What Is A Limited Liability Company Or LLC?
An LLC is a legal form of business that has characteristics of both corporations and a partnership. This form of business offers limited liability protection to its owners. In other words the owners of the business cannot be held fully responsible for any debts that the business occurs or actions taken on its behalf. This type of business form is best suited for small businesses with that have a small number of owners and preferably just one.
So what are some of the basic characteristics of a Limited Liability Company? Well for starters the owners of an LLC are not partners or shareholders like they are in other forms of business they are members and every LLC has to have at least one member. Members of an LLC cannot be held personally liable for the debts of the company. This is the same as for a corporation. Just don’t make the mistake of signing any documents where you provide your personal guarantee that the company will pay a bill or honor an agreement. If the company for some reason does not pay that bill or live up to an agreement then you can be held liable.
So just like a corporation you as an owner can use an LLC as a form of protection for your personal assets. And depending on the type of business you want to form this can be extremely important if something were to happen. Because being an LLC also provides you with legal protection in case the company was to be sued for some reason. Sometimes being protected from your business is the most important thing of all.
Now how is a Limited Liability Company like a partnership? Plain and simple it’s all in the taxes. LLC’s are not subject to the double taxation rule imposed on corporations. To explain this rule is easy. If your business is a corporation and you make a profit for the year that profit must be taxed. After the profits are taxed then you as the owner may take the profits and issue them to yourself as the owner and any other people that own a percentage of the business. This of course is your dividend. Well the IRS views the dividend as personal income and it is again taxed as part or your personal taxes. In an LLC the profits are not taxed. They are distributed to the members based on whatever percentages have been previously worked out. Then they are only taxed as personal income when that person files their taxes for the year.
Also if the business loses money for the year all members of the LLC can deduct the equivalent loss percentage from their income. You’ll of course need supporting documents to prove the loss to the IRS. And if the members do want to leave their profits in the company for business purposes then the Limited Liability Company can file a tax return of its own.
What most people gain that form a Limited Liability Company is flexibility. You can structure the management however the members see fit. You have the protection of a corporation for your personal assets. And you can elect to either leave your profits in the company, have them taxed or the profits can be distributed and the members can pay the taxes themselves. But you avoid the double taxation penalty that corporations can incur.
Cash Miller is an experienced entrepreneur and speaker who has spent over a decade as a small business owner. His years of experience in small business cover a variety of topics. If you are looking for more small business help please check out http://www.smallbusinessdelivered.com
Why Creating An LLC As A Single Member LLC Is Better Than A Sole Proprietorship
When creating an LLC as a single member LLC, the business owners gains 4 significant advantages over a sole proprietor business structure. With the costs of starting and maintaining a limited liability company being so minimal, most lawyers and CPAs would advise on the use of the single member LLC. . . it is a protection vehicle and does not create any added complexity when it comes to operations and taxes.
PROTECTION FOR THE MEMBER OF THE SINGLE MEMBER LLC
A limited liability company provides a legally enforceable shield protecting you personally from the obligations and liabilities of your business. If anyone ever wanted to file a lawsuit against your business, then you would not be personally liable just because you are the owner. If you run your business as a sole proprietorship, you are inextricably part of the business and so you become the target of anyone who has a claim or wants to make trouble for your business. You cannot avoid this personal liability in a sole proprietorship. You need a single member LLC.
Do not think that given the nature of your business, a lawsuit is unlikely. Business lawsuits are now an epidemic in America. The more your business interacts with others, the more likely there could be a claim.
So, any third party, whether it be a customer, a service provider, contractor, employee or anyone who just visits your business is a potential threat..
Now, you can start to think through the chances of who can sue you but instead, try to understand what lawsuits are all about. They are about money. If your business becomes successful, your chances of lawsuits are higher because you will be getting and keeping more assets.
Instead of justifying or hoping you never get sued as a sole proprietor, it is better to ask whether paying the few hundred dollars to create and maintain an LLC each year is worth having this protection. Check with your specific state to see what specific fees apply when it comes creating an LLC and maintaining it on file each year.
NO ADDED COMPLEXITY WHEN IT COMES TO OPERATIONS OR TAXES
From an operational perspective, a single member LLC can operate his or her business in almost the same way as a sole proprietorship with a few exceptions.
