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    Home Unlabelled Created an LLC for my independent consulting contracts - some questions (Mostly around S-Corp). small business

    Created an LLC for my independent consulting contracts - some questions (Mostly around S-Corp). small business

    May 09, 2021

    Created an LLC for my independent consulting contracts - some questions (Mostly around S-Corp). small business

    Created an LLC for my independent consulting contracts - some questions (Mostly around S-Corp).

    Posted: 08 May 2021 05:18 PM PDT

    Hey everyone, thanks for reading! - a little bit of the history:

    I am a full-time employed W-2 worker at <major corporation>. My FT gig doesn't take most of my time, and the WFH switch has opened up a lot of avenues for me to do some other work.

    Started last year (2020), I linked up with an old co-worker of mine who is running his own tech consulting firm, and looking for some extra help. I had a lot of extra time, so I took that on. He hired me as a 1099 and we were off to the races. So now I have self-employment income, and my W-2 income.

    Fast-forward to last month of this year (2021), where another contract actually presented itself, and I had the bandwidth to take it on since the scope of work was pretty small. Now I have 2 contracts as a 1099. I figured I really liked this work, so I should probably just make an LLC to do so.

    I contacted my Tax guy. His firm does a whole bunch of stuff, from tax advisory, preparing, business accounting, payroll, the whole 9. He agreed, yes you should create an LLC, and we should elect for an S corp because self-employment tax is killing you. (I did have a very large tax bill at the end of the year (2020), but had all the money put away for it, so it was quickly paid in full). We got that going, I have my acknowledgement letter from the state, and my EIN. We filled out the S Corp election, and that hasn't come back yet. I have a meeting with my tax guy later in the week, but I have burning questions that I figured I could try here!

    With that background info set, I have the following questions.

    1. We filed the S-Corp election on 4/24 of this year. I have been getting paid as a 1099 this entire time up until literally today. I believe until the S-Corp goes into effect, I'm basically still self-employed, I just have an LLC now for legal liability reasons. Is this a correct assumption?
    2. Would I now be able to switch over my existing contracts to my LLC and EIN? If so, and say theoretically they start paying me through that method - I would still basically be a self-employed until that S-Corp election goes into effect?
    3. I definitely get the whole reasonable compensation/salary thing for S-corps. Its a single member, so its only me. Now, when do I start paying myself? I'm getting a business checking account established within the next few weeks, but that account is going to take time to build before I can even consider beginning to have a reoccurring salary go out for myself, that's both small enough that it won't be impactful to the business account, and large enough for the IRS to not be all upset.
    4. On the topic of salary, what happens when the well runs dry? What kind of flexibility do I have behind that salary? For example, both of my current contracts end, and therefor payment ends. I do not seek any new contracts because now my full time W-2 job takes up all of my time. What happens then?
    submitted by /u/koherence
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    Biden’s ‘American Families Plan’ lets the IRS snoop on your bank accounts

    Posted: 08 May 2021 05:02 PM PDT

    Is public speaking an important skill for you?

    Posted: 08 May 2021 07:18 PM PDT

    Why/why not?

    What approaches have you tried - or would you try - to improve? What are your thoughts/experiences regarding things like Toastmasters (and similar groups), books, coaching, workshops, and (especially) online courses?

    submitted by /u/M-Jones-Bkk
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    Baked potatoe business

    Posted: 08 May 2021 12:18 PM PDT

    Hey guys just wanted to ask if you guys think charging $6.50 (including taxes) for a large baked potatoe with bacon cheese is reasonable at a farmers market?

    submitted by /u/jose_567
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    How to create down-home familiarity in an online shop?

    Posted: 08 May 2021 05:00 PM PDT

    This is the question that I have been asking myself. I am sure many other owners of retail shops, who have moved more into the online world have been thinking about it as well. It all just feels so impersonal in the online space. We can't guide customers though the space showing them the items that we make to best fit their needs. We can't just shoot the shit with them at the counter and ask them how their family is doing. When the customer comes into the online shop they are left to browse some photos, video and text but there is so much that is missing in the experience.

    As a small brand, one of the great advantages that we have is that we can know our customers, remember what they have bought in the past. We can know what their interests are and we can become friends. That's the beauty of it. But that can be quickly lost in the online shopping experience.

    We have done many things to try and open communication with our visitors to the website. One of them has been to include a chat option across our website. But it seems that people don't really use it. It seems like some robot on the other end will be responding and most visitors to the website don't pay any attention.

