Choosing the Best Business Entity for Your New Small Business

Starting your own business can be an exciting time in your life, but not one to be entered into lightly. One of your biggest decisions will be , but what type of business entity should you use? There are advantages and disadvantages to every type of structure.

The key is to consider your needs and then simply match them to the business entity that makes the most sense depending on the kind of small business you wish to run.

Forming a business properly will give you tax advantages, and protection from identity theft. You will not have to give anyone your social security number online, for example, in order to get paid for your products and services. So which business entity is right for you? Let’s look at the most common structures for the small business owner:

1. Sole proprietorship.
With a sole proprietorship, legally, you have no separation from the business. You would report the business income as personal income. Also, the business debts and liabilities are your debts and liabilities.

2. Partnership.
This is essentially the same as a sole proprietorship, but with more than one business owner. Sole proprietorships and partnerships make the best sense for smaller service businesses (little business debt) and those with limited assets.

* If you’re going to be selling products, you’ll have inventory. Inventory typically means debt, since there is usually a period of time before the bill comes due.

* Be careful about using a partnership or sole proprietorship in this situation. If you can’t pay your bills, everything is fair game for the bill collectors, including your house, car, bank accounts, and other assets.

3. Limited Liability Company (LLC).
A limited liability company separates the owner from debts, liabilities, and legal judgments against the business. In theory, any claims against your business could not result in you losing your personal property or assets.

* It’s smart to consult an attorney to set up your LLC in such a way that no court would be able to “lift the veil” of separation between your corporation and your personal assets.

* For tax purposes, an LLC is handled the same as a sole proprietorship or partnership. Your business income is reported as personal income. However, there are a significant number of tax deductions you would be allowed to take compared with filing a personal return.

4. C-Corporation or S Corporation.
From a liability standpoint, a corporation is similar to a limited liability corporation. Your personal assets are safe from your business-related issues. However, for tax purposes, the business is taxed separately from personal income. The business itself is taxed.

* You would be taxed for whatever salary or bonus you receive. This would be considered personal income.

* Corporations and limited liability companies make a lot of sense for owners that have a real risk of being sued, or the possibility of creating a lot of business debt. It is also worth considering for those that have considerable personal assets. In our litigious society, it is often not a case of IF you will get sued, but WHEN. Do not let this deter you from starting your own business, but do let it be a practical reminder to put all your protections in place from the beginning of your business in order to save a lot of trouble further on down the road.

* Corporations also allow for the issuing of stock. This means you could raise funds later if you needed to.

*Corporations are allowed many more tax deductions that an individual.

*Corporations will cost more money to set up, and there are very specific rules that need to be followed in running your corporation.

*Fortunately, thanks to the Internet, incorporating is a lot easier that it used to be and depending on what company you use, you will often get a kit with all of the paperwork and so on that you need to set up and run the corporate effeciently.

* Keep in mind that the corporate tax rate in the United States can be quite high. That’s why so many corporations have a small office in another country and declare that their headquarters. Unless you want to raise money by issuing financial instruments (stocks and bonds), the corporation structure is probably not the most beneficial choice.

5. Nonprofit. If your business will rely on donations and carry out a purpose that serves the community, you might consider a nonprofit corporation structure. Suitable purposes include educational, scientific, religious, or charitable purposes.

* The income received in the form of donations is typically not taxed.

*Non profit does not mean you make no profit. There are rules and regulations involved in how the money is earned and spent, but basically, you work it so you have a $0 balance at the end of the year.

6. Cooperative. A cooperative is very similar to a partnership and limited liability corporation. There are multiple owners with liability protection, but income is taxed as personal income. Cooperatives are all about having equal owners. One person=one vote. All income and benefits are distributed equally. This might be great if you have a range of people you can work well with, but going into business with someone else can change both of you. Do not be willing to get married if you are not prepared to also get divorced if things do not work out, in partnered life, and in business.

Setting up a business doesn’t have to be difficult. Choose the structure that best suits your needs. Some forms of business are more complicated and expensive to set up than others. Check out all the details before making your decision and get some expert help.


Learning How to Make Money Online

One of the things we love most about the online world is how easy it is to gain new skills. There are so many great ways to learn, through ebooks, webinars and videos. YouTube is a treasure trove of educational videos, entertainment and more. We don’t know about you, but none of us can remember the last time we watched TV!

Ebooks through Amazon are great because you can read them on any device. Just download the right FREE app for your device/s of choice and then check your books in and out of your digital library, from one device to the other.

We just spotted this really interesting series of videos on how to make money online in the online marketing field. Just think what even an additional $20 to $100 per day could do for you and your family. In most cases, you sell products for others as an affiliate, and get a commission.  Affilliate marketing is one of the easiest ways to get started in a real business of your very own. And because it is online and digital, there are very few start up costs, and it will earn for you around the clock. You can sign up for a free ecourse via email to learn more about affiliate marketing: Free ecourse

You can even make money as an expert yourself if you have the kinds of skills that people want to learn.  You can be a personal coach, offer instructional webinars, and position yourself as a leader in your industry.  Again, just think what a difference this kind of additional income could make in your life. Don’t be stuck in a poor money mindset when there are so many opportunities online.



How to Start Your Own Business With Little or No Money, Part 2

(Continued from Part 1)

4-Become an affiliate.
An affiliate sells products and services for a commission. You are probably familiar with Avon and Tupperware, in which people sell products to friends and family, host parties and so on. This is commonly referred to as direct selling, and is done in person.

You can also sell products online for a commission, in which case it is referred to as being an affiliate. There are many affiliate marketplaces in which top companies and designer brands recruit people to sell for them.