When creating an LLC, the entity should have a simple operating agreement in place but otherwise, there are no legally required formalities like meetings and written approvals as there are with corporations. Maintenance is minimal.
When conducting business, it is very important to make clear to all parties that it is the LLC that is the business. This usually means including your LLC business name in all your written material (marketing material, advertisements, contracts).
For a single member LLC, there is no difference in how the business reports and pays federal income taxes . A single member LLC is disregarded by the IRS for tax purposes only and so you pay taxes using the exact method of rules for sole proprietorships. By operating a single member LLC, you get all the advantages of the limited liability company as a business vehicle without any added difficulties when it comes to income taxes.
PROFESSIONAL AND TRUSTWORTHY IMAGE
Customers today are skeptical when it comes to choosing who to do business with. One method in which they distinguish a legitimate businesses from others is when they see that a business is being run through a formal legal entity such as an LLC.
Let us face it. Most of the business scams and fly by night businesses out there are sole proprietors. Their goals are to take money from unsuspecting victims. Many will not go through the process of setting up a formal legal entity for their scheming plans. It is so simple to put forth a business name to the public and allege that you are running a business. This is all that is required for a proprietor to start.
Many customers recognize a business that has taken the steps involved with creating an LLC likely has intelligent and serious owners behind it. A single member LLC business generally portrays more trust and professionalism over a sole proprietor running the same business.
Of course, there are many legitimate and respectable sole proprietor businesses out there but for the potential customer it is difficult to ascertain which ones are for real and are trustworthy. It helps a lot when customers see an LLC designation after a business name. Creating an LLC can makes it easier to launch your business and get those customers.
For more FAQ information about the LLC v. Sole Proprietorship, visit the LLC Expert Learning Center at http://www.TheLLCExpert.com
Good Young Entrepreneurs Have…
What makes young entrepreneurs different from the rest is that they found out what naturally suit them early on. They have realized that they have the potential and not to be under any superior who will give them orders.
Today, the number of young entrepreneurs is growing. There are those who planned their course ahead of time and went on being one after all factors have been considered. There are also others who have worked for another person but realized later on that they want something they can call their own.
It can be noted that young entrepreneurs share the same ideals and characteristics. Even if they are of different nationalities and are handling different kinds of business, they have more or less the same aspects that made them successful in their careers.
What are some of the characteristics that make young entrepreneurs what they are?
1. Bigger aspirations.
It is said that every success starts with big aspirations or dreams. Young entrepreneurs dare to dream big. This is the inspiration that push them to do everything they can so that they will achieve their goals.
If you want to be a successful entrepreneur, start having big aspirations. From there, you can start planning out strategies on how to get there. Nobody is saying that the going will be easy. There are challenges along the way. Focus on your dream and motivate yourself to get past the obstacles.
In the world where everyone seem to have more or less the same dreams, make sure that you will make a change so that you will rise above the rest.
2. Love for the job.
For your dream to become a reality, you have to always believe it will soon be. To do this, you need to be passionate about what you do. You have to feel better from the start up until the end of the day.
Do not get stuck in a profession that does not interest you. Find the one that you love doing so that you are not forced to wake up in the morning just because you are obliged to.
Young entrepreneurs have found their passion early in life. After that, all the things they do complement what their passion is.
3. Thirst for new knowledge.
The most successful people are not always the ones that finish their education and have degrees. Studies have shown that most of those who are successful in their careers are just average persons. Some are not even of extraordinary intelligence.
Their secret?
These people are willing to learn. They have in them a hunger for more knowledge and to acquire enough understanding for what they do. They dared ask the necessary questions and took time to look for answers to them.
If you want to succeed, embrace new knowledge about things that are relevant to your goals. There are a lot of ideas out there. Yours might not be as effective as it used to be. Take the time to research about new things. Arm yourself with new information that will become helpful in your journey towards your big dreams.
Know what you want early in life and do everything in your power to achieve them. These are the characteristics that young entrepreneurs have. And these are the things that make them different from the rest.
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Form A Texas LLC And Gain Liability Protection Plus Other Business Benefits
The LLC is now the most popular business vehicle for new business in Texas. This is because it is a simple and straightforward legal entity to form and maintain but at the same time it gives business owners a lot of choices when it comes to taxes, ownership structure and operations structure.
