establishing your own company
DESCRIPTION
Key considerations for starting your own businessTRANSCRIPT
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ESTABLISHING YOUR OWN COMPANY
IMPORTANT CONSIDERATIONS FOR THE SOLOPRENEUR
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Establishing your own Company
Guidelines for the solopreneur
Purpose of the company:
Operate as a Workforce of One (i.e. Freelancer,
Consultant, Sole Practitioner, Independent Contractor)
Key aspects of establishing & running your own
company
How to be in business for yourself, not by yourself
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Becoming a Company of One
LLC IS THE PREFERRED BUSINESS STRUCTURE
Designed to provide the limited liability features of a
corporation and the tax efficiencies and operational
flexibility of a partnership
Easy to maintain. Annual meetings and minutes, not
required, although recommended
Pass-through taxation. File a Schedule C at year-end
Professional status, operating under a secure legal structure
If maintained correctly, LLC reflects compliance
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S Corp LLC
Limits owner liability for business debts & obligations X X
Company name protected by registration process X X
Company can have an unlimited term of existence X X
No limit to the number of owners X
No citizenship requirements for owners X
May be owned by another business, rather than individuals X
May issue shares of stock to attract investors X
Owners can report business profit and loss on their personal tax returns X X
Not required to hold annual meetings or record meeting minutes X
Benefits of an LLC
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Single Member LLC Tax Advantages
Pass-through taxation
Deductions
Common Deductions for
Businesses
o Start-up costs
o Vehicle
o Home office
o Retirement savings
o Professional fees
o Office equipment & supplies
o Business Travel
o Health insurance premiums
o Marketing Costs
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Legal Considerations
Operating Agreement
Most important document next to Articles of Organization
capital
profits
voting interests
operating rules
state requirements
B2B Relationships
Vendor/Service Agreements
Statements of Work (“S.O.W.”)
Compliance
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Business Banking & Bookkeeping
Separate entity = separate bank account
Set up business bank account for your LLC
Choosing the right bank (local, internet, credit union)
LLC expenses must be kept separate from personal expenses
If personal funds are used for business expenses, LLC can
and should reimburse
If LLC funds are used for personal expenses, LLC should be
reimbursed
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Accurate Bookkeeping Accurate bookkeeping is a must
IRS can impose fines, penalties, and disallow deductions if an
audit confirms poor records or significant mistakes
Should be part of your everyday business routine
Consider outsourcing More time to focus on clients
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Accurate Bookkeeping
Monitor the progress of your business
Prepare your financial statements
Income Statement
Balance Sheet
Identify source of receipts
Keep track of deductible expenses
Prepare your tax returns
Support items reported on tax returns
Source: www.irs.gov
What to Keep?
o sales slips
o paid bills, invoices
o receipts
o deposit slips
o canceled checks
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Tax Responsibilities
Schedule C
Quarterly Estimated Taxes
o April 15th
o June 15th
o September 15th
o January 15th
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IT Considerations
What are your requirements?
Branding your business
Select a domain name and register it
Add an email hosting plan
[email protected] is ok, but
[email protected] is better
Web Hosting plan
Consider paying a Web Designer for
simple 4-5 page site
About, Services, Testimonials, Contact
Do it yourself vs. hiring
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IT ConsiderationsWhat tools do you need (software)?
Cost Considerations
Office, Project, Point of Sale solution, other software
Free (Google Apps, ZoHo) vs. Purchase
Software as a Service vs. Local Copies
Data backup, client files, company docs,
bookkeeping
USB drives are good, but offsite is better
Consider IT hosting services for applications and
data
Prepare for Murphy
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IT Considerations
What type of support do you need?
Small “techie” support businesses got their start in large
organizations
Do you have specialized requirements?
Find IT support that specializes in helping companies like yours
Check references of satisfied customers
What about SLAs? Do you need them?
Vendor size, bigger is not always better
Plenty of help out there. Don’t go it alone
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Liability Insurance
General Liability Insurance
o Coverage for assets and business
o Personal injury, libel and slander
Professional Liability Insurance
o Coverage for lawsuits against the individual
o Malpractice, Errors and Omissions Insurance
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Health Insurance
Myth: Group plans offer discounts
Market for individually underwritten plans is robust
Let your own LLC establish permanent and tailored plans
Indemnity/Defined Benefit Plans can provide excellent first tier
Premiums are tax deductible through the LLC
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Retirement
How do you enhance your retirement savings?
ROTH IRA vs Traditional IRA
Solo 401(k)
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Running Your Back Office
All of this can be described as back office administration and
operational hassles
Most likely it is not what you do best
Referred to as your Back Of The House
You make money by focusing on your Front of the House
Be careful. Running your back office is time consuming, what
is the opportunity cost?
Get professional help; don’t try and do all yourself
Make sure you know what you don’t know and that you know
your options
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The Ultimate Solution
Let BOTH:
Establish your LLC, with a hosted IT platform & website, online
bank account and health & retirement benefits
Provide your own Personal Advisor who will handle your LLC’s
billing, collections, bookkeeping, taxes and assist you with all
your day-to-day admin hassles and operations
1.888.226.8499| www.bothpro.com
BECOMING A COMPANY OF ONE
TURNKEY BUSINESS ESTABLISHMENT. 1-STOP BACK OFFICE SUPPORT.
INTRODUCING BOTH. INDEPENDENCE JUST GOT EASIER