Business setup

[Kingfisher Apiaries]

How do you have your business set up? LLC, Sole Proprietorship, Corp? Do I need a EIN If I am the only employee except for contract labor? Any good resources? If I were to get my DBA and set up my business, would you do it before years end or after the 1st?

Thanks
Mike

[mxr618]

Hiya, Mike -

I don't have my bee business set up yet (but will next month) but have two others in different industries so I can help point you in the right direction.

If you don't have a business plan, I'd suggest you write one. Do you want to be big? Stay small? Hire more people in the future? Sell shares in your company? Those questions (if you haven't answered them yet) will steer you to the best form of company to set up...

...because you want to show your plan to an accountant (who will do your taxes) and if you want the best guidance (rather than someone you really don't know -- like me! ) you want to show it to a lawyer. From someone who has been there and failed because I made a bad decision on my accountant, I'd strongly recommend one you trust...and one you can fire.

Your accountant is going to want to know if you are going to take losses this year. Did you have any revenues? Can you write off equipment? Your lawyer is going to figure out the best corporate structure. If you are thinking about getting loans or financial assistance, should you put the company in your spouse's name? Etc. Etc.

Simply do a Google search for 'Small Business Resources' and you'll find tons of good stuff about how to do what you want to do.

Here's what I'm wrestling with (and haven't called my lawyer yet)...if I intend to resell other beeks' honey and someone gets sick, what liability do I have?

Hope this helps,

Tom

[Roland]

We are a LLC. I would wait the week. Your insurance agenty will guide you on what you need to do in different situations, like beekeepiing only(sell in barrels),retail , and interstate commerce.

Roland

[Kingfisher Apiaries]

Well, I guess I am a one man band, you are talking to the accountant, and I mow a lawyers yard and he gives me legal advise. It is hard for me to come up with a business plan cause I really do not know what I am doing in the next couple of years. I just turned 17, I dunno if I want to go to college, what businesses I want to peruse, etc. Right now I am trying to figure out how to keep books for myself and 2 businesses and keep them from getting tangled.
Right now I am planing on Sole Prop for my bee biz, dunno about the lawn business. I am going to get some counseling from a local small business development center.

Mike

[jrbbees]

The business plan is very important. It lets you write off losses for several years if you write it showing that you expect losses. It can stand up to the IRS if they claim your loses aren't valid.

Do a search on IRS Classifications and business plans on this site.

[Steve10]

Mike,

First, I applaud on your business drive. You WILL be successful.

Now, you're looking for advise, so for what it's worth, here is mine;

1) Take the time to learn how to write up a business plan. It looks like a daunting task, but it forces you to think your ideas through. Don't think it's cast in stone when it's done. It can and should be modified as life throws you curves.

2) Start your businesses as Sole Proprietorship's. At your stage, you don't really have a lot of assets or money to protect. So, it doesn't warrant the required extra paperwork and legal fees to form LLC's or the various corporations. Makes tax prep a lot easier, too.

3) Learn to do your own taxes. Today's computerized tax programs will lead you by the hand and educate you along the way. Once you learn how a Schedule C (and F) works, you'll know how and why your business decision dictate your taxable income. That's lost if your usual tax preparation means showing up at the accountant with a shoebox full of crumpled receipts on April 14th!

4) As far as college goes. After putting myself, my wife and three kids through college, I've learned a college degree is never a waste of money. Albeit, you can waste a lot of money on college. That being said, unlike many young people your age, you seem to have an entrepreneurial quest. The added bonus, is you can continue your business interests and work around a college education. My suggestion is find a college nearby, that has a business degree program, where you can concentrate on classes that are actually useful. Skip the underwater basket weaving, and load up on the business accounting and business law courses. When it comes to picking courses, think of how they can improve your business. I couldn't fathom how a required college Public Speaking course could ever help me. Now that I'm putting our club's Beginner Beekeeping Course together it dawned on me I should have put more effort into the class! This will be a great shot in the arm for my nuc business. Catch the drift?

End of sermon! Good Luck.
Steve

[Kingfisher Apiaries]

Thanks for all the suggestions. Anyone know of a good business plan template? Dunno where to start.

mike

[Steve10]

Mike,

This isn't a bad place to start.

http://www.bplans.com/sample_business_plans.cfm

[llang]

Rather than just use a template and not learn much from the experience.. I highly recommend this easy reading reference book: http://www.amazon.com/Anatomy-Busine...3463878&sr=8-1

Also explore your local county and state resources because many have small business assistance programs that help small business owners create business plans or other key issues like marketing, strategic planning, etc.

[TxFirefighter]

Mike,
The BEST advise you can get in regards to running a business, from a financial standpoint, is to go seek the advice of a CPA. (Certified Public Accountant) Lawyers know little when it comes to the legal aspects of the IRS. If you are planning on a partnership, then seek advise from a lawyer. Basically, if it has ANYTHING to do with $$ and taxes, you talk to a CPA. If it has anything to do with partnerships, seek a lawyers advice.