The Texas Secretary of State significantly revamped the regulations applicable to the Texas LLC in 2003 when it enacted the Business Organizations Code. This Code did not become effective until 2006. From 2006 on, the TX limited liability company is governed by Title 3 which covers the Texas Limited Liability Company Law.
LIABILITY PROTECTION
The biggest reason to form a Texas LLC is protection against personal liability. A business run as a sole proprietorship without a legal entity places the owner entirely at risk for personal liability. Given our litigious society and its growing number of plaintiff attorneys looking for cases, every business should operate with a legal shield.
The legal shield states that members (who are owners) are not liable for the business obligations, lawsuits and other liabilities of the business merely because they are owners. This protection is a tremendous benefit that becomes more significant as your business becomes more successful and thus becomes a larger target for lawsuits.
EASE OF EQUITY CAPITAL RAISING
Many new businesses need access to capital when starting. While borrowing money is the most common option, many business owners opt to raise equity capital by raising money in exchange for issuing ownership interests in the business.
Because the Texas LLC has an ownership structure where members can own defined ownership interests similar to the stock of a corporation, the raising of capital is much easier to structure and document as compared to a sole proprietorship. Plus, most investors will require a legal entity structure for their investments.
MORE TRUSTWORTHY AND PROFESSIONAL IMAGE
Customers are very skeptical today and with reason. After all, there are so many scam and pretend businesses out there trying to take money from customers. It is so easy to say you are a business because anyone can just come up with a business name and call themselves a business.
By taking the time to form a Texas LLC for your business, you are evidencing a significant business planning step which is a sign of a serious and legitimate business. Customers will see the LLC designation after business name and perceive more trust. You can get more customers faster with a TX limited liability company.
FLEXIBLE AND EVOLVING BUSINESS STRUCTURE
Most businesses start out needing a very simple and straightforward ownership and operational structure. The Texas LLC meets these needs because it requires a lesser number of formalities and maintenance requirements than a corporation. The LLC can be set up fairly quickly.
However, any successful business will evolve over time and as it grows, there may be a need to alter the LL structure to account for growth or more complexity. For example, the LLC may hire more employees or managers later or it may need to issue more ownership as new members are admitted to help with the business.
A Texas LLC allows a business to define for themselves, matters of relative rights, powers, duties and voting rights among members or managers. This prevents having a one size fits all management structure that may not be appropriate for your particular business.
CHOICE OF FEDERAL INCOME TAX STRUCTURE
One of the main reasons the TX limited liability company is so popular is because the Internal Revenue Service allows for an LLC to choose its choice of tax structure. Unlike the period prior to 1997, there are no longer any additional requirements to qualify for a single layer of pass through taxation.
When you form a Texas LLC, the default taxation rule is a single layer of pass through taxation. For a single member entity, it is called disregarded entity taxation and for a multi-member entity, it is called partnership taxation. This type of taxation avoids the potentially significant double taxation effect of corporate taxation.
However, in some circumstances, your accountant may deem a corporation tax structure as more appropriate for your business. In these cases, a Texas LLC can elect to be taxed as a C corporation or an S corporation (if it meets the S corporation requirements). No other legal entity has this many choices when it comes to how it will be taxed.
In order to gain all these benefits and not place your liability at risk, insist on a complete and proper Texas LLC formation using a reputable attorney or a Texas experienced LLC formation service provider.
For a FREE Texas LLC Guide or Name Search and to Learn More about how to Form a Texas LLC using the fastest, easiest and affordable service from Texas LLC experts, visit http://www.TexasBusinessFormation.com
Selling a Business - Get a Letter of Intent Prior to Due Diligence
The purpose of a letter of intent is to define the economic terms and conditions that apply to the pending business sale if the due diligence results in no material differences in the condition of the seller’s business. In simple terms, it means that if I go over your books and records in great detail and I verify that everything you had previously presented checks out, I am willing to pay you X dollars for your business under the set of Y terms. Below is a sample Letter of Intent.
Mr. X. X. LastName
Address 1
Address 2
City, ST Zip
PERSONAL & CONFIDENTIAL
Re: Purchase of Assets of ABC Corp.