    Today I filmed and uploaded a welcome video with the hopes landing on our home page will feel a bit more like walking into our brick and mortar. It's just me looking into the camera and letting the visitor know that they are welcome to browse around and to feel free to let me know if they have any questions. The chat feature at the bottom of the page pings directly to my personal phone, so hopefully when visitors are browsing they feel more free to reach out.

    In a time when we are so divided and so far from each other, it feels good to try find ways to connect more. To break down the barriers that technology puts between us and try to use the amazing technology that we have at our fingertips to bring the feeling of walking into your favorite shop back.

    I am more than excited to hear what you are thinking about this, both as consumers and retailers living in an ever digital world.

    submitted by /u/JJLeathersmith
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    I want to start selling fine jewelry. I have some questions for you all.

    Posted: 09 May 2021 03:00 AM PDT

    Hi everyone :)

    I want to open a website selling my jewelry designs (lab diamond). I already have a few suppliers/fabricators I trust who have been making my own personal jewelry for years. They work with many large American companies so they are able to handle volume under tight deadlines (not that I'll need that any time soon...).

    I am wondering if any of you who are more experienced can help me figure out a few things:

    • Do I name products or should I describe them for SEO purposes? For example, if I have a particular ring I want to sell could I market it as the "Nina Ring" (just an example) or is it better to say "split shank solitaire engagement ring"?

    • Should I have manufactured pieces ready to go and ship before opening my website? My suppliers can fabricate jewelry in less than a week.

    • Should I use pictures of real jewelry on my website or very high quality renders? I have already gotten the renders done and they are beautiful and from multiple angles. Alternatively, it would cost about $10,000-$15,000 to fabricate all the designs I currently have on my site.

    • How should I package jewelry and ship it? FedEx? How do I decide what sorts of jewelry boxes and other containers I will use? I love, looooove this box and I can't find anything like it.

    Thank you!

    submitted by /u/dottiethecat
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    1 shares idea with 2: Patents, Idea Theft, NDAs, LLCs, and questions on what to look out for...

    Posted: 09 May 2021 02:45 AM PDT

    Hi Small Biz,

    (long post, questions in middle, tldr at bottom - Presenting this week to interested investors)

    Newbie here but I didn't know who else to ask. My situation is moving very fast and my instincts prompted me to ask experts. I'm sorry if I use the wrong terms or ask basic questions. This is my first step and the business is on the brink of being created. I have two investor presentations next week and they are very interested in my product idea.

    I'm new to this world, but my idea is smart and one-of-a-kind. I believe it will fill a need for women across the world. I know my product inside and out, but I've never gone from idea > business.

    I came up with an idea last Summer and I decided to ask a friend to help and share the idea, so we would look for startup money and make the idea better. I have not patented my idea, or started the business. My friend says that it's expensive. I'm not poor, but not rich. Maybe a little poor. :)

    So, my close friend (Jane 1) shared my idea with her early on).. she brought another friend (Jane 2) along, and she knows the idea too. I haven't met her before, only on FaceTime meetings. They seem to want to share the idea equally between us 3, and for me not to patent it with a lawyer, because they are expensive, and there's no reason to worry since its us three. But I want to be the boss because the idea is mine and I needed somebody to help me prepare for presenting to get the start up money (Jane 1).

    Jane 1 = my long time friend

    Janes 2 = her friend. I have never met her before but Jane 1 says Jane 2 is a business expert and I am lucky to have her.

    I worry that if I get the money for my business, (nothing is official, nothing signed, no business and nobody officially 'hired'), I will make a bad move. This is because Jane 2 and Jane 1 suggested they handle a lot business details because I havent done this! She says she has done it before and she can handle basic stuff like that for investors and how much we need. Jane 1 (my friend) wants to make the three of us the founders or equally responsible for my product idea.

    Then is when I got nervous because they like my idea and it felt like they didn't want me to be the owners/founder/president/CEO. I need to slow it down, because they are assuming a lot and telling me they know more because they have done it. The investor meetings are this week. Jane 1 (close friend) says, "dont worry my friend is so cool, and no lawyers necessary, we know how to do it trust us". And I feel bad for here because im doubting her friend. I know I am stupid for telling my friend but I have never been through this. I've been teaching for 6 years.What should I look out for when my friend (and her friend ) know my idea details? Nothing is is patented, nothing signed, no business or copyright either. And I'm not even sure about how to make the NDA so they sign something to say that they wont steal my idea or take and even 33% of ownership. I don't want to lose my idea, business our money to make it. I'm making them promise not to tell (or take) my idea. I just dont want to be scammed. I want to do this right but I may have made a mistake and I dont want to tell them that they are kicked out. I want to be like the CEO or the President and have a say if this idea works the way I think.

