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Oh Snap! I'm Making Money...Now What?

Oh Snap! I'm Making Money...Now What?

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Oh Snap! I'm Making Money...Now What?

Lunghezza:
76 pagine
1 ora
Editore:
Pubblicato:
Aug 25, 2017
ISBN:
9781546583240
Formato:
Libro

Descrizione

Just started to make money with your creative business? That's great! But now what?

In Oh SNAP! I'm Making Money Now What?, funny money-man Chris Morris creates your go-to resources for what to do now that your creative endeavor has started making your some money.

He covers topics like:
- Do you have a business or just a hobby?
- Is an LLC the best option for your business?
- When should you hire a CPA?
- Is that skinny triple no-whip EXACTLY 185-degrees (please) latte you buy at Starbucks every day considered a business expense?

With heart, humor, and tax accountant knowhow, Morris provides concrete action steps for creative entrepreneurs to take their burgeoning business to the next level!

Editore:
Pubblicato:
Aug 25, 2017
ISBN:
9781546583240
Formato:
Libro

Informazioni sull'autore

Chris studied mechanical and production engineering at Nottingham Trent Polytechnic. He worked within the engineering industry for 49 years, starting as an apprentice at age 16 with Royal Ordnance (UK MoD), BAE Systems, JCB Ltd and other organisations. He was responsible for the design and production of highly complex precision products. During his long career, his roles have included technician apprentice, skilled fitter, assistant foreman, drawing office draughtsman, production engineer, tooling engineer, leading CAD draughtsman, CAD supervisor, engineering design services team leader and senior design engineer. He has witnessed and summarised numerous wise-working practices, which have been shared in his book. He lives in Nottingham and is married with two sons.

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Oh Snap! I'm Making Money...Now What? - Chris Morris

started.

The First Three Things to Start a Business . . . Plus Other Tidbits of Wisdom

I have some good news and bad news for you.

First, the bad news. The thought of starting a full-fledged business can be overwhelming and produce fear. It’s one thing to make a little money on the side with a hobby, but the moment you decide to make a serious run at a business, fear rears its ugly head. And it becomes stronger when you think about a future where your income flows only from your business. You’ll feel like you’re walking a tightrope between two skyscrapers without a net. While drunk.

Now, the good news. It’s actually pretty hard to make mistakes of a serious enough nature in the early stages of your business that you handcuff yourself to a sinking ship. It’s more likely that you might make a few less-than-ideal choices with some unexpected tax consequences. But with only a few exceptions, these can be fixed. The goal of this chapter is not to strike fear in you or cause you to feel as though you can’t fix what you’ve already done. Instead, it’s to lay out the concepts you need to give yourself the best chance at a strong business.

Dreaming about cash flow is easier than taking the important steps to turn your dream into a reality. Knowing where to start can be nearly overwhelming.

That’s where I come in.

It’s not sexy, but this chapter will identify the three first steps you must take to set yourself up for success while addressing a number of other questions related to starting your business in the eyes of the government.

What Are the Three First Steps?

The remaining questions in this chapter will outline each of these steps in far greater detail, but without further ado, here are the first three actions you should take to establish your business.

Determine how you want to structure your business. Options include a sole proprietorship, an LLC, a general or limited partnership, an S-Corp, or a C-Corp. There are benefits and drawbacks to each, and there is no one-size-fits-all solution. This should be the first thing you decide on for your business because it affects the paperwork you do (or don't) need to file with state and federal governments, the structure of your accounting system, and how certain transactions are treated for tax purposes. Also, each business structure poses unique risks for potential audits from the IRS. It’s important to note at the outset that the nature of your business may require you to set up a certain type of business or preclude you from being organized a certain way. Do your homework, or hire someone to do it for you.

Open a business checking account. Many entrepreneurs overlook this vital step because it feels like an unnecessary hassle. However, there are several reasons opening a business checking account is a wise move. For starters, most states require a business account for companies organized as an LLC or an S-Corp. In other words, you will not be able to function as a business without a business account if you elect to organize as an LLC or S-Corp. Plus, separating business expenses will allow you to be better prepared for your taxes and an audit—if you are unfortunate enough to be selected for one.

Decide on your back office approach. I know. Nobody wants to think about accounting and bookkeeping at all, so of course the CPA says to start by thinking about it. Yes, I do have a bias, and I understand not everyone will feel the same sense of peace I feel when I know my books are up to date. But hear me out before you discount this as unimportant: The last thing any business owner wants is the fear of an unknown tax bill hanging over their head in February. By organizing your back office, you’ll prepare for that ahead of time. No surprises means less stress, plus time to focus on building your business.


The remaining questions in this chapter will add detail around each of these three integral steps and will answer questions you might not have known to ask about getting your business off the ground.

How Do I Know if I Have a Business or a Hobby?

This is not as difficult as one might think. It seems tricky because it’s easy to think that a hobby is for fun while a business is to make money. The colloquial distinction between a hobby and a business is motive or passion, but surprisingly, the IRS doesn't care about why you have your business. The taxman looks only for dollars and cents.

With that in mind, the clear distinction between a hobby and a business is cash flow. To be more specific—revenue.

While a business can certainly lose money in its first few years of existence, no business exists without profits. And no business can exist long term and earn profits without at least one product. These products can be services, digital products, or access to intellectual property. But you need something to sell.

These are the metrics that identify the difference between a hobby and a business:

If you have something to sell, and you are actually selling it, you can say you have a business.

Otherwise, you have a hobby.

For creative individuals, a hobby and a business can look quite similar. For example, you might decide to start writing a blog because you have a

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