Dear Mr. LastName:
The purpose of this letter is to set forth the general terms and conditions of the proposed purchase by NEWCO, a corporation (”Buyer”) of substantially all of the assets of ABC Corp., an Illinois corporation (”Seller”).
1. Purchase and Sale of Assets. At the Closing (as hereinafter defined), Buyer will purchase all of the assets including accounts receivable but not cash on hand and rights of Seller, including all real and personal property, contract rights, patents and intellectual property. All of the assets to be purchased are referred to below as the “Purchased Assets.”
2. Liabilities. Buyer will assume no liabilities of Seller except the following (”Assumed Liabilities”):
The obligations of Seller arising under purchase orders from the Seller’s customers in the ordinary course of business, sales orders issued to Seller’s suppliers in the ordinary course of business, leases of personal property.
3. Purchase Price. As consideration for the Purchased Assets, Buyer will assume the Assumed Liabilities and will pay to Seller the amount equal to the following: ___________________ ($__________) dollars (the “Purchase Price”).
Payment is to be made as follows: $ ___________in cash at the Closing, and the remainder by delivery of the Buyer’s promissory note in the principal amount of __________
The _______-year _____________ interest bearing note at the Prime Rate on the date of Closing will be issued by BUYER with interest paid quarterly and principal paid as a balloon payment at the end of the seven year term.
Employment Contract. Buyer and Seller will enter into an employment agreement which will provide for employment as Consultant and provide Seller with an annual salary of ___________ and such other normal fringe benefits as shall be mutually agreed upon and set forth in the employment agreement. In addition to the base annual salary, Seller will receive ___% commission on sales in excess of $ ______________ . The employment agreement will be for a three-year term. Basis of commissions shall be mutually agreed upon.
Recognizing that Mr. Last Name is a valuable resource to the well being of the ongoing business of SELLER, BUYER expects his daily cooperation as part of the total purchase price for at least the first six months after the closing. The employment agreement will require a minimum of _____ days and a maximum of _____ days per year.
4. Conditions. The purchase and sale of the Purchased Assets contemplated by this letter of intent will be subject to terms and conditions customary to transactions of the type, including, without limitation, the following:
No change occurring prior to the Closing which materially and adversely affects the Business, Purchased Assets, financial condition, and prospects of Seller; Completion of Buyer’s examination of the financial condition, properties and business of Seller which examination shall not have revealed the existence of any fact, matter or circumstance which in Buyer’s judgment could materially and adversely affect the Business;
Buyer obtaining financing for the purchase of Purchased Assets at terms which are acceptable to the buyer; and
Both parties agree to a Definitive Purchase Agreement.
5. Complete Access. Following the acceptance of the letter of intent by the Seller until the Closing, Seller will give to Buyer and its representatives complete access to all of its books, records, financial statements and other documents and materials relating to the Business and to Seller’s customers and suppliers.
6. Confidentiality. The information furnished by Seller to Buyer and its employees, advisors and consultants pursuant to Section 6 shall be subject to the provisions of the confidentiality agreement. Until the Closing, Buyer will at all times hold and cause its employees, advisors, and consultants to hold in strict confidence all confidential documents and information concerning Seller which have been or will be furnished by Seller to Buyer or its employees, advisors and consultants in connection with the transactions contemplated by this letter of intent.
If the transactions contemplated by this letter of intent are not consummated, regardless of the reason therefor, such as confidence will be maintained by Buyer, except to the extent such information (a) was previously known to Buyer prior to disclosure by Seller, (b) is in the public domain through no fault of Buyer, (c) is acquired by Buyer from a third party not known by Buyer to be under an obligation of confidence to Seller, or (d) is required by law or legal process to be disclosed.
Such documents and information will not be used to the detriment of Seller or otherwise in any other manner and all documents, materials and other written information provided by Seller to Buyer, including all copies and extracts thereof, will be returned to Seller immediately upon its written request.
7. Expenses. Buyer and Seller will be responsible for the payment of their respective expenses and professional fees incurring in connection with the negotiation an consummation of the transactions contemplated by this letter of intent, except as may be otherwise provided in the Purchase Agreement (as defined below).
