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Community Manager

Want to take your business to the next level? Ask a Business Coach!

Welcome to the AARP Online Community! Now through September 15th, we are joined by Business Coach Keith Hall. Please ask your questions by reply post below--all are encouraged to participate!

Ask yourself, is now the time to advance your business? Are you ready to hire employees, secure more funding, or perhaps in need of a new marketing and sales plan but not sure to do it all? Business Coach Keith Hall is here to help.  Ask him how to grow your business!

 

1140x655px-Keith Hall_Staff Photo_1.jpg

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Newbie

 Thank you for taking my questions.  I opened a juice, smoothie and create your own salad bar in December 2018. I exhausted my pension in the start up kid the business. Now, I find that I can't keep up with the expenses eventhough the business is doing well. 

My question is Howe do I begin to grow my business when I can't get caught up?

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Business Leader


Hey @LeaF205791 

 

Thanks for your question and for being out there working hard to create new jobs.  

 

Your situation is NOT uncommon and I wish I had a really easy answer to make everything better.   Once you have completed the 'start up' phase and feel that you have your operations in a good spot, it ALWAYS comes down to getting that one more customer.  There is no ONE right answer, but finding what works in your community is the key.   

 

In your industry, you need people to actually come in your store.  Typical internet marketing, social media, and ad campaigns are most likely NOT the best approach.   You should consider specific marketing ideas in your specific community.   Partnering with the local High School could be a great idea.   Partnering with local fitness outlets such as 24 Hour Fitness, CycleBar, Yoga fitness shops, etc. can be a great opportunity.   Try and do the math that works for initial discounts for specific outlets.   Again, the options that seem to work best are those that provide convenience so those that are closest to you will tend to be the best. 

 

Specific marketing options targeting those specific people could provide a bump in your repeat customers.   

 

Those are just a few ideas, and without sitting down with you it would be difficult to prepare a formal plan....but the key is keep trying things until you find that ones that work.  It has to be more than just opening the door and providing a great product, but also less than a major wide broadcast campaign.  Be specific and targeted.   Download a map of all businesses within say a 5 min drive of your spot.   Then list each one and try and identify what THEIR clientele look like and when they come and go to those locations.  Try and prioritize which of those customers would be your best customers and that should result in your To-Do list of who to contact and in what order. 

 

I hope this helps even if it is less than magic.  Keep trying....Don't give up....But also, DON'T just wait behind the counter for people to show up.  Keep me posted on your success, of which I have no doubt!!!

 

Keith 

@LeaF205791 wrote:

 Thank you for taking my questions.  I opened a juice, smoothie and create your own salad bar in December 2018. I exhausted my pension in the start up kid the business. Now, I find that I can't keep up with the expenses eventhough the business is doing well. 

My question is Howe do I begin to grow my business when I can't get caught up?


 

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Newbie

Yes! Looking for best options to secure start up costs for mostly advertising. Thank you.

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Hey @RogerL547490 

 

Sorry for the delay in my response, but somehow I just didn't hit "Post"   Maybe that is why I am not a business technology coach, hahaha!!!

 

The good news is that there are lots of options for startup funds even if many of the options may not be that easily obtained.  The first key point is how much do you need for your advertising goals since the level of funding will get more and more difficult the more that you need.   

 

My first recommendation is to apply for as many grant programs as you can find.   There are many organizations that have grant programs for small startups.  Most require a business plan, financial projections, etc. along with their own applications.   The grant option is the first choice since it is the least expensive source of funding in that your cost is only measured in your time. 

 

Second, you should consider on line crowd funding options.   This is becoming much more popular for the smallest of funding needs and seems to be getting more streamlined as more potential investors commit to the concept.   As with the grant option, make sure you have your "pitch" ready.   Make sure your '60 second' story is detailed yet concise.   Make sure your business plan or "pitch deck" is ready.   Be specific!  This option is the second choice because it may be more expensive than most, but only if you are successful.  If you are willing to take on an equity investor or investors it will be less expensive now, but in the long term could be even more costly.   

 

Third option would be to consider applying for a loan to fund the costs that you are considering.  The SBA has several secured lending options that can be helpful that are basically administered by local banks.   Find your local banker that works with an SBA preferred lender which means that can make the small business loans with the SBA guarantee.   This option may be the best option is you are unwilling to allocate an equity piece to secure the funding.  This will certainly be more expensive than the grant approach, but may be less expensive in the long term than finding an equity partner.  

