What You Need to Know Before Starting a Business
Many people who have been laid off due to the poor economy have decided to take this as an opportunity to follow their dreams and start their own business. While most Americans might not realize it, America runs on small business. Yes, we have the big boys like Wal-Mart, Ford, Bank of America and many others, however, the majority of Americans work at small businesses with less than 25 employees that makes less than $5 million dollars a year. I have personally worked for a few such businesses and have spent time working with others to help them get started.
There are many benefits from working for a small company. However, if the company isn’t run properly, be careful. The first thing that new business owners need to do is decide the type of business form.
If the business is going to be a corporation, LLC, or partnership you need to set up a separate business banking account to use for the business. This is extremely important but is often overlooked by small business owners just starting up. If you don’t maintain a separate account for business purposes, it will be difficult to maintain proper books for the business which will really hurt when tax time rolls around.
Owners also need to maintain proper accounting books for their business. This allows the owner to see where the money is going, which products are making money, and whether the business is actually making a profit. Just because a business is bringing in money doesn’t mean that it is actually making a profit. To have a successful business you need to know what is happening to your cash.
Need to Sell Quick to Avoid Foreclosure? Check out these tips to sell your house.
Many homes today are being sold in short sales. Short sales are when the bank agrees to allow the homeowner to sell the house for less than the outstanding balance of the mortgage. This can be a great option for banks as it saves them the cost of going through a foreclosure proceeding and if the house sells, it keeps the bank from having to sell the house. This can also be a better option for homeowners as a short sale looks better on a credit report than a foreclosure.
Before proceeding to offer your house for sale under a short sale agreement, you should first talk to your bank about your situation and see what they would advise and the amount that they would be willing to agree for you to sell the house for. It would also be a good idea to consult a real estate lawyer as some districts require the homeowner to still be liable for the difference between the selling price of the house and the outstanding mortgage.
Once you have decided that a short sale is a viable option for you, contact a realtor to list the property and take a good look at your house. To you it is a home and all the nicks and stratches on the walls may have memories, however, to potential buyers these only represent extra expense that they will have to sink into the home to bring it up to their standards.
It might be worthwhile to hire a person to come in and stage your house for potential buyers. Staging is when a person comes in and makes some changes to the house to make it more appealing to potential buyers. This can include things from decluttering rooms to make them appear more spacious, rearranging furniture, and adding homey touches like fresh flowers.
There are plenty of homes on the market right now so you need to differentiate your house from the others through staging or making a few changes to update the house. At the moment there are plenty of out of work homebuilders willing to work for excellent rates so if you were considering getting rid of that 1970s shag carpet and outdated wallpaper this is a great time to do it. You don’t need to replace it with top of the line products, but making a few simple changes like that will definitely make your house more competitive.
Starting a Business, Should it be a Corporation, Partnership, LLC?
In this crazy economy many people are getting laid off and deciding to follow their dreams and start the business they have always dreamed of. So what should you be thinking about when starting a business?
One of the first decisions you will need to make once you decide what the business will be is how the business will be run. A big part of that is whether the business will be a sole proprietorship, a corporation, a partnership, or an LLC. So what are the pros and cons of these different types of businesses.
Sole proprietorship - This is often a great starting place for small businesses. With this business form there is one owner who is liable for all debt incurred by the business but also gets the benefit of all the profits. While this can be a great way to start a business, you need to consider that if the business is sued or something happens, the owner is strictly liable.
Partnership - This business form is for a business with one or more owners. Like sole proprietorship this form of business also requires that at least one owner is liable for any debts incurred by the corporation. This partner is called the general partner. Partnerships can have several limited partners and general partners but there must be at least one general partner. Limited partners are not liable for the debts of the partnership.
Corporations - This form of business has limited liability for the owners, who are called shareholders. This means that the shareholders can not be liable for more than their contributions to the corporation. However, on the negative side, income earned by the corporation is taxed as well as dividends distributed to the shareholders.
LLC - This is a relatively new business form. LLC allows the business to have limited liability and the business owners can elect whether they want to be taxed as a corporation or a partnership if there are two or more owners or a corporation or disregarded entity (sole proprietorship) if there is one owner.
If you are considering forming a business, it is best to check with your local Small Business Administration, local Chamber of Commerce, or a lawyer for information on properly forming a business.