8. No Other Negotiations; Brokers. Seller acknowledges that Buyer has incurred and will incur significant costs in reviewing and analyzing Seller’s business and proceeding in good faith to purchase the Purchased Assets as described herein.
Therefore, for a period of ___________ (___) days commencing on the date of Seller’s acceptance of this letter of intent unless Buyer notifies Seller in writing that negotiations in respect to the transactions contemplated hereby have terminated, neither Seller nor it shareholders will directly or indirectly solicit or make or entertain any offer or proposal from or to a third party regarding the sale or possible sale of Purchased Assets or a sale of the stock of Seller or discuss in any manner any such sale with any third party or provide any information concerning the Purchased Assets to any third party.
In the event that Seller or any shareholder receives any inquiry from a third party with respect to such a sale or possible sale, Seller will notify Buyer and inform such a party of Seller’s obligations under Section 8. It is understood that XYZ Merger Group, Inc. has acted as broker on behalf of Buyer and that Buyer shall be responsible for the payment of any and all fees and expenses due to such a firm.
9. Closing. It is anticipated that the closing of the transactions contemplated by this letter of intent (the “Closing”) will occur _____________ (__) days following the date of execution of the Purchase Agreement, but in no event later than ______________________________.
10. Public Announcement. The parties will make a joint public announcement transactions described herein, with the content and timing of such an announcement to be mutually agreed upon by parties. Each party will consult with the other party prior to issuing any press release or otherwise making any public statement with respect to the transactions contemplated by this letter of intent and will not issue any such release or make any such statement over the reasonable objection of the other party, except as required by law.
The parties will proceed diligently to negotiate in good faith towards the preparation and execution of a definitive agreement (the “Purchase Agreement”) containing the agreed-upon terms and conditions as well as the customary warranties, representations, covenants, and indemnifications normally associated with the purchase and sale of assets. It is understood that except for the provisions of Sections 6, 7, 8 and 10, this letter of intent is not legally binding on either Buyer or Seller, but that it is intended only to evidence the good faith intent of the Buyer and Seller to proceed toward the transactions contemplated hereby, subject to the negotiation of certain terms and conditions not dealt with herein.
If the terms set forth in this letter meet with your approval, please indicate your acceptance by signing both copies of this letter and returning one to the undersigned. Upon the return of an executed copy of this letter, we will instruct our attorneys to proceed with the preparation of the Purchase Agreement and related documents. Our offer to enter into this letter of intent will remain open until the close of business on _________________.
Very truly yours,
__________________________
Agreed to and accepted on this ____ day of _____________, 20____.
By:___________________________
Its___________________________
The Letter of Intent is non-binding so that if the buyer discovers some surprises, he can walk away with no penalty or he can attempt to renegotiate the previously stated terms and conditions. The seller should do his negotiating or have his advisor do the negotiating prior to counter signing the LOI because a smart buyer will try to lock you up for a period of 45 to 90 days while he performs his due diligence. This lock up means that you are not allowed to invite any other bidders into the mix until the period expires or until either party has cancelled the LOI. Once the due diligence is completed, then the deal is memorialized by a much more detailed definitive purchase agreement.
Dave Kauppi
is the editor of The Exit Strategist Newsletter, a Merger and Acquisition Advisor and President of MidMarket Capital, representing owners in the sale of privately held businesses. We provide Wall Street style investment banking services to lower mid market companies at a size appropriate fee structure.
Would You Like More Freedom? The Solution May Be A Business From Home
If you’ve ever wanted to make some extra money for things you’ve wanted without having to worry about where the money’s going to come from, you have company. Most people want to do this. In fact, a lot of people want extra money to take care of emergencies they have, to take a family vacation or second honeymoon, or to buy a new car.
However, if you think your only solution is to work an extra part-time job to make ends meet, or that you won’t have time to spend with your friends and family, that’s not necessarily true. In fact, consider starting your own online business from home to make extra money and perhaps even switch from your current 9-to-5 job someday. Of course, you probably are asking the question, “Is it really possible to make a good living with an online business from home?” And the answer is yes, absolutely.