 

A fourth option that is considered by many new small business owners is to invite friends and family to "invest" in your new venture.   In many cases this is the easiest approach and may require the least effort and the least paperwork.  At you might guess this is NOT my favorite approach.  If this is an option that you will consider, make sure that you put everything down in writing.   Get everyone to sign everything and make sure the idea and the assumptions are clear to all parties.   The best time to get everything out on the table is at the very beginning.  Regardless of your level of success or failure, most parties will remember things differently in the future....so make sure the deal is clear, in writing, and that everyone is on the same page.  

 

I hope this gives you some places to start.  Let me know if you need more detail or if you would just like to discuss further. 

 

All the best,

Keith

@RogerL547490 wrote:

Yes! Looking for best options to secure start up costs for mostly advertising. Thank you.


 

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Newbie

We are in a cutting edge business.  We produce Hemp Cigarettes.  Since the passing of the 2018 Farm Bill, Hemp is legal but the credit card companies have been inconsistant about working with us.  Several time they have keep our funds.  Any advice on how we can have an online store and people pay us?

Smokes, original, menthol and now with KratomSmokes, original, menthol and now with Kratom

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Business Leader


Hey @PamL728782 :

 

Thanks for your question and for creating new jobs and new industries.   

 

I agree with you in that, no doubt you are part of building a new industry.   The great news about being part of a new industry is being first....which usually means good things ounce you have everything figured out.   It is the old saying about being in on the ground floor.   So well done!!!  

 

The down side of the ground floor and being among the first to build something new, is that you have to clear all of the pot holes and hurdles that future owners will take for granted.   This new industry is certainly intriguing and it is difficult to predict that it will be anything other than HUGE.   As you already know, the major issue right now, is the difference between State laws and Federal laws.   We have only been struggling with States versus Federal for about 250 years and it’s not likely to end any time soon.   So part of my advice to always be aware of both…you still have to meet both and satisfy both as you and your peers endeavor to figure this out. 

 

There are more ways to move and collect money now than at any time in history.  Entreprenueur.com has a great article reviewing the top 15 online payment methods will some significant detail.  Here is direct link to their article that is a great place to start.  

 

https://www.entrepreneur.com/article/286006

 

You can also simply “Google” “Online Payment Systems” to other detail for multiple options.   Setting up multiple payment options for your customers can be a great marketing tool as well as a financial tool.   As you build this model, it would be a good idea to work with a number of these options to leverage your own future regarding which of these will indeed take the  lead in this new industry.  

 

I do not have a crystal ball nor do I pretend to understand the intricacies of this new industry, but I do believe that new laws and new processes will be addressed at both State and Federal levels.  For today, having as many options available will put you in a better position to react to whatever comes down the path from a political standpoint in the next few years. 

 

I hope this helps and let me know if you need more detail or if you would like to discuss further.

 

All the best,

 

Keith

 

@PamL728782 wrote:

We are in a cutting edge business.  We produce Hemp Cigarettes.  Since the passing of the 2018 Farm Bill, Hemp is legal but the credit card companies have been inconsistant about working with us.  Several time they have keep our funds.  Any advice on how we can have an online store and people pay us?

Smokes, original, menthol and now with KratomSmokes, original, menthol and now with Kratom


 

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Hello! Keith Hall,

 

My Husband, Has a failing business again.

We did have 3 brick and mortar locations. I had gotten sick and now of course it is my fault. But we are losing everything. We are down to 1 location and sales are falling off greatly. Which I can not understand because we have a lot of warranty service for a multitude of companies. There does not seem to be a reason for the slumps. Please! Send help!

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Hey @MischelleM338817 

 

Thanks for your post and I am so sorry to hear about your struggles.  I wish I had an easy answer on how to turn things around for you guys.

 

I believe the first key point here is to try and figure out the reason or reasons for the change in your business.   Sit down with your husband and go through all of the details.  Try and find a place away from the norm...get away from your daily routine even is just taking a picnic to a park....but get away from everything else and just focus on the changes that have occurred over the last few years. 