    My Questions:

    • When I receive funding to have my products made / shipped, should I get a patent lawyer and make sure I protect my idea and my ownership of the company?
    • Where does the money go when they give it to you? I want to make sure it is in my control first. Can they somehow take it without me realizing?
    • Who would I talk to protect me before/after I get the money to do it? I guess a lawyer, but what kind? Patent lawyer? Somebody between me and them who really knows how to protect my wishes?
    • How do I approach this subject because it's not an issue yet, but it always could be after the money comes in. People are evil with money.
    • Am I already screwed?

    I don't want to end up giving away ideas, too much ownership or money control to a Jane2,a lady that I don't know. I can say the same for Jane 1, my friend. I believe I should have to hire them first. I'm new to this, but I want to cover myself and hire a manager or advisor or something to be between me and them to ensure I retain control. They are both great but I have to trust my instincts because things are moving fast and I'm not treated as the 'boss' (of course im not. No business yet!) I can do this, but the start is the most important and I'm worried. Maybe just paranoid.

    Thanks so much. If you made it this far, you're great for reading it.

    ​

    TLDR: Shared awesome idea with friend, friend vouches for her friend, tells me to let her help us. I do, but nothing official, no patents, no NDA, no LLC or business, no lawyer but meeting investors this week. I don't know business but they do and tell me not to worry and trust them. My close friend is great and neither of them have really done anything yet, but my friend makes me feel guilty when asking about her friend. And I am maybe overreacting.

    submitted by /u/VeraDrew
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    We Speak Spanish! Except only one person does.

    Posted: 08 May 2021 10:08 AM PDT

    We I speak Spanish!

    I work for a small family business as a manager. Long story short, I wear a lot of hats. I deal with finance, training, tech support, front desk, customer service, computer coding (I don't know shit about that btw), online promotion, and general supervision on top of several other tasks. To tie it all together, my family uses a dinosaur of a program in order to process everything (300 dollars a month just to use the cloud service? Really guys!?) so I'm also moving everything from one system to another. This is a process of pulling teeth that often requires me to come in during closing days and do more work. Obviously I have my plate full.

    My mom (who put this mess together) is proud of her Dominican nationality and loves speaking Spanish over English. Her English is good, and of course there is no shame in speaking multiple languages. It's always a good skill to have, and I am thankful she taught it to me. But even when I speak English (my native tongue) I have trouble with communication. I have autism, and part of it included so many hours of speech therapy just to not sound like an absolute lunatic. Add Spanish into the mix, and I get really nervous.

    Well my mom promotes with every Facebook post that we speak Spanish over the phone. But my mom works as an esthetician on top of an owner. She is very popular, so she spends most of her work hours doing services. Obviously this means she is in no position to answer phone calls. My dad is off the table because his customer service skills are abysmal. He gets so awkward when talking and honestly forgets being 6'5" with a bulky frame and bulldog face can scare the shit out of people (particularly other men). The other employees are standard white bread American. So who is left to speak Spanish?

    Me. And only me.

    This is further complicated by the fact that I'm in a position where I am expected to explain difficult medical procedure to clients that are already a lot to explain in English. It also means whatever I'm doing has to be put on hold to assist other clients. I get that it's hard learning any new language, but sometimes they make jabs at how I speak, one of them even complaining online saying I spoke in broken Spanish despite requesting me to explain it in Spanish. One even said "Wow your Spanish is awful."

    At least one of us actually tried to learn a second language, and I'm disabled.

    I feel overworked, the pressure is immense at best and unrealistic at wost. I'm expected to perfect every tiny thing, most of which I pull off by sacrificing my time off and forcing myself to learn how it works. Because unfortunately my mother is impulsive and makes massive decisions without a process. She wants me to make an ad for a promotion, but has no idea what she even wants to sell at a discount.

    I haven't recieved a raise in the three years I've worked. I haven't even had a vacation where someone hasn't begged me to come in because nobody else speaks Spanish and my mom insists on promoting it. And if we lose the client she goes on a rampage. Employees look to me for stability and security, which is part of my job sure. But I'm only human. And my mom's impulsive behavior means people are scared of being fired for having her come into work in a bad mood.