Many online businesses done from home can give you the necessary income to ensure you have financial freedom. However, you have to make sure you protect yourself and don’t fall for any scams. Research any online business you’re considering thoroughly. It’s easy to do this by simply entering search terms into any of the major search engines to check them out. You can also visit forums online that deal with online businesses and participate in a few to see which programs are legitimate. You can also ask questions to make sure you’re getting into the right business for you. In addition, you’ll be able to ask questions of those who have already tried the online programs so that you can benefit from their experiences by staying away from scams and only going for those that will give you positive results.
There are many honest, legitimate ways to start a business from home. However, there are also a lot of scams where the only purpose is to take your money. You should not let these scams dissuade you from pursuing your most ardent dreams. Rather, you should do your homework and find honest and legitimate businesses you can participate in from home. Remember that one of the most glaring differences between legitimate businesses and scams is that these scams will sound too good to be true.
If a company is legitimate, it will be happy to communicate with you either by e-mail or telephone. If you can’t get honest answers to the questions you want to ask, go elsewhere. You should also able to talk to a real person who will answer every question you ask honestly and directly. Even though some responses may take a day or so, you should still get an honest answer from a real person. In addition, stay away from businesses that require you to pay a lot of money for start up. Most likely, these businesses are scams that simply want to take your money.
Therefore, don’t ask yourself, “Can I make money with an online business from home?” Instead, realize that you can get started on your path to financial freedom with an honest, legitimate online business. If you look carefully and do your homework, there’s no reason you can’t find one that will give you everything you want.
To get started, do thorough research on online businesses that interest you. Don’t fall for scams, but do thoroughly investigate and consider honest, legitimate businesses that can truly make you the money you deserve.
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Before You Create an LLC in Virginia, You Must Resolve These 4 Issues
In order to properly create an LLC in Virginia, there are 4 major matters that should be thought through well and decided upon. By ignoring these 4 things, you run the risk of an improper or incomplete formation of your Va limited liability company.
First, you need to decide whether you are going to create your Va LLC yourself or use a third party to help you. While many choose to use a business lawyer, a lawyer is not necessarily for the actual formation process. The rules and requirements are straightforward and there are reputable services out there who provide this service to Virginia business owners.
You can perform this service yourself if desired. You need to review the Virginia Limited Liability Company Act and the documents and instructions put out by the Virginia State Corporation Commission.
If you want to save time, money and stress, and gain peace of mind that the filing is done properly, there are online formation services companies that specialize in proper LLC filings. Just be sure you are using one that is experienced and reputable when it comes to creating an LLC in Virginia.
Second, you need to decide on a name for your Va limited liability company. The name must not be the same or similar to another name being used by a Virginia legal entity or a name that has been filed for use by a Virginia business in the state corporation records. You can call the Virginia state agency to check on names or a reputable online formation service will provide this service for you as part of its services.
Third, you need to determine who will be the registered agent for your business entity. In Virginia, every Va limited liability company must appoint and continuously maintain a registered agent and Virginia registered office on file with the state agency.
A registered agent must have a permanent, physical address located in Virginia where legal papers can be accepted by a person during normal business hours. In addition, the agent must be a member of the entity, a legal entity that is properly and actively registered in the state of Virginia or a Virginia lawyer who is in good standing with the Virginia State Bar.
Fourth, you must come up with a plan for preparing and adopting a Virginia LLC Operating Agreement. The LLC Agreement evidences ownership and puts in place a management structure for a Va limited liability company.
When you create an LLC in Virginia, the formation only creates the legal shell entity itself. More action is required to create owners of the Va limited liability company by issuing ownership units to members. In addition, a shell legal vehicle does not automatically have a set of laws or rules to govern it. While the Va LLC Act has some default rules, the law strongly assumes a written agreement among the LLC and its members will be adopted for every Va LLC.
Having a written Virginia LLC Operating Agreement will provide a user manual for your Va limited liability company which in turn makes operating your business easier and with significantly reduced risk of misunderstandings and disputes among owners and managers.
In summary, there are 4 key fundamental decisions you should focus on before you create an LLC in Virginia. For free Va limited liability company information , a Free Virginia LLC Guide and Virginia specific articles, reports and LLC FAQs, visit www.VirginiaBusinessFormation.com
Eight Ways To Raise Money For Investing
When you are new to investing you may have little or no funds with which to invest with. Let’s take a look at several ways to get access to money so you can begin your investment career sooner rather than later.