 

You mentioned that part of the issue could have been personal (an illness) but most likely there are other circumstances as well.   Do your best to identify the critical things that have changed.   You mentioned that you don't understand the slumps, but we have to sit down and figure those out.  Once you have done that, then we can evaluate whether or not those factors are permanent or if they can be fixed.

 

If the issues you guys can identify are fixable, then we can build a plan to reinstate the model that is based on rebuilding the business that you have been so proud of.  If those factors are not fixable such as personal issues that are not likely to get better or market conditions that have fundamentally changed your industry, then we may have some more difficult choices.   

 

I hate adding tired old adages to these conversations, but it is difficult to expect different results when you keep doing the same things....So let's start today, doing things differently.  Start with that offsite meeting to have a heart to heart with your husband about the business and about the things that have changed within your business.   From there we can re-focus on your goals and your short term and long term plans.  

 

I wish my answer was better and I wish I had some great magic to share but as you already knew this process is not an easy one.  Try and stay focused on the specific business issues you are facing and try and separate the personal ones.   Then let's get back together and see where we are.  

 

Best of luck and I will be here to help in any way that I can.

 

Keith

@MischelleM338817 wrote:

Hello! Keith Hall,

 

My Husband, Has a failing business again.

We did have 3 brick and mortar locations. I had gotten sick and now of course it is my fault. But we are losing everything. We are down to 1 location and sales are falling off greatly. Which I can not understand because we have a lot of warranty service for a multitude of companies. There does not seem to be a reason for the slumps. Please! Send help!



 

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Newbie

 Thank you so much Coach Keith Hall for joining and offering great sound advice.  So I do not have a business as of yet but I have some really phenomoenal business ideas or inventions.  I don't have a clue on how to get started.  I would like to either get them trademark or a patent on the idea.  I don't necessarily want to develop the idea but want to get paid of the royalties of the idea, etc.  I just don't how to get started.  Is there any way you can tell me how I should get started and is there any reward for just the idea?? If not then what do suggest I do to get it promoted or investors to invest to create it and make it happen?  A lot of questions I do apologize but need to now how to get started.

 

Thank you for your advice and suggestions.

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Hey @JanA818181 

 

Thanks for your question and always remember that most great small business ventures start with an idea.   So you are right on tract.   First key point, is ABSOLUTELY YES, there can be a financial reward and a level of satisfaction just from the idea even if you are not involved in the production or marketing.  As you would probably guess, the level of the potential reward as well as the level of risk will be much lower if you are only marketing your idea…but it is certainly possible. 

 

If you have decide that is the path you wish to take, then I think your original instincts are correct in that you should invest some time and money in securing patents or trademarks for your ideas.  It would be a great idea to sit down with an attorney in your state who specializes in that type of legal practice just to make sure your ducks are in a row.  I hate that my first thought is the worry that someone who do something less than ethical in dealing with another small business but I have heard way too many horror stories over the years. 

 

During that process, it will also be beneficial to visit with the attorneys that you interview about options for taking your idea to “market”.   Most of them will have experience in going from patent to production to market and may be able to get you in contact with another of their clients who has done the same thing.  In addition to that, there are many companies who specialize in helping with that process.  Again, before contacting any of those guys, I would sit down with the attorney just to make sure everything is in order.  

 

As you might also have guessed, doing everything you can to win this contest and get one of those spots with Daymond John would be awesome!!!

 

I hope this helps and gives you an option for moving forward.   If you need more detail or would just like to visit further, just let me know.

 

All the best,
Keith

@JanA818181 wrote:

 Thank you so much Coach Keith Hall for joining and offering great sound advice.  So I do not have a business as of yet but I have some really phenomoenal business ideas or inventions.  I don't have a clue on how to get started.  I would like to either get them trademark or a patent on the idea.  I don't necessarily want to develop the idea but want to get paid of the royalties of the idea, etc.  I just don't how to get started.  Is there any way you can tell me how I should get started and is there any reward for just the idea?? If not then what do suggest I do to get it promoted or investors to invest to create it and make it happen?  A lot of questions I do apologize but need to now how to get started.

 

Thank you for your advice and suggestions.


 

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Hi Keith, 

I make dessert spring rolls. My dilemma is finding a co-packer that can manufacture them for me. I have potential clients, but I currently cannot meet the demand, as I make them myself. I have contacted all listed co-packers (lists from various states), no success. How can I get over this hurdle?