    I feel burnt out and frustrated. I'm trying to get us on a new system for work because we constantly get calls at home for appointments (thanks mom for posting that everywhere including your business cards. Now we get calls at 1AM). I don't know what to do. I don't know how to get everything to stop. I keep begging for change but they keep digging their heels in the dirt. And the one who pays for it is me. They want to hire a front desk girl, but I know she's going to do a shit job because our current system for processing transactions is ABYSMAL.

    submitted by /u/Ebiki
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    Company where I can print and order clothing from

    Posted: 09 May 2021 02:11 AM PDT

    I want to sell my art on clothes and design clothes that I can sell on a website or Etsy (my own owned one, not like redbubble), but I can't find a good site. I want to have patters on both the arms on the sleeve and the front/back of the top. But I can't find a site that does this? I might be blind, but do you guys have any recommendations for a business like this I can order from to print my designs on appeal? :)

    submitted by /u/Pusagi
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    Forming a Delaware C Corp. How expensive is it?

    Posted: 08 May 2021 10:03 PM PDT

    I'm an American and my cofounder is Canadian. We're looking to form a Delaware C-corp and it will make about $300k~ the first year. It will be spun out of my LLC that I own outright.

    It seems there are a few routes I could go with here:

    Boutique Lawyer Firm

    These guys quoted me $450/hour and will take care of the following:

    • Prepare and File Certificate of Incorporation.
    • Appoint a Registered Agent.
    • Prepare Corporate Bylaws.
    • Issue Stock & vesting schedule docs
    • File Annual Report and Pay Franchise Tax.
    • Obtain an EIN.

    I'm pretty sure I could do all this myself but I worry that I'll screw something up. Has anyone had lawyers do this for them? How many hours did they bill?

    LegalZoom

    Flat $149 fee. I'm assuming they've got some support staff that pulls from legal templates and makes sure it matches my use cases. Anyone use LegalZoom for foreign-owned C-corps before?

    edit: anyone on this thread. I found this great writeup on lawyers vs stripe atlas vs others: https://satchel.com/incorporation/

    submitted by /u/wiznaibus
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    Small business productivity tools?

    Posted: 08 May 2021 05:04 PM PDT

    My sister and her husband started up a small business building wooden toys for children and in the past year it's just blown up! They are now shipping cross country and recently got their own workshop to build in. Sometimes they have to deny customers because they can't keep up with orders...

    I'd like to get them a gift to increase their productivity but not sure what would be useful. She spends a LOT of time doing 'customer service', responding to questions/queries from potential customers on Facebook and Instagram. I thought maybe a chatbot that would automate all that would free up her time? Any other ideas from small business owners?

    Any help is appreciated!

    submitted by /u/beardedjoy
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    Starting a restaurant pop-up

    Posted: 09 May 2021 01:28 AM PDT

    Greetings!! Very new here, I wanted to get some advice, I am a corporate restaurant manager that's been in the business for 14 years, managing for 6 years. It was recently brought to my attention that I should start a small pop-up food business, I guess people love my food. My question is, where to start? Is it suggested to partner with someone? Anyone have any wisdom they can share? Thank you in advance!

    submitted by /u/kahlersmithjaclyn
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    Purchasing a small business and dealing with creditors?

    Posted: 09 May 2021 12:46 AM PDT

    Hi guys I have my eye on a service based business. There's stuff out there that I like. As I said it's service based so it seems like basically I'd mostly be buying the list of client's.

    Most of the pricing seems to be about 6-10 months of turnover. So perhaps a year of profit.

    My first question is this. What is an appropriate amount to offer when wanting to purchase? I feel like I should offer quite a bit less than they are advertising, especially as these businesses have been sitting for sale for a few months.

    My second is how do you assure you get paid. I would think to at least ask for half upfront or for the equivalent of an hourly rate up front. So for example for a three hour job ask for $100, so at least if they don't pay it's still $33hr. But how do you avoid bad creditors in the first place. It's a very big fear for me especially since obviously small business es aren't going to have the kind of resources to track down people and have debt collectors track them down.

    submitted by /u/Massive-Lavishness78
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    Is taking Business courses/degrees worth it?

    Posted: 09 May 2021 12:28 AM PDT

    Is taking course in business or small business worth going to to assist with opening one truly beneficial? My local college offers one for small business management and also business management. Has any one else taken them and seen added bonuses or know if they are?

    submitted by /u/SoloDoloMano
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    Is it worth it to start an LLC as a 1099 worker?

    Posted: 08 May 2021 09:06 AM PDT

    I've heard that creating your own "business" to use as a 1099 worker is beneficial legally and financially as a sort of cushion between you personally and anyone else.

    I'm brand new to being a 1099 worker (100% sales commission job) and I'm just trying to see if this would be smart. Or maybe even if this would have any significant impacts on taxes and write offs?

    submitted by /u/popogoespoopoo
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    Where is the best place to go for trademarked your logo?

