Thinking of opening my own business
Joined: Oct 2000
Posts: 17,288
Likes: 39
From: Nashville
my uncle did well at retail....he had 3 stores in Salt Lake City
Womens accessories (rings, ear rings, etc..) and then sold them for nice profits..... but he had all the above listed problems... hard to trust employees (employee theft = big loss), hard to take vacations, health insur, lots of trips to NYC to find the latest merchandise (airline ticket, hotel, cabs, food, etc...).
It was definately not something you just jump into. If you found the rent to be soooo cheap somewhere and you wanted to do something part time you could probably start like that......give you something to do on the weekends as a hobby?
Womens accessories (rings, ear rings, etc..) and then sold them for nice profits..... but he had all the above listed problems... hard to trust employees (employee theft = big loss), hard to take vacations, health insur, lots of trips to NYC to find the latest merchandise (airline ticket, hotel, cabs, food, etc...).
It was definately not something you just jump into. If you found the rent to be soooo cheap somewhere and you wanted to do something part time you could probably start like that......give you something to do on the weekends as a hobby?
Registered User
Joined: Apr 2004
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From: Fort Walton Beach
make sure you incorporate it or LLC it. We do so many cases of sole propritorship where people are losing their house because they are being sued and they can't afford to pay the suit.
If you got any questions, PM me, I do this stuff allllllllll day
If you got any questions, PM me, I do this stuff allllllllll day
Former Moderator
Joined: Jun 2003
Posts: 18,852
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From: New York
Originally Posted by phillys2k,Oct 25 2004, 07:19 PM
like i said 30 grand and up. read it. 30 grand a year is better than most ppl's income most ppl cant even make 20 grand a year.
Joined: Oct 2000
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From: DC
Originally Posted by steven975,Oct 25 2004, 08:33 AM
I think one could go by on less than that. Your average McDonalds brings in under $2M in gross sales.
its net that counts..
the shit that you can put in your pocket at the end of the day...
Registered User
Joined: Aug 2004
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From: La Crescenta, CA
Originally Posted by KaiWang,Oct 25 2004, 07:04 PM
gross sales dont mean anything..
its net that counts..
the shit that you can put in your pocket at the end of the day...
its net that counts..
the shit that you can put in your pocket at the end of the day...
my family is also thinking about opening up a business as well. its scary but at the same time gets me exited. the only thing that really scares me is...UNLIMTED liabilities.
Evilkittie, what is LLC? I guess i'll be talking to you if we decide to open up a business.
Joined: Oct 2000
Posts: 17,288
Likes: 39
From: Nashville
Limited Liability Company - acts like a partnership but limits your personal liability if something goes into the shitter with the company.
Self Employed people (sole proprietorship) are basically on the hook personally if they can't make the business payments. You see a fair number of people in the bankruptcy section of the paper who were "doing business as" "joes plumbing"......
We have our Mortgage Company as an S-Corp.... not sure what the advanatages would be for an LLC vs S-corp.?
Self Employed people (sole proprietorship) are basically on the hook personally if they can't make the business payments. You see a fair number of people in the bankruptcy section of the paper who were "doing business as" "joes plumbing"......
We have our Mortgage Company as an S-Corp.... not sure what the advanatages would be for an LLC vs S-corp.?
Registered User
Joined: Jun 2004
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From: Chicago
S-corp vs an LLC; an S-corp will require you to file an 1120s federal return (and the state equivalent if your state has corporate taxes. an LLC can be accounted for under schedule C of your personal return, or with a federal 1065 partnership return.
either way, the 1120s and 1065 are both pass-through entities - the income that is earned by the business is not taxed at the business level - it passes through to the individual owner(s) returns (your 1040) and is taxed at that level.
have a VERY good talk with an attorney regarding just how much a particular business formation will protect you. there is a fine line between how much risk will pierce the corporate veil and attach itself to shareholders. i would be less worried about not being able to pay my suppliers as i would be about having to cover the subrogation on a medical claim to which i was held accountable for in a product liability case. oh, did anyone mention liability insurance?
as far as what counts - it all counts. gross counts - gotta know what you can sell. gross profit (what you take away from each sale after accounting for the direct cost of what was sold) counts. net profit (what you take away when you reduce gross profit by overhead and other costs). simple guideline in small business - at least a 300% markup - 1/3 to cover the cost of the item, 1/3 to cover other costs (rent, payroll, taxes, interest, insurance, float), 1/3 left over for you.
need to lower the markup to get a retail price that's competitive? the 1/3 to cover the cost isnt going to change. the 1/3 of overhead isnt going to change. the discount comes out of your pocket. how to survive? scale. making a penny profit on something doesnt sound like much until you're selling a million of them a month.