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Hey @CynthiaW254296 

I am embarrassed to say that my first thought is that I am really hungry now.   As soon as we get your production process underway, I need to try them.   Yum!!!

 

I wish I had an easy answer to your dilemma, but it sounds like you have spent a large amount of time searching the “normal avenues” for a production partner.   I am surprised that you haven’t found someone that you can work with….Is it your understanding that the potential partners are uninterested due to expected volume?  Or perhaps competing products?  It would most likely be useful to spend some time trying to figure out why they are not interested in working out a deal for at least a short period of time. 

 

I am totally guessing here and I certainly don’t know who or how many potential partners you have talked to, but finding out the issues they have could be very useful in finding your partner.  Volume?  Price?  Timing?  Costs of production?   If we could figure out why they seem to have little interest that would be very useful.

 

As an alternative, looking in new places…finding other small businesses that are just starting out would be a great idea.  Networking through websites centered on cooking or baking or food prep, concentrating on other maybe “work from home” new small businesses would be a good place to get started.  Networking through your local Chamber of Commerce or your local Small Business Development Center could help you find other small businesses who are trying to get started just like you.   Likewise, association of small business owners like the NASE as well as the National Small Business Association (NSBA), and the National Association of Women Business Owners (NAWBO) are all great places to find other small businesses looking to grow.   Those small businesses may not be listed on the State’s registers and such.   Most likely those new small businesses will be more “hungry” (sorry for the pun) for new business and to “give you a try”. 

 

I hope this helps and gives you an option for moving forward.   If you need more detail or would just like to visit further, just let me know.

 

All the best,
Keith

@CynthiaW254296 wrote:

Hi Keith, 

I make dessert spring rolls. My dilemma is finding a co-packer that can manufacture them for me. I have potential clients, but I currently cannot meet the demand, as I make them myself. I have contacted all listed co-packers (lists from various states), no success. How can I get over this hurdle?


 

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Newbie

I just entered the contest.  I am an independent distributor for a great company called Reliv International.  It is a food science company with amazing supplements and recently started selling CBD products a few weeks ago.  I believe our company will shine when people choose to use CBD as we have a great reputation for using the highest quality ingredients and we also do a lot of research.  Once the CBD is regulated, many of the other companies will be shut down.  I have been with the company for 16 years and at one tme, I was making $12000 profit a month.  The economy took a dive and many people dropped off and I have not been able to build my business back up to what my potential is.  My goal is to make $50,000 a month within 2-3 years. I want to do advertising, but I do not have a lot of funds to do that at this time.  I do attend networking meetings weekly and pick up new customers weekly.  I just read the article written by Daymond John and found it very informative.  I would like advice on how I can recruit business builders.  Most of the time, my happiest customers become the best distributors, but I was thinking with the announcement of the new CBD products, this would be a great opportunity for a lot of people to make some really good money working from home. I just earned my 50th all expense paid trip and I am going to Maui in October.   

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Business Leader


Hey @rb44895526 :

 

Thanks for your question and congratulations on your success with Reliv International.  I agree that this industry, although the concept is not new, is in its infancy.   There are certainly more regulations and shake ups to come, but those companies who set the standard and clear all those hurdles that are sure to come will be in line for significant success.  I can tell you believe Reliv is that leader so maybe you are in exactly the right spot.  

 

I also believe that you have answered your own question within your question.   You mentioned that Reliv is "a great opportunity for a lot of people to make some really good money working from home" and "my happiest customers become the best distributors".  Those two statements (both of which I agree with) would indicate WHERE you should look for your best business builders.  Stereotypical advertising may not be the best approach.  I would recommend concentrating on social media, blog posts, and other places that are visited by stay at home parents, fitness buffs, nutrition sites, where you can raise awareness but at the same time promote your business plan.  Detailing the process,how much time is involved, the up front investment, average success of a new associate, etc. should all be part of your outreach.  Remembering that your best business bulider will always be that individual that believes in the product the way that you do. 

 

Overcoming the potential stigma of CBD in some circles will be a challenge but this is certainly something that has been in the news and most are aware that it will become mainstream at some point.  Concentrating on your personal contacts, referrals from existing assoicates, telling your story will always the best approach in building your personal network back to where it should be.  I don't believe general broad advertising will fit your needs, but one on one posting, responses, reaching out through sites dedicated to small business income growth is the way to go. 