1. Savings - The old fashioned way like you were told to do as a kid. Remember, all great investors are great savers. If you are not saving money now then you are never going to become wealthy until you start saving. Make sure you pay yourself before you pay anybody else. Simple but powerful words.
2. Sell something - In this modern society we live in where we just have to own the latest of everything. Well the good news about that is that you are bound to have plenty to sell. Put an add in the newspaper or the easiest way, E-Bay. Now the harsh reality, stop spending money on things you don’t need. Wait until you have real wealth then pay cash for them.
3. Tax - Minimize your tax as quickly as possible. The wealthy don’t become so by paying lots of tax. Get yourself a great accountant and get good advice on how to lower your taxable income. There are plenty of ways to do this. Starting a side business is a great idea. Pay your expenses and spend, then pay tax from what is left over. It is much better than being taxed and then spending what is left. This will send you broke, quickly.
4. Income - Tomorrow you are going to see your boss and get that pay rise. However, first you need to get your reasons down on paper why you should get a rise. Write down some good solid reasons why you should get one. If you don’t deserve one then take a long hard look in the mirror. If you can’t do your best working for someone else how are you going to give yourself the best? Be the best that you can regardless of what activity you do and the rewards will come. Ask for 10% extra. If you don’t get it but you know you are worth it, then get another job. Only you will know if you are worth it.
5. OPM (Other peoples money) - The most successful business people in the world today always use OPM, always. Do you think Donald Trump puts up his own money to finance that new tower? No way, he never puts up his own money. Use the banks, or do vendor finance deals. Borrow, beg or (actually, you better not steal) borrow some more. As long as the investment pays more than the interest things will work out. You must do due diligence here. Good debt is the key here and I will do another article on good debt shortly.
6. Using equity - So you own a house or part of a house. Excellent, then you have valuable equity which the banks love and in Australia you can release about 80% of that equity. Should you spend that equity on a holiday like the rest of the herd? No. Put that money to work in property or shares and allow yourself to have the income that it produces.
7. Parents equity - Times are getting tough, that is for sure. Talk to your parents if you can and explain that it a new world for young and smart investors. Go over everything and show the folks exactly how your chosen strategy works and how you both can benefit. Profit share with them if you like. Better yet, teach your parents and give them a better retirement. It is your duty.
8. Superannuation (401K) - Are you satisfied with the institutions taking care of your life savings with various financial planners and fund managers getting massive trailing commissions? Then start to manage your own SMSF (401K) and put it to work harder and smarter. There are some awesome opportunities out there right now and you can find one that resonates with you. Pay for good advice here. I repeat, pay for good advice.
So there you have it. Eight ways in which to get a leg up in your new investment journey. You might not be able to do all eight ways, but I’m sure you can access at least four of them.
Clint Maher is dedicated to helping others learn about wealth creation. You can visit his website and get your free E-book and DVD to learn how to invest. You can view his wealth creation blog.
How To Build A Successful Business Partnership
Partnerships are some of the most difficult relationships in business to manage. More often than not they end in failure. They can become extremely complex and if they don’t work out things can get very messy, often ending in failed friendships and estranged families. So if you are considering a business partnership there are a few things you should keep in mind.
When considering becoming a partner with someone you need to remember that your partnership will become about more than money. It’s about trust. It’s about relationship building between you and your partner. Together you’re going to have a lot of challenges and difficulties that you’ll need to work through together. You can’t just make an important business decision on your own. You’ll need to discuss it with your partner and vice versa. But at the same time there will be instances when something can’t be talked about beforehand and each person will need to have confidence in the other to make the right decision.
If you are thinking of forming a business partnership with someone you will also need to determine whether you know the person well enough to work with them. Do your personalities complement each other? Do your business and your partners mesh together effectively? You need to evaluate your strengths and weaknesses and your partners to make sure that between the two of you there exist the skills needed to succeed.
And a successful business partnership needs to have shared goals and values. The two of you need to agree on what you want the business to become. Are you looking to build up your own little empire or are you happy with the fact that you are your own bosses and can make a decent living.