[Peter NuBee]

Mike,

This isn't a bad place to start.

http://www.bplans.com/sample_business_plans.cfm

Steve thank you for the web site reference to write a business plan.
I am a professional photographer with my own company www.americanimagingphotography.com and never had a business plan.
Things are slow right now because of the economy, but hopefully that will change in the near future?
Thinking of starting my own bee cut out service in the Boston area to supplement my income, and perhaps make that into a full time business?
Any advice on that subject will be greatly appreciated as well.

R/Peter NuBee

[Andrew Dewey]

Have a look at the IRS guidance (http://www.irs.gov/irs/article/0,,id=186056,00.html) on the difference between a business and a hobby. After you have concluded you are a business (hopefully) I'd next consider your potential for liability exposure. If you are processing honey in your home kitchen, your exposure for handling a food product is presumably greater than if you are selling nucs. In any event planning is necessary for your business to succeed. Part of planning is getting "expert" opinions and advice in areas that you don't have. It may very well turn out that you have no significant liability concerns and are just fine operating as a sole proprietor. Then you don't have to do anything special (except include a Schedule C (or F if you conclude you're really farming) with your taxes) To find the answer that is right for you you are the one that has to do the homework!

[Kingfisher Apiaries]

I would like to go the LLC route, but it cost a TON of money. So, current plan is to go sole p. and "upgrade" to llc or corp.

mike

[Cessna180]

Mike,
Sounds like you don't want to go the traditional route and work for anyone else. That great, because it shows that you have dicided to take control of your life as it should be.
There is lots ahead and lots to learn. Some books to read are Think and Grow Rich by Napolian Hill.
If you want, e-mail me at radford180@gmail.com. I'm in Sequim, Wa. I have a Bee business here and Alaska.
Regrad's,
Mike

[Hartz]

I run a small tax business and while I am not a CPA, I also do some accounting and bookkeeping.
As far as the IRS is concerned, an LLC is the same as a sole proprietor; the LLC is just supposed to limit your liabilities (a debatable subject) If you are savy, you can set one up by yourself. Go to your states' website and they should have the forms neccesary, they will charge you a fee to register.
If you dont charge sales tax or have any employees, you dont need an EIN#.
File your taxes either a sch C or F. sch C will fit better for the retail part of the honey biz but the sch F will fit better if you are wholesale and treat it as agriculture.
IRS says you need to show a profit 3 out of 5 years unless you can PROVE you are trying to be profitable. Bees and Horses are the to most abused "hobby loss" businesses.
I would sugest finding a competant "tax man" unless you are very familiar with the tax code.
A good tax person should save you more $ than they cost you!
Just my 2 cents.

Hartz

[NowThen]

Long story warning!

With the help of my attorney, I set up my business as a sole proprietor LLC. This offers some liability protection and also simplifies the way my taxes are prepared.

I have an accountant do my taxes and help me with questions on running my business with Quickbooks.

I also switched my insurance provider to Farm Bureau. The new insurance is set up to cover me as though I was a working farm. My home (and office) are covered as well as the barn, vehicles and equipment. My yards and home are covered against liability. I also have protection if somebody gets hurt at my farmers' market booth or they claim illness after consuming my honey.

This phase of running my own business was a bit difficult. I did lots of research and there were many decisions to be made. At every step, there were much less expensive (and easier) options that I could have taken. I feel that I now have the part of the business built that I don't have to spend a lot of extra time and worry on. I can focus on executing my business plan - increasing and maintaining productive hives and selling honey.

[Steve10]

Peter - No problem on the website. As far as advise, I like the Confucius saying that goes something like, " If you find a job you love, you'll never have to work a day in your life." Unfortunately, I only do enough cut-outs to keep reminding myself they aren't my cup of tea, so I wouldn't be a good one for advise there unless you're looking on what "not" to do.

Mike - Good for you, I think you've made a prudent choice. If this grows, you'll eventually have to secure liability protection in the form of a corporation and insurance coverage. Until then, get that business plan started and educate yourself. Learn by others mistake so you don't repeat them.

You'll do fine, Steve

[Lauren]

I have my own gardening business with just my husband and I as employees. In our county landscaping businesses do not have to have a business license. I run my bees under that business for now. My husband has a separate business for his music. I would strongly suggest at least getting a Tax ID number. That way you can buy wholesale products.

If you hire on help there is usually a cap on how much you can pay them before they are considered employees. Here in NC it is 600.00 per year. I LOVE having an accountant. I was spending too much of my time trying to do their job! Now I am freed up to do do what I do well, and I know that I am covered tax wise. I can say that my increased refunds more than pay their fees.

[Kingfisher Apiaries]

I may try to have a accountant help me starting out, but I really need to do it my self, right now I am taking a course on accounting that we bought. I plan on taking it in college. My plan for a major is Business Management.

Mike

[Mike Gillmore]

Check with your local College or University to see if they may offer free counseling for business ventures like you are considering. My local Kent State U. branch offers this and I signed up for a session with a counselor. I was given some great advice, as you are receiving here, and they answered a lot of my questions on the various options in starting a small business. At the same time they can recommend courses tailored to your specific needs and goals. I admire your ambition and wish you the best.