    Posted: 08 May 2021 06:11 PM PDT

    I dont have a slogan or anything but I want to keep my logo. Any suggestions on best place and prices?

    submitted by /u/deliciousmissesu
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    Starting my bakery business

    Posted: 08 May 2021 08:17 PM PDT

    I started in December as a home baker and quickly moved to renting a commercial kitchen. I'm still limited with things with the commercial kitchen since I pay by the hour and I can only work at night since the owner has a jerky business and takes up literally the entire kitchen when he's there. So now I'm looking at getting my own place. Just looking for some tips and advice on going down this route.

    submitted by /u/Signal-Ad-9892
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    Question: How have you used technology to grow your small business to date?

    Posted: 08 May 2021 04:17 PM PDT

    General question, but how have you used technology to start, grow, scale your business to date? Where did you start and where are you now with the use of technology.

    submitted by /u/missthang30
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    Starting a Wedding Venue

    Posted: 08 May 2021 07:54 PM PDT

    My husband and I just got married, and his parents liked the venue so much that they bought it! Any wedding venue owners/wedding vendors out there, do you have any tips on owning and operating a wedding venue? It is a barn/rustic style location in central North Carolina.

    submitted by /u/Pawsome23
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    Is this good enough for a business purpose?

    Posted: 08 May 2021 10:15 PM PDT

    Hello! I am in the process of starting/registering an LLC and need some help figuring out if my business purpose is okay.

    "Our purpose is to bring more consumer awareness toward environmentally friendly or socially sustainable, home-related products and accessories."

    I say environmentally friendly or socially sustainable because i can't promise that every single product can be both, but they will definitely be either one. And i decided to substitute Fairtrade for 'socially sustainable' just in case Fairtrade is too restricting.

    I also say "products and accessories" cause one day I'd also like to sell home decor!

    Anyway sorry if I'm rambling. Any suggestions are appreciated. Thank you!!

    submitted by /u/noteniarol
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    LinkedIn Lead Generation tool with Getting introduced feature

    Posted: 08 May 2021 09:59 PM PDT

    LinkedIn Sales Navigator Team account has got "team link " feature which allows you an easy way to make warm introductions to your prospects using your entire team's network. https://business.linkedin.com/sales-solutions/learning-center/resources/tip-sheets/ts029#:~:text=TeamLink%20allows%20you%20an%20easy,to%20your%20teammate%20on%20LinkedIn.

    It is similar to LinkedIn earlier free feature of " Get Introduced through a connection ".But that got eliminated way back 2015.😪

    Is there any other tool which offers similar feature with linkedin to contact a prospect through your connection but less expensive for sales lead generation to ?

    submitted by /u/my_name__something
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    Why do loan agencies want to see our personal tax returns?

    Posted: 08 May 2021 09:48 PM PDT

    Hey everyone. I am currently in the process of applying for a small business loan. I don't understand why they want to see my personal tax returns. Can anyone explain to me why they request personal tax returns? To be honest, I did not work many hours in 2020 for several reasons. As a result, my income is really low. However, it's a different story this year, as I started to work full-time. When they asked for my yearly income, I provided my estimated income for this year. What do you guys think?

    submitted by /u/Bladeblazer
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    LLC Registered Agent Services

    Posted: 08 May 2021 03:42 PM PDT

    So we are working on opening our business and have sold a few things but want to open an LLC before things start building up.

    While researching on an LLC we saw a lot of people pushing towards just submitting your own paperwork to the state and paying the fee. This seems super straight forward and while looking it up I have no doubt I can do it myself.

    My questions comes up on the Registered Agent services that something like ZenBusiness Offers. The idea of having our home on public record as the service agent doesn't sound good to us and also with plans of traveling in the next year and operating mostly remotely even though most of our production would be in our home state.

    Looking at $119-199/yr for ZenBusiness doesn't sound horrible to us when it comes to handling Registered Agent duty, Compliance Deadlines, etc.

    Any reason why we should not do this?

    submitted by /u/gusontherun
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    Is it smart to take out a big business loan right now?

    Posted: 08 May 2021 07:23 AM PDT

    I am thinking about starting my own contracting company (specifically landscaping) and filing my own LLC. This new company would be absorbing the clients of a former business so it would already have cashflow. After overhead and payroll, I expect the company to net $2k a month at first. The business loan I plan to take out is sure to expand the client base and net profit, however, I am concerned with the current state of inflation in the US. Would it be smart to take out a hefty business loan right now?

    Edit: More specifically, the business loan would be used for new equipment and a vehicle. I'm estimating I need $100k to $120k

    submitted by /u/Alien_Biometrics
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