 

I hope this helps and let me know if you need more detail or if you would like to discuss further. 

 

All the best, 

Keith

@rb44895526 wrote:

I just entered the contest.  I am an independent distributor for a great company called Reliv International.  It is a food science company with amazing supplements and recently started selling CBD products a few weeks ago.  I believe our company will shine when people choose to use CBD as we have a great reputation for using the highest quality ingredients and we also do a lot of research.  Once the CBD is regulated, many of the other companies will be shut down.  I have been with the company for 16 years and at one tme, I was making $12000 profit a month.  The economy took a dive and many people dropped off and I have not been able to build my business back up to what my potential is.  My goal is to make $50,000 a month within 2-3 years. I want to do advertising, but I do not have a lot of funds to do that at this time.  I do attend networking meetings weekly and pick up new customers weekly.  I just read the article written by Daymond John and found it very informative.  I would like advice on how I can recruit business builders.  Most of the time, my happiest customers become the best distributors, but I was thinking with the announcement of the new CBD products, this would be a great opportunity for a lot of people to make some really good money working from home. I just earned my 50th all expense paid trip and I am going to Maui in October.   


 

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I am a small business woman who wears too many hats.  I don't have a large budget, what's the best way to gain staff?  I have hired my part-time nephew to help with the instagram, facebook, marketing.

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Hey @fredbganita :

 

Your question is a very good one and one that includes a level of faith in creating new jobs to help your business grow when you budget is tight.   First of all, congratulations on your plans for growth and always remember that you are not alone.  

 

Hiring family employees, as you mentioned, is a great place to start.  They can provide flexibility and generally be less expensive and less likely to generate "employee Issues" down the road.   I am certainly NOT recommending that you hire family members soley because they are family members, but if their skill set meets the needs you have, it is a great idea. 

 

With a tight budget it is also a good idea to consider part time employees and mabye even better to consider independent contractors that can provide the same services.   The best part about independent contractors is that you can hire them for specific projects or time frames without a longer term committement.  When the budget gets a little more healthy then you can always go to a full time employee if you need more control over the work product.  

 

Finding a good source for independent contractors is easier now thane ever before thanks in part to tecnhology.   Sites like CrowdSource.com, UpWork.com, PeoplePerHour, and many others can provide an almost unlimited pool of talent for almost any task that you have.  

 

I hope this gives you a few ideas for taking that next step.  Keep up the good work and congratulations on creating new jobs!!!

 

All the best,

Keith

@fredbganita wrote:

I am a small business woman who wears too many hats.  I don't have a large budget, what's the best way to gain staff?  I have hired my part-time nephew to help with the instagram, facebook, marketing.


 

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  1. Who's-done-it software driven stage play where the conclusion, being driven by the software, is always different. Audience plug their guesses, and their bets, into their iPhones before the final act. I have no luck finding a playwright who'd work with me on this stage play.
  2. http://GuitarInstructorPro.com
    Guitar players teach the guitar robot how to play their songs, and users - students - learn how to play them. They can select regions of their choice to loop them and to slow them down for better learning experience. How do I find someone who'd go with marketing that idea and handling financial its aspects.

Thank you,

Eugene

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Hey @EugeneS485292 :

 

Sounds like two very interesting ideas.  This may sound like a shameless plug for this program, but having an opportunity to sit down with Daymond John and discuss the marketing implications of each of your ideas would be a home run.   I would strongly encourage you to do your best to win this contest!!!

 

Having said that, technology has put us in a better position to find potential partners than ever before.  I know it sounds trite at this point, but networking your ideas through social media, on-line chat boards, blogs, and via group contact sites like FaceBook and Linked In can help you find anyone anywhere in the world.   Typical places for talent in these fields (music and entertainment) can be found in Nashville, Los Angeles, Austin, Boulder and other places as well.   Concentrating on those physical locations would be a plus.  I wish we had a list of professionals that you are looking for to "hook you up", but unfortunately we don't have that at this point.   Again, I wish this was a better answer for you, but the best advice is to commit your time to posting on line, searching chat rooms, and letting your requests be clear and concise in as many locations as possible.  

