Business Questions for you business owners!

[AKLGT]

Well, I think it is now time for me to make the plunge and move over from my current position as a direct Account Executive (outside sales) to my own business as an Authorized Reseller. It will enable me to not only make more money doing the same (almost) thing I have been for the past 16 mos, but also allow me to sell more products and services to my customers. Not only that, I can also turn my enjoyment/hobby of cars into some money by providing whatever i might decide. It will fit with not only my interests and passions, but what I've enjoyed about my job so far. I/we will be making an LLC vs a corporation or partnership/sole proprietor. My website will be updated and done right (not it's current thrown together status), design work and logo's made, etc. So, I am hoping anyone with wisdom of what to look for or watch out for in opening up a new business or even branching out on one's own can share with me is appreciated.

[AKLGT]

ok then... guess there are no business minded people on this forum anymore.

[KNINE]

Sorry, I'm just a slave to the man. My ex used to have her own graphics arts business, so I have an understanding as to how much work it takes. All I can say is don't let it interfere with your marriage. Good luck!

[NaNC3]

I would recommend joining and participating in your chamber of commerce. Mine is good for networking and also learning. I meet potential clients, people who may know potential clients for me in the future, and other business owners to learn from and with.Also check your library for books on the legal and accounting issues, and also ideas for sales and marketing.

[AKLGT]

i plan to join the chamber. networking has been my main source of income right now. i am/have been involved in many groups, both work and pleasure that have been very fruitful. for any of you guys that are in sales or have your own businesses, i would strongly/greatly recommend looking into a local Business Network International chapter if there is one. http://www.bni.com. This has been the most successful networking group out there! I can attitribute a lot of my success to them as well as to my (i know... gasp!) NASIOC Subaru chapter here in AK. Those guys have been an awesome source of referrals, customers, etc. Our SCCA Solo II racing also has been pretty successful I believe, so I'm looking forward to this next season when I can really promote myself, perhaps even be able to sponsor the regional chapter a little (depending on how well i can do these next few months). I go see my tax girl this morning to set up the EIN and figure out how to do all the taxes, what's the best way to pay employees, etc.

[jimincalif]

Congratulations and good luck. Starting, growing and running your own business can be very rewarding, and extremely challenging. My partner and I started ours 23 years ago.Most important thing is sales and marketing. How are you going to get business? Since you are in sales, you already understand this aspect.An LLC is a good form of business to select, and AK has good laws WRT LLCs and creditor protection. You also have to elect how the LLC will be taxed. Very common to elect taxation as a partnership, however I am seeing more electing to be taxed as an S corporation over a partnership. In a partnership your income flows thru to you subject to self employment tax 15.3% of the first $97,500, 2.9% on the rest, plus regular income taxes. With the S corp election, your wages (up to 97,500) are subject to FICA/Medi tax of 15.3%, then 2.9% thereafter. But you don't have to take all company profits as wages, the rest pass thru to you via the S election and you pay income tax, but no SE/FICA/Medi tax. If you are a single member LLC for taxes it can be disregarded and you file just like a sole proprietor with a Schedule C on your 1040.Do a budget, with both pessimistic (low sales high expenses) and realistic (expected sales/expenses) assumptions. Consider how much cash you need and where it will come from.Be sure you understand working capital. Cash in the bank, credit lines, terms from vendors are all sources of working capital. Inventory, payment terms for customers, slow paying customers all consume working capital. Be sure you can finance your sales.Do not get over-extended financially. When you have good times put money away for the bad times. Are you going to hire employees? If yes, be sure you comply with applicable laws to provide workers comp insurance, payroll taxes, etc. If you bring in a partner be sure you have a buy-sell agreement. DON'T EVER BE LATE PAYING PAYROLL TAXES TO THE IRS. Penalties add up fast and they take their required tribute very seriously.Make sure you have your own health insurance covered, not a good idea to be bare.Other insurance, have appropriate liability insurance. Life and especially disability insurance are good, but can come later when you are actually making money. Save for retirement. Maybe not your first year, but when you start making money, put some away every year. Get good advice, there is a firm in downtown Anchorage I know when you are ready for this.Assuming you succeed and grow, realize you cannot do it all and know it all. Hire good people and pay them what they are worth. My partner and I had to pay six figures to bring in a strong manager, but since that time our own incomes have doubled.Look for an entrepreneurial network group to join where you can share problems, ideas and solutions.As your business grows, look at it as an asset that should achieve a risk-adjusted return on investment and budget for that return in addition to what you pay yourself. Consider how to create value in the business. Unique products, branding, recurring revenue streams - all these add value to the business, which ideally you could realize at some point by selling the business.

[kostby]

Don't overlook special opportunities for minority and women-owned businesses. There may be a statewide group in Alaska. (In Indiana it was the IN Regional Minority Supplier Development Council serveral years ago.) Many government contracts and large corporations have contract requirements with regard to participation of minority and women-owned businesses. It was often low-profit-margin business, but if you have an edge, why not exploit it?Good luck!

[GMJAP]

Cost effective incorporation. Worked out for me:http://www.legalzoom.com/I formed an LLC but elected to be taxed as an S-corp. I got a lot of advice recommending forming an S-corp, but this seemed to be the best of both worlds (ease of LLC maintenance, S-corp tax advantages.)You might need a Seller's Permit too.

