What's the next step?

[Blakesmaster]

Before I get murdered for my honesty in the underbidding thread I'll follow their advise and try to become as legit as I can.

A quick where I'm at.

Enough equipment and skills to tackle most jobs. We'd only walk away from crane work or lot clearing at this point. We just got our DBA last fall. We've filed for our Federal Tax ID number and should be getting that back soon. WE need to get our ad in the yellow pages ASAP because the cut off date is May 1st and we still haven't gotten insurance. We have 3 partners, 1 of which is studying for his ISA certification. We have no loans on anything at this point. We don't have enough work to go full time so we still maintain our day jobs. I don't understand squat about taxes but was told the ID # was necessary. I assume liability coverage is next. Where?

 

[ATH]

If you are freaked out by the tax stuff step #1 is find an accountant.

For liability insurance, call around to local agents offering business insurance.

If you apply pesticides, you probably need a state license for that and specific statement on your insurance.

Workmans comp may be necessary (by law). Even if not legally required, may be worth checking into to protect yourself and your business.

Ask at the local chamber of commerce if they can offer resources - maybe even a low cost (or free) business "coach".

 

[BC WetCoast]

Step 1 - get an accountant to put together a set of books for you, and recommend a bookkeeper, to do all the basic stuff. If the bookkeeper and accountant have worked together, it will make your life easier at tax time.

Step 2 - get a lawyer. Make sure your business incorporation details are in order, have him advise you on the licencing you need. Finally have him draw up a shareholder's agreement. This document will layout the details between you and your partners, especially if one of you decides to leave or if one of your partners becomes a pain and the rest of you wants to get rid of him (shotgun clause). From experience, this is vital.

Step 3 - get to know your banker. Even if you don't have loans, you need banking services, operating accounts, credit card payment facilities etc.

Step 4 - find a business coach/senior advisor. There are organizations around who have retired business people available to advise on global business issues. This is a very valuable service once you get a little more established. Even at this stage, it is valuable. One company I was involved with, had a couple of gents like this, and we would take them out for an expensive dinner a couple of times a year to ask questions regarding future strategies, act as a sounding board etc. Sort of like an independent board of directors.

 

[lxt]

Before I get murdered for my honesty in the underbidding thread I'll follow their advise and try to become as legit as I can.

A quick where I'm at.

Enough equipment and skills to tackle most jobs. We'd only walk away from crane work or lot clearing at this point. We just got our DBA last fall. We've filed for our Federal Tax ID number and should be getting that back soon. WE need to get our ad in the yellow pages ASAP because the cut off date is May 1st and we still haven't gotten insurance. We have 3 partners, 1 of which is studying for his ISA certification. We have no loans on anything at this point. We don't have enough work to go full time so we still maintain our day jobs. I don't understand squat about taxes but was told the ID # was necessary. I assume liability coverage is next. Where?

#1. get Liability insurance, Atty & Accountants are good, but if your doing things part time Id look into Quickbooks.....its real easy, step by step instructions etc... & if you have a good tax prep service they`ll be able to take it from there!! At the stage of the game your at Atty & Accts might be a little overkill not to mention expensive.

Are you a sole proprietorship, partnership, Inc., LLC or employee owned? how you`re registered will determine your needs also, the Tax ID# if you are a Sole P. usually they will use your SS# unless you filed for a fictitious name then you will be assigned a EID#, theres alot of things you need to know but it also depends on where you`re at right now!!!

Certification is a good thing, but in the area that you live in as well as myself(PA) it will not get you more work, Im doing it more to further my learning & for personal reasons!!

Take Care Be Safe..................good luck

LXT..............

 

[corndogg]

The partnership thing is gonna bite you. How long before one of you quits you job and the others don't? Then who gets paid. What if you all quit and not enough work? It never works unless its big. Plan an escape route for when things go bad. It's hard enough with one owner. Just having to communicate with other people os too much effort.

 

[tree MDS]

Before I get murdered for my honesty in the underbidding thread I'll follow their advise and try to become as legit as I can.

A quick where I'm at.

Enough equipment and skills to tackle most jobs. We'd only walk away from crane work or lot clearing at this point. We just got our DBA last fall. We've filed for our Federal Tax ID number and should be getting that back soon. WE need to get our ad in the yellow pages ASAP because the cut off date is May 1st and we still haven't gotten insurance. We have 3 partners, 1 of which is studying for his ISA certification. We have no loans on anything at this point. We don't have enough work to go full time so we still maintain our day jobs. I don't understand squat about taxes but was told the ID # was necessary. I assume liability coverage is next. Where?

How is anyone supposed to make any real money with 3 of you? As was once put to me "too many people eating off the same plate"-anyway at that rate you had better stop the lowballing, you'll see.

 

[Blakesmaster]

The main reason for the partnership has to do with a very close relationship between my brother, myself and a family friend. It made more sense to pool our resources since we were all in the line of work anyway, just working for different people. I do fear that there might be some trouble down the road that's why we've been considering a lawyer just to make sure everyone's a// is protected. As it stands we've all invested about the same amount, when a job is done a percentage is paid to whoever gets the job and another percentage to everyone invested in the business ( which we all usually dump into our savings account ) and then the ones who did the work get the rest ( which usually goes into the account as well ). We don't have a business account yet which scares me cause the savings is in my name. Too much cash! I tend to think though it may be overkill a lawyer and an accountant our probably our next step. Then on to liability, but that I think we can leave till a few more jobs come in or when our add comes out in August.