 

If you haven't completed a formal business plan that would be a great first step.  There are literally thousands and thousands of great ideas out there, but very few have completed their "plan" and are prepared to share that plan with potential partners.  Once you find an interested party, you may just have one shot at getting them interested for good.  So make sure you have your "pitch" down to less than a minute, which can be difficult.  If your interests include sharing an equity position with you new partners, make sure that is clear in that first sentence.  In other words, let your posts and your outreach include the basics of the "deal".  For most people, the interest will be higher if they are part of the deal as opposed to just being paid for services.  I would also encourage you to separate the two ideas.  Don't pitch them together as a "pick one" concept, but pursue key partners for each one separately. 

 

I hope this helps even if if wasn't the answer you were looking for.   Keep up the good work and let me know if you need more detail or if I can help again. 

 

All the best, 

Keith

@EugeneS485292 wrote:
  1. Who's-done-it software driven stage play where the conclusion, being driven by the software, is always different. Audience plug their guesses, and their bets, into their iPhones before the final act. I have no luck finding a playwright who'd work with me on this stage play.
  2. http://GuitarInstructorPro.com
    Guitar players teach the guitar robot how to play their songs, and users - students - learn how to play them. They can select regions of their choice to loop them and to slow them down for better learning experience. How do I find someone who'd go with marketing that idea and handling financial its aspects.

Thank you,

Eugene


 

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Hi Keith,

 

Although I've been selling real estate in California since 1999 and was a top producer, I formed my own company in 2008 (s corp) but never hired anyone as I was happy being a small independent.

I want to begin expanding, working with the next generation and need to know how to strategically and financially utilize being a corporation.  I plan to operate brokerages out of California and Hawaii (last year obtained my Hawaii broker's license).

 

Thanks!

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Hey @HICAREBROKER :

 

Congratulations on your real estate success.  It sounds like you are making a difference for a large number of families and I am happy to hear that you are ready to expand and create even more new jobs.  Well Done, and keep up the good work.

 

As you probably already know, the S Corporation entity form is a pass through entity form, so the corporation itself will not pay any federal income tax.  Instead, the income from the S Corp passes through to your personal income tax return.   So the S Corp concept is NOT a tax savings idea, and the overall federal income tax that you pay will be about the same.   However, one benefit of the S Corp form or organization is that some of that income from the S Corp can potentially pass through to your personal income tax return as “unearned income” and therefore is NOT subject to FICA and Medicare. 

 

The hard part here is that since you are providing services to the S Corp and certainly some of the earnings from the S Corp are indeed due to your personal efforts, you DO need to pay yourself a reasonable salary for those services.  Those wages will be subject to FICA and Medicare.   But the trick is once you have determined that reasonable salary, any amount of income over that amount is NOT subject to FICA and Medicare tax.  

 

For example, If a sole proprietor real estate agent earned $120,000 of net income from self-employment, they would pay approximately $15,000 in SE tax (which is the same as FICA and Medicare).  But if that same real estate agent were operating as an S Corp, and determined that a reasonable salary were, say, $80,000, then the extra $40,000 would still be taxable income but would not be subject to SE tax or to FICA and Medicare tax.   That could be a savings of about $6,000 just in SE tax.   Keep in mind that you CAN’T just arbitrarily set your salary at $80,000 or some random percentage of the S Corp income.   The salary must be reasonable.   For an S Corp that only has ONE employee, YOU, and the type of income that is based on personal services, like real estate sales, it is difficult to make a case that any of the income from the S Corp is derived from any other source than YOUR personal efforts.  So taking this stance when it is JUST you is a bit aggressive, and a stance that I would NOT recommend.

 

However, now that you will have multiple operations and multiple locations and other people generating income for the S Corp, the concept of some of your income characterized as unearned income makes TOTAL sense.   When setting your “reasonable salary” try and find as much third party support as you can…how much to other people working for real estate companies make.   The more independent third party support for the salary, the better. 

 

The most common benefit of the corporation form of operation is to provide some legal differentiation for the owners from the business.  The primary benefit here is limited liability for the owners.    In order to secure this benefit, make sure that you treat the business like a business.   Make sure all of your personal stuff is separated from the corporation business.   Make sure you have separate bank accounts, and record keeping.  Don’t pay personal stuff out of the business account.   Always keep it clean and neat.  If something bad happens, the attorney types are gonna try and show that this isn’t a “real” company, but just as extension of your personal activity.   Hopefully, that never comes up, but if it does you will be glad you paid attention to the detail. 