[AKLGT]

i used to be part of the women's business network. I should look into doing that again.obviously, the thing abuot moving over to my own business is that i will continue doing what i've been doing, but making more. I will now be able to sell and resell other products vs before having to do it as referral sales (even though I was making the sale for someone else). My plan is to start off employees as 1099 independant contractors until i can have 4 or more employees/contractors to then move them over as employees. A good friend of mine, whom I'll be meeting with in the next 10-15 mins has an employer services business who will help me with the workers comp, employee benefits, payroll, hire/fire, etc. i'd like to offer basic benefits package for my employees as i do not want high turn over. it costs me way too much time and money to train someone. I have over 8 yrs in outside sales experience along with over 4-5 yrs in banking and merchant services experience. By moving over to our indirect sales team, I will now receive marketing money and co-op funds that I never had before. I'm pretty excited about this really. I have so much more potential. and jim, we'll be filing as a partnership and not an S-corp. Sat down w/ my tax people and we've already worked out a lot of the details.

[jimincalif]

Quote, originally posted by AKLGT »My plan is to start off employees as 1099 independant contractors until i can have 4 or more employees/contractors to then move them over as employees.Just be sure you review this with your tax people. There are specific IRS tests regarding IC vs Employee status, and they take this very seriously. You don't want to get hit with a reclassification and get zapped for withholding penaties, etc.Quote, originally posted by AKLGT »A good friend of mine, whom I'll be meeting with in the next 10-15 mins has an employer services business who will help me with the workers comp, employee benefits, payroll, hire/fire, etc. Good, using a company to provide these services is a good option for a small business. They can usually give you some advice in terms of appropriate benefits in your market.Quote, originally posted by AKLGT »i'd like to offer basic benefits package for my employees as i do not want high turn over. it costs me way too much time and money to train someone. Good and agree turnover is expensive. But don't make the mistake of hanging on to someone who is not a fit. There are lots of resources to guide you in finding the right people to hire. Again your friend with the service business may be a resource here.Quote, originally posted by AKLGT »I'm pretty excited about this really. I have so much more potential. That's great, you should be excited, it is an exciting time. As part of our business we've partnered with others in our industry to create another firm that provides services to our firms. And I am about to go to a conference a propose another type of startup with another group. Starting something new is exciting, thinking about the potential things you can do.Quote, originally posted by AKLGT »and jim, we'll be filing as a partnership and not an S-corp. Sat down w/ my tax people and we've already worked out a lot of the details. Sounds good. Keep a list handy where you can make a note of things you think about, your mind will be going a mile a minute at times. Also, be sure to always read the business section of the newspaper. I don't know how good the Anchorage Daily News is for business, might want to subscribe to the Wall Street Journal. Not that you will read everything there, but it is just another perspective that you need. Once you get going, be sure to allow yourself some thinking time away from the daily activities.

[AKLGT]

ha ha! you have no idea how crazy my mind is right now. it's just going like crazy!but yes, there are some things i need to do and really think about. had a great meeting with my friend, so i'm leaning towards just having them do this from the start... it will pay itself off in the long run by having it done correctly without worry of me not doing something and getting nailed with fines or penalties.

[Atomic]

Having just gone the opposite direction that you are heading, I can say you are in for a good dose of everything.The joy of having your own company, and being able to set rules and procedures to your liking is a positive, if you are inclined that way.The benefits usually outweigh the negatives when times are good.When things get slow or there is a downturn, then the real stress begins.You could go with a sole proprietorship, or even a numbered corporation, I don't know how the business laws are set up in the US.As mentioned in previous posts, check out the assistance for minority and women owned businesses, there should be a huge amount of info on everything you can think of, and a bunch of stuff you haven't.In my opinion, the more you can do yourself, without getting lawyers and accountants involved too heavily, the simpler things can be at first.As you grow, take advice cautiously from business acquaintances and friends who may have knowledge in these areas.Good Luck!And remember you need to take some time EVERY day just for yourself, to just NOT think about work related anything. Go for a 10 minute walk, I hear you have great scenery in that part of the world. Don't take it for granted. The work will still be there when you get back.

[AKLGT]

well, luckily i have quite a few business contacts and good friends that help me out with things like the taxes and such. My good friend helped me set up the LLC, business licence, tax ID and move my old 401K plan to her business. This was all done at no charge to me. She is full of knowledge, as well as her mother, whom I've known throughout high school. I will pay them for their work at tax time, but i will say i get a little better rate than most others. as for the human resources and employer services, this is a good friend, the one who will be helping me do my STI swap later this month, and his brother's business. They both agree this will be a great fit for my needs. They are also a great wealth of knowledge and insight, letting me know if I can do some things on my own to keep costs down, or where I may need to consider having them take care of for my own protection. They are helping me do a lot of the employer/labor research so I don't get myself into a lot of trouble. My current General Manager is helping me work up some ideas on compensation plans for employees, marketing ideas, ways to extend myself for not too much money or no cost to myself. We have a major sponsorship with the new Arena Football team that I set up and that will continue to be my account. Their flag football teams (10 total) will be starting end of this month. We are sponsoring one of the teams and I will be there to represent Clearwire. I am allowed to have an employee/contractor (haven't quite decided which to have just yet) at their mall kiosk to be the "clearwire" representative.Today, while getting more gas in the car, the guy across from me asks me questions about not only my current services, but also Dishnetwork and wants to set up. I give him my card and tell him to call me in the next few days. I set up another customer tonight that wants to set up their Dishnetwork services next week. I don't know if i'll have a direct contract by then, but worst case scenario, I will forward that to the gentleman I've been working with. He won't be happy when I tell him I'm moving over as his competition. He'll just have to deal with it! LOLBusiness is already picking up, i've got a big list of things to do!