you will not get to vacation. no matter how sick you are, you dont get a sick day. hate your boss? now EVERYONE is your boss - your customers, your vendors - they're all going to dictate requirements to you and will probably not be nearly as understanding as any boss you've ever had.
surely you didnt mean to insinuate a mcdonalds doing $2m/yr is doing well? maybe $2m/mo. franchises are nice if you have no personal creativity and just want to buy someone elses idea for top dollar. when i had a domino's pizza, you could get them for $65k. at the time, subway was $7k. times have changed. expect to make ok money until you can open another and then another franchise. then you'll be making ok money.
get a copy of "the millionaire next door". then go open a dry cleaner, the #1 business owned by self made millionaires in this country.
wait, you just wanted to open a small goth retail outlet. before trying to do it yourself - go get a job at one and learn from your employers mistakes. then, if you REALLY still want to do it, buy him out.
make a list of every question you've got. organize your thoughts. then, find yourself a local CPA - one that's been around the block and has many retail clients and does more than just writeup and tax compliance for them. get your questions answered.
definitely save up that 6-12 months of what you'll need to live on.
then go for it!
I did...
either way, the 1120s and 1065 are both pass-through entities - the income that is earned by the business is not taxed at the business level - it passes through to the individual owner(s) returns (your 1040) and is taxed at that level.
have a VERY good talk with an attorney regarding just how much a particular business formation will protect you. there is a fine line between how much risk will pierce the corporate veil and attach itself to shareholders. i would be less worried about not being able to pay my suppliers as i would be about having to cover the subrogation on a medical claim to which i was held accountable for in a product liability case. oh, did anyone mention liability insurance?
as far as what counts - it all counts. gross counts - gotta know what you can sell. gross profit (what you take away from each sale after accounting for the direct cost of what was sold) counts. net profit (what you take away when you reduce gross profit by overhead and other costs). simple guideline in small business - at least a 300% markup - 1/3 to cover the cost of the item, 1/3 to cover other costs (rent, payroll, taxes, interest, insurance, float), 1/3 left over for you.
need to lower the markup to get a retail price that's competitive? the 1/3 to cover the cost isnt going to change. the 1/3 of overhead isnt going to change. the discount comes out of your pocket. how to survive? scale. making a penny profit on something doesnt sound like much until you're selling a million of them a month.
you will not get to vacation. no matter how sick you are, you dont get a sick day. hate your boss? now EVERYONE is your boss - your customers, your vendors - they're all going to dictate requirements to you and will probably not be nearly as understanding as any boss you've ever had.
surely you didnt mean to insinuate a mcdonalds doing $2m/yr is doing well? maybe $2m/mo. franchises are nice if you have no personal creativity and just want to buy someone elses idea for top dollar. when i had a domino's pizza, you could get them for $65k. at the time, subway was $7k. times have changed. expect to make ok money until you can open another and then another franchise. then you'll be making ok money.
get a copy of "the millionaire next door". then go open a dry cleaner, the #1 business owned by self made millionaires in this country.
wait, you just wanted to open a small goth retail outlet. before trying to do it yourself - go get a job at one and learn from your employers mistakes. then, if you REALLY still want to do it, buy him out.
make a list of every question you've got. organize your thoughts. then, find yourself a local CPA - one that's been around the block and has many retail clients and does more than just writeup and tax compliance for them. get your questions answered.
definitely save up that 6-12 months of what you'll need to live on.
then go for it!
I did...
Thread Starter
Joined: Dec 2000
Posts: 4,404
Likes: 2
From: Cape Girardeau
WOW.
Thanks for all the advice and information, I don't know what to say, you guys rule!
I still think that opening my own business is the way to go, but dreaming of having my own specialty shop is truly a pipe dream, for this area. I mean, if I lived in New Orleans it'd be different, but I'm in the Bible Belt, have no chance of getting a high-traffic spot, and there are probably few people around that are really interested in the stuff. Oh well, dreams are just that, dreams.
I guess I'm just reaching, I recently quit my job at SBC making 60K a year (and LOTS of fringe benefits) because I HATED it. Unfortunately, there are few jobs around here that pay that kind of money.
I'll make something work, it's just gonna' take some time and hard work.
Thanks for all the advice and information, I don't know what to say, you guys rule!
I still think that opening my own business is the way to go, but dreaming of having my own specialty shop is truly a pipe dream, for this area. I mean, if I lived in New Orleans it'd be different, but I'm in the Bible Belt, have no chance of getting a high-traffic spot, and there are probably few people around that are really interested in the stuff. Oh well, dreams are just that, dreams.
I guess I'm just reaching, I recently quit my job at SBC making 60K a year (and LOTS of fringe benefits) because I HATED it. Unfortunately, there are few jobs around here that pay that kind of money.
I'll make something work, it's just gonna' take some time and hard work.