The largest marketplaces for affiliate selling are Commission Junction (, LinkShare and ShareASale. Amazon and eBay also have affiliate programs. You don’t even need a website to sell these products. Simply create your links and put them in the signature files of your emails, put at the end of any posting you create on notice board or forum, use in the comments section of a blog you read and use in your social networking area.

If you do have a website, so much the better. You can post [honest] reviews of the products you are selling, the latest hot items in your niche, and more.

Choose a niche, that is, an area of expertise, and stick to it. Study it carefully and know what people like and are genuinely interested in. For example, if you are a real movie buff, then selling DVDS is a great option. Do not do it, however, if you barely ever see a film.

Being an affiliate can be a fun and interesting way to make your own money and even start your own side business. You promote the products, and the company you are an affiliate for does the rest, taking care of all the order fulfillment, packing and shipping. The commissions may not be that high, but they are better than nothing.

You can also consider being an affiliate as an ‘instant discount’ on any products and services that you buy. For example, you shop online at Amazon anyway (and tens of millions of people do), become an Amazon Associate, then set up a second account so you can buy through your own link and get instant savings.

Being between jobs doesn’t mean you have to do without income. You might also want to supplement your income from your day job, or start moving towards the financial and personal freedom you long for by starting your own business.

There are many ways to start your own business even with little or no spare cash, if you are willing to put in the time and effort. The ideas above are just a starting point to get you thinking about all of your available options.

As an added bonus, by earning any sort of temporary income, you can start creating the kind of wealth you need to start the business of your dreams. You will also be coming into contact with people who may be able to help you find a permanent position.

If you still have a job but you are underpaid, underemployed, or both, these are just a few of the ways that you can make extra money to pay off debts, start an emergency fund, or start saving for your financial goals for the future.

Further Reading
YOUR RECESSION SURVIVAL GUIDE: How to Save Money and Even Boost Your Income in This Recession

How to Start a Successful Small Business Even If You Don’t Have Much Cash

How to Make Money with Affiliate Marketing Even Without a Website

Information Marketing Success: How to Make the Most of Your Online Content for Increased Traffic and Profits


Top Tips on Outsourcing For Your Small Business, Part 2

(Continued from Part 1)

* What to Outsource
The first few things to outsource are:
1. Low-level tasks that take up a lot of time
2. Things that take up a lot of your energy
3. Things that you are not very good at, annoy you, or you dislike

By easing the burden on both your time and energy, you will feel less drained and be better able to tackle the really important challenges in your business.

* When to Outsource

The real answer is as soon as you start your business, but you might not have the cash for that. However, do include it as a built-in part of your business plan. Once you have some cash coming in, go to the freelance marketplaces and and see who you can find to lend a hand with certain tasks. You can easily get rid of the bad workers and find some reliable good ones to help you. Just remember that outsourcing should actually make you money, not cost you money.

For example, if your work is ultimately worth $50 an hour but you are spending your time on $10-an-hour tasks, you can hire 4 workers at $10 an hour and still be making a profit, but you will have reduced the value of your time. However, if you can boost the value of your time to $100 an hour because you are free to focus on what you do best, then your outsourcing will more than pay for itself and leave you plenty of profits besides.
* Outsource In All Areas of Your Life the Box

Don’t just outsource things inside your business, but in your personal life as well, to help you become more efficient. You might not like the idea of people ‘waiting on you’, but especially in this economy, think of all the people you can help earn money in gainful employment.
If your time is worth $50 an hour, then by all means pay someone $10 an hour to do your laundry, clean your house, shop for your essentials, and so on. Even if you are only paying your child or spouse, remember that there are many acceptable tax deductions once you own a business.

It might seem like an extraneous expense, but again, every extra hour you can put into your business is more money earned. More money earned means more success for you and your loved one, and more ability to help others.
*Outsourcing Online
Outsourcing online can give you access to people all around the world willing to work to earn money. In this case, you might not outsource ongoing tasks, but small projects. Logo creation, website creation, and other one-off projects can all be running in the background simultaneously while you do other work. You can also outsource ongoing tasks like attending to customer service, virtual assistant tasks and more. See how you spend your time every day and what you can safely hand over to others and free up your time to generate more revenue more rapidly thanks to outsourcing.



Top Tips on Outsourcing For Your Small Business, Part 1

Outsourcing is one of the most powerful tools in any small business owner’s toolkit for increasing their productivity, output and eventual profits.

Most new business owners start out doing everything themselves. This allows them to keep control of all aspects of their business during the critical start-up phase and to keep costs down. Unfortunately, this control over the work and the costs can actually start to hamper them and prevent the business from growing to its full potential.

Here are some top tips on how to use outsourcing effectively for your small business.

* The Boss Does Not Need to Sweep the Floor

Most business owners get into the mindset that if they want the job done well, they have to do it themselves. This might be true, but as your business grows, you will have to decide which jobs you NEED to do for the sake of the business, and which will need to be outsourced because there will never be enough hours in the day to do everything.

It is easy to find someone to sweep the floor for minimum wage. That same person would not be likely to be the best choice to send to a high-powered meeting with potential investors. Therefore, why are you doing THEIR job, when you should be doing YOURS?

Your job as the head of the business is to grow your company to a healthy and sustainable level financially through activities which generate income. No matter what your business, there are administrative tasks that can be handed over to others. The critical thinking and real value creation is where you as the owner should be focusing your attention.

By all means start people off in the process, for example, by creating sample customer service emails that your outsourced worker can edit as needed. And do ask them to let you know of any major problems that might arise, since customer service is an important part of keeping customers loyal and establishing a good reputation for your business. But it would not be a productive use of your time to answer every CS email yourself.

(Continued in Part 2)