 

Let me know if you have other questions about your S Corp or other things that I might be able to help with. 

 

Again, keep up the good work,

Keith

 

@HICAREBROKER wrote:

Hi Keith,

 

Although I've been selling real estate in California since 1999 and was a top producer, I formed my own company in 2008 (s corp) but never hired anyone as I was happy being a small independent.

I want to begin expanding, working with the next generation and need to know how to strategically and financially utilize being a corporation.  I plan to operate brokerages out of California and Hawaii (last year obtained my Hawaii broker's license).

 

Thanks!


 

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Hi Keith,

Thanks for your response!

1. If I wanted to amend my articles of incorporation to converting to a 501 (c) (3), what are the advantages, disadvantages?  (My intent is to help fund ministries, specifically churches and YWAM-Kingdom Builders).  I'm trying to figure out if it's better to file as a 501 (3) (c), or simply donate.

2. What do I do with the stock shares?

3. If becoming a charitable corporation, would there be allowable expenses as a non 501 (c) (3)?

4. If we wanted to host a poker tournament once or twice a year and winnings were under $5K, would cash or trips be a better prize in terms of a write off or would it be the same?

5. If medical, dental and vision benefits were offered to the agents, is that a write off? 100%

 

Thanks again,

Annette

 

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Hey agian Annette  @HICAREBROKER

 

The first key point to remember here is that converting from a regular for profit corporation to a formal NON profit corporation is a complete change in direction and even completely different forms with your State's, Secretary of State, different bylaws, different everything.   My first recommendation would not be to "convert" but to start completely fresh with a brand new entity.   Also remember that forming the non-profit organization with your State is also a completely different process than applying for tax exemption under Internal Revenue Code Section 501(c)(3).   So two totally different processes!!!

 

The main difference between your existing corporation and the non-profit corporation is where the money goes at the end of the day.  Under the non-profit corporation there are no shareholders or owners who benefit from the net income of the non-profit.   The true equity or ownership rests with “members” or the general group that is benefiting from the purposes of the organization.   So at the end, no profit or money goes to those owners.   That doesn’t mean that the founders or workers cannot be paid for services, but there is no “ownership”.   If the proceeds are going straight to the missions and churches that you want to help, it may end up being much easier to just donate the funds directly.  

 

From a tax standpoint, there general rule would still be the same.  Remembering that the entity is intended to tax exempt, so there is no longer a concern of what is deductible or not since there is no tax.   However, the concept of WHAT can be paid by the new entity will still be the same.  That is the expense must be ordinary and necessary for the business and must also be reasonable.   The expense of the “poker tournaments” would have the same guidelines.   Providing cash prizes may be in violation of state laws which is something you should look into first.   Providing prizes for drawings or winning would most likely be different for your state as well.  Again, that will be specific to your charter and to your state. 

 

Providing benefits to employees would certainly be a reasonable expense.  The plan would need to be non-discriminatory.  If you are thinking of providing benefits to NON-employees (agents) that would be trickier and most likely something you should avoid.   Providing benefits to non-employees, at some point could cross a line and the workers could be deemed employees in retrospect which would be a disaster.   So be very careful in providing employee type benefits to NON employees. 

 

I know that is a lot of detail so let stop and give you a chance to breathe.   Let me know if any of that makes any sense.


Keith
@HICAREBROKER wrote:

Hi Keith,

Thanks for your response!

1. If I wanted to amend my articles of incorporation to converting to a 501 (c) (3), what are the advantages, disadvantages?  (My intent is to help fund ministries, specifically churches and YWAM-Kingdom Builders).  I'm trying to figure out if it's better to file as a 501 (3) (c), or simply donate.

2. What do I do with the stock shares?

3. If becoming a charitable corporation, would there be allowable expenses as a non 501 (c) (3)?

4. If we wanted to host a poker tournament once or twice a year and winnings were under $5K, would cash or trips be a better prize in terms of a write off or would it be the same?

5. If medical, dental and vision benefits were offered to the agents, is that a write off? 100%

 

Thanks again,

Annette

 


 

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How do I seek funding for my small nonprofit

 

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Hey @vitfriends01 :

 

Thanks for your question and congratulations for being part of the most powerful economic force in this country...small business.   Don't forget that over 70% of all new jobs come from small business owners just like you so keep up the good work.  