Making Food Affordable
Times are hard. We know that. So how can we afford to keep paying our bills but still eat well? When things get tough, usually the first area that sees cuts are eating out and entertainment. However, if you aren’t careful you can still end up spending the same amount of money on food and not even realize it.
For example, you may decide that you want to start eating at home more so you head to the grocery and start throwing things into the cart. Maybe some fresh produce and fruit so you can stick to that New Years Resolution. A little of this and a little of that and before you know it the cart is full.
Two days later you are leaving work starving and dreading the idea of going home and starting to cook. It’s been a long day and all you want to do is sit on the couch, watch some television and not think. But there is nothing cooked in the house. So you decide to take a detour on your way home and pick up some food.
You may have started the week with the best of intentions, but you wandered. In order to ensure that you actually do save money on food costs, plan out your weekly menu before going to the grocery store. This way you only buy what you will need for the week. This prevents impulse purchases which usually pad the grocery bill and pack on the pounds.
Once you have a menu planned, check out your Sunday paper for coupons or a website that offers coupons online that you can print out and take to the store. There are several wabsites that offer coupons. Check out Pillsbury or www.couponmom.com or www.coupons.com.
After you have purchased the stuff for the week, spend a few hours over the weekend when you have the time and energy and prep the recipes. This can mean making an entire recipe so you only have to reheat it when it’s time to eat or perhaps preparing a casserole and then freezing it until you are ready to cook it. By doing this you have no excuse for picking up fast food on the way home. Following these tips will help you have a healthier life and hopefully a fuller wallet.
Exploring Individual Retirement Accounts
1. Who can contribute?
IRAs are a great way to save towards retirement. Taxpayers younger than 70 1/2 on December 31st are eligible to contribute to an IRA.
2. How much can I contribute?
If you do not have a retirement plan with your employer, you can put $5,000 a year in an IRA ($6,000 if you are 50 or older) into a traditional IRA as long as you make at least that amount of taxable income during the year. Contributions can be made for a taxable year any time from January 1st of that year to April 15th of the following year when taxes are due.
3. What’s the benefit to having an IRA?
IRAs are a great way to save towards retirement. Traditional IRAs allow people to save money with pretax dollars. Roth IRAs allow people to put money into an account with after tax dollars and the money grows tax free. That means that you won’t have to pay taxes on the interest that accrues on your investment. Another great benefit of an IRA is because it is a way to save for retirement the money in your IRA will be protected from bankruptcy.
4. When can I get my money out of the IRA?
Money put into an IRA generally can’t be taken out before you reach 59 1/2 years old without a penalty. However, there are a few instances where the IRS will kindly give you a pass to use the funds before reaching before reaching 59 1/2 without a penalty, these include:
* distributions for the cost of medical insurance while unemployed,
* distributions to buy a home for first time home buyers (this is limited to a distribution of $10,000),
*distributions to pay for a qualified higher education for your education, your children’s education, or your grandchildren’s education.
5. How do I get an IRA?
Talk to someone at your local bank or check out opening an account online through a trading company like Scottrade or Sharebuilder. The process is very simple and only takes a few minutes. Once you set up your IRA you can use the money deposited in the account to invest in stocks, bond, mutual funds or just leave it in your money market account to accrue interest.
Entertainment without Breaking the Bank
Times are hard. We all know that life isn’t easy right now, which makes taking some time to enjoy life even more necessary. The harder things are, the more necessary it is to get some stress relief by doing something fun. So how can I destress without breaking the bank?
1. Discount movie rentals
Rather than spending $5 for each movie rental at your local store or getting an online subscription to rent movies, consider renting from the machines at your local Wal-Mart, grocery store, or McDonalds. There are many stores that offer recent movie releases for around $1 to $1.50 a night. This is much cheaper than going to the movies and spending $10 per ticket plus a drink and popcorn.
2. Reading a book or magazine
Local libraries have seen a big boost since the economic downturn. Rather than spend $5 to $10 on a book or magazine that you may only read once, drop that money in a savings account and rent the book from your local library. Many libraries also have subscriptions to a variety of magazines so instead of impulsively purchasing a magazine at the grocery store checkout lane, stop by your local library to read the magazine or check out the magazine’s website as many magazines post articles to their website and allow everyone to view the articles for free.
3. Join a local group
If you enjoy running, check out local websites where you can find information about running clubs rather than spending the money to join a gym. For example, check out a city website, Craigslist.org, or ask the people at your local library or Chamber of Commerce for groups that meet to read, run, knit, cook, or whatever else relaxes you.