 

[OLD CHIPMONK]

1st. visit the local Small Business Administration.
2nd. Hire a good Certified Public Accountant ( best senerio Corporation )
3rd. Seek an attorney who sets up Corps.
4th. If you do , have your accountant do your books & obtain a new E.I.N. no. for the corp.. Kill the old one. Again , all this is done by your accountant.
5th. Bring your Articles of Incorporation, I.D. & Business LIcense to a good commercial bank. You'll want to get business checking account, debit cards & possible line of credit .
6th. You"ll have decide C.E.O.-C.F.O.- President- Secretary- etc. . All this is done through your attorney of choice on the accountant's reccommendations.
You do this so if any one of you wants out or dies you know exactly where you stand. Your contributions & assetts are then protected. Good Luck !

 

[OLD CHIPMONK]

Regards: Dump the money in my savings acct. ( you might be leaving yourself open to the rath of The I.R.S.) Non-payment of taxes due w/ penalties & interest. Go to a lawyer & accountant A.S.A.P. get out of the hole you are digging. You think D.U.I. is bad ???? You never get rid of I.R.S.. Heed this advice before it's to late :jawdrop:

 

[OLD CHIPMONK]

The Small Business Administration offers free small business start-up information. They will counsel you guys & help establish a small business plan.They have lists of Attorneys & Accountants who can help your business.They offer classes & written material that will be helpful, during & after start-up. Information such as Taxes,Business Checking, Accounting-Bookkeeping, Local Licensing, Advertising,Establishing Business Credit,Business Forms & a host of business related information.The Federal Gov't. sponsors & funds this service,for your benefit.Make an appointment & let all of us know what you think.

 

[Blakesmaster]

Thanks oldchipmunk. made the call SBDC in out area, am expecting one back shortly. You guys are awesome!

 

[Blakesmaster]

Got the appointment next Wednesday!

 

[OLD CHIPMONK]

Please allow arboristsite viewers to share your step-up. You may be helping more people, as you go thru the process. Good Luck & keep us posted.

 

[Blakesmaster]

Will do. I hope it's not as painful as I fear.

 

[OLD CHIPMONK]

Worry not! They will get you straight as you become a real business!

 

[Blakesmaster]

just letting anyone who cares know.

We had our meeting with the local small business development center and although it wasn't especially informative I was able to come to the conclusion that I was so far doing things correctly. We'll be going to the bank Saturday to set up our business account and I'm researching a CPA and lawyer right now. After that, phone book and insurance time. I'll keep ya posted.

 

[Dadatwins]

Someone else posted about having a partnership agreement drawn up ASAP. Make sure it is done by a lawyer and all parties are in agreement. Partners and money do not get along well for long. Not meant as a jinx but it is a cold fact. Decide on an agreed upon breakdown for each job. Always keep some capital in a saving account in case of equipment breakdown or other unforseen expense. Make sure you have an escape clause in the agreement that gives each one of the partners the option to buy each out before selling off a piece of the company. A separate bank accont is a must have. Checking account first and then money market savings. Good luck with your business.

 

[Blakesmaster]

Make sure you have an escape clause in the agreement that gives each one of the partners the option to buy each out before selling off a piece of the company. A separate bank accont is a must have. Checking account first and then money market savings. Good luck with your business.

Will do. Thanks!

 

[OLD CHIPMONK]

Glad to see you had the meeting. Now it's time to get serious & straighten out this mess. Before going to open this BANK ACCOUNT, go see a lawyer. Find out if you & your partners should (A) form a PARTNERSHIP or (B) form a CORPORATION . Good advice is what you need, first. Once you get BUSINESS set-up, visit with a good C.P.A. firm. Allow him to advise your BUSINESS ( Partnership or Corporation ) what type of BUSINESS CHECKING would be best. You should also have an INTEREST BEARING MONEY MARKET SAVINGS ACCOUNT,with phone or internet access. The accountant can explain your options. You will have to cancel the E.I.N. no. you already applied for & then re-apply under your new BUSINESS NAME. Find a good COMMERCIAL BANK & get DEBIT CARDS . They can be used in place of credit cards during most purchases. Find out if your Business needs a LINE of CREDIT, your accountant can advise. You may need a CITY or COUNTY BUSINESS LICENSE & ZONING APPROVAL for your BUSINESS LOCATION.Find out what TAX LIABILITY your business is facing. Advertising is next & maybe more equipment. GOOD LUCK & keep us posted.

 

[Blakesmaster]

This is where I'm confused. The small business administration said there was no need to form a corporation at this point, we don't have many assets to protect other than our business and having our DBA was sufficient enough. We're not looking for financing at this point and probably won't be anytime soon. He said with our DBA and EIN we'd be able to open a business checking account with all three of us on it. I agree with getting a lawyer, that's the plan, as well as an accountant but don't see any reason to kill our current DBA or EIN. Everything seemed to be in order so far.