 

Funding a new verture can be very challenging but there are certainly many options.  The first key question is how much funding do you need to meet your initial goals?  And more importantly, what will you use that money for and how will your funding source be repaid or rewarded?   These questions point direcfly to your business plan and to your expected exit strategy.   Obviously, the more money that you need to meet your goals the fewer options you may have.  

 

If you need only a modest amount of capital, you might consider an online option of "crowd funding".  There are a number of options that allow a large number of small investors to review your plan and then to contribute to your overall funding needs.  This is becoming a more and more popular method of funding new ventures and you should consider that path.  Again, make sure you have all of your ducks in a row before "signing up".  Make sure your numbers make sense and are part of an overall business plan that is clear and conside but also detailed enough so that interested investors will have confidence in the fact that you have done your homework.  

 

Since you are planning to operate a non-profit, many of the traditional funding options may be limited since the return will most likely be limited to potential investors.   That may mean that your best option would be in the form of debt rather than securing an equity partner or partners.   If debt is an option, starting witht the Small Business Administration will be a great idea.   They have a number of debt programs, based on how much you need, that are guaranteed by the SBA and can therefore be somewhat easier to secure through a qualifited SBA lender.  Again, make sure your business plan and long term financial projections are in place before you make any presentation.  

 

Lastly, and also depending on how much you need, you should search for various sources of grant money.   There are literally hundreds of organizations that provide grants and assistance to new ventures.   Again, the key here is the amount you need and the specific industry or need that your non-profit is expected to meet.   Doing an online search for grants and financial assistance can get you started on that process.  

 

I hope this helps and let me know if you need more detail or if you would like to discuss further. 

 

All the best

Keith

 

@vitfriends01 wrote:

How do I seek funding for my small nonprofit

 


 

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I have a unique invention that must be used with every prescription bottle and over the counter medicine. It saves thousands of lives and billions of dollars every year. If is easy to manufacture, deploy and use. It is ideal for all types of medicines such as pills, liquid, drops, injections or enhalers - no more lists or pillboxes. Want assistance in introducing it to key people for business ventures. 

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Hey @Zafer 

:

It sounds like you have developed a great product with outstanding long term potential.   This is a great spot for you to begin with this program and the opportunity to sit down with Daymond John to discuss long term options and support.  I would strongly encourage you to complete your application and do all that you can to win this contest.  

 

From a practical standpoint, make sure you have completed whatever patent options or trademark or documentation that would be appropriate for your idea before you visit with investors or move to the next level.   It would be a great idea to spend a little bit of time and money with an attorney just to make sure you have all of your ducks in a row before sharing your long term plans.   And speaking of that, take a good look at your business plan....check your math and make sure you have done your home work on market conditions, potential competing products or ideas just so you are ready for those types of questions.  If you don't have a formal business plan or "pitch deck" now is the time to put that all together.   Be specific and detailed.   Make sure you are including financial information regarding costs of production, breakeven analyses and long term potential operating profits.   Yes, they are all guesses, but you gotta have an idea of where you are going if you ever wanna get there....so again, be detailed and specific. 

 

I hope this helps and let me know if you need more detail or if you would just like to discuss further.  

 

All the best,

Keith

 

 


@Zafer wrote:

I have a unique invention that must be used with every prescription bottle and over the counter medicine. It saves thousands of lives and billions of dollars every year. If is easy to manufacture, deploy and use. It is ideal for all types of medicines such as pills, liquid, drops, injections or enhalers - no more lists or pillboxes. Want assistance in introducing it to key people for business ventures. 


 

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Enter the Make Your Move Career & Entrepreneur Contest for your chance to win a Power Meeting with Shark Tank’s Daymond John.

 

NO PURCHASE NECESSARY. Contest ends 9/15/19. To enter and for Official Rules, visit https://sweeps.aarp.org/enterdaymond2019.

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Keith Hall is the President and CEO for the National Association for the Self-Employed.  He previously served as the National Tax Advisor for NASE where he offered tax advice to persons self-employed and micro-business owners. He is a certified public accountant and has been featured in The Wall Street Journal, The New York Times, The Washington Post and Good Housekeeping.

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How do I ask a question for Keith?

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