Yesterdays lesson was an eye opening experience of awareness of what your time is worth. We spent time discussing the expenses a business incurs in opening operations such as incorporation costs, business license, marketing, and half a dozen additional start-up costs that most businesses must take into account. In the discussion of self worth, it was advised that entrepreneurs/business owners should note a salary requirement in their financials. Even if you don't take it, know your worth so that if the time comes for you to draw salary, you are comfortable with the payout.
Speaker Allison Ford from Burkett, Burkett, Burkett CPA discussed a checklist of creating a business entity including consulting an accountant and lawyer; deciding on business entity (LLC or S Corp highly recommended); obtaining an Employer Identification Number (EIN) and state ID number; opening a checking/credit card account in the business name; obtaining business insurance as needed; and reviewing wills and estate plans of the owners. In addition, a separate checklist was provided for hiring employees.
Rhonda and I learned that we need to have all talent and crew sign W-9 forms so that we can have the IRS prepare 1099 forms for anyone that we pay out more than $600 for their services. We also need to have a state ID number, even though our business will primarily be services rendered.
A final discussion point was the importance of primary and secondary data. Rhonda and I decided that because our business concept is unique to this area, we will formulate a survey to hand out to various persons to get an idea what people are willing to pay for a selected number of services. We will also email the survey to various organizations/businesses that we will be targeting.
Next week we will have a speaker that will discuss the legalities of operating a business. Stay tuned!!
Sharee
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