had a chance to check out all the sites mentioned here so far. I’ll be doing that later on tonight and in the upcoming days. I’ve been a bit busy lately and am somewhat nervous that the answers I’ll find out are far from what I’d like to hear. But I’ll do it just the same. I might also take some of you up on your offers as well.
Again, thanks. Check back in a few days, or over the weekend, and I’ll post what I’ve found/learned.