Successful business partnerships are rarely equal partnerships. Fifty fifty splits are not a wise idea when considering being partners with someone. This of course is an area that can cause a lot of animosity. But for a business to be successful most often it needs to have one voice that has the final say. Often this is worked out by determining who will be the president of the company and who is the vice president or some other such title. This can work and often does but the fact that two different people own exactly half of the company can often come into play anyway.
Once the other details have been worked out you’re final test of whether a partnership can work is to draw up a business plan. In it you can outline each person’s area of responsibility within the business. It’s important because even though you’ll want to discuss those important decisions that must be made you also want to be able to take advantage of the skills that each person is bringing into the business. You’ll want the work loads and responsibilities to be fairly equal. Often animosity can develop if one person believes the other is not contributing their fair share.
Business Partnerships can work but they also require a lot more thought than a sole proprietorship does. You need to be cognizant of the other person’s abilities, dedication, personal responsibilities, and goals. Just as they need to be aware of yours. Often good relationships can become strained or even end because of a failed partnership.
Cash Miller is an experienced entrepreneur and speaker who has spent over a decade as a small business owner. His years of experience in small business cover a variety of topics. If you are looking for more small business help please check out http://www.smallbusinessdelivered.com
Six Quick Easy Ways to Make Money Online
Everyone seems to be talking about making money online these days and why not? Creating an online income now can protect you in the future if you get laid off. And it can even allow you to voluntary leave the ranks of corporate workers once you achieve a decent level of success.
There are many different ways to make money online. Here are 6 ideas to get you started thinking about ways you can start making money online today and protect yourself for the future.
1. Blog for Money
Blogging is a great way to make money. It’s easy, fun and you can get started for free with a service like Blogger.com or Wordpress.org. Or if you’re already a bit tech savvy go ahead and host your own domain. There are plusses and minuses to each way of blogging.
If you choose blogging as a route to making money online be warned that in addition to content creation you’ll also need to learn at least the basics or marketing and search engine optimization. This may seem difficult, but it can be very rewarding and will be a definite asset to your knowledge. The more you learn the faster you’ll be able to make more money.
If you prefer not to learn about the marketing of your own site you can still make money blogging for other sites. Services like Triond are a good place to start out and make a name for yourself. Later you can try to get full time work blogging for a network such as Weblogs Inc.
2. Affiliate Marketing
As an affiliate marketer you’ll promote the products and/or services of other companies and they will pay you a commission for the sale or leads. Think of it like an online sales job.
Affiliate marketing is a huge arena and there are tens of thousands of products you can potentially promote. To get an idea check out two of the largest affiliate networks, Commission Junction or Clickbank. Both have huge numbers of products you can sell online.
You’ll be amazed at the amount of money you can make through affiliate marketing, it is only limited by your own imagination and hard work. There are many successful online entrepreneurs making fortunes every month through affiliate marketing.
3. Starting An Online Business
Starting your own business online isn’t as hard as you might think. If you’ve got in depth knowledge of an industry and some good contacts within that industry you can very likely start a business providing a product or service related to that industry.
Starting your own online business allows you to sell your own products or services. Successful online businesses include web design, software development, copywriting and digital products such as eBooks or video courses.
You’ll want to make sure that you do some research before jumping in and make sure that your chosen business is viable and that you can handle the extra demands that business owners have. You can find a great deal of information at Entrepreneur.com on how to start an online business.
4. Domaining Your Way to Riches
Domaining is quite simply buying and then reselling websites and domains for profit. Domainers buy up web properties and then sell them immediately for a net gain or take the time to fix them up first and sell them for even larger profits. It is very similar to offline real estate investing without the huge capital requirements.
Often domaining is referred to as domain flipping and it can be very profitable for those that can identify good niches and develop attractive money making sites. To get some idea of how much websites can sell for take a look at the SitePoint Marketplace, you may be surprised.
5. Take Paid Surveys Online or Try Get Paid To Sites
Paid surveys and get paid to sites are two long standing and easy ways to make money online. You can find dozens of websites that are willing to pay you either for your opinion or to complete trial offers.
One of the great benefits of these types of sites is that you don’t need any technical skills or even a website to participate. Paid surveys are fun, easy and they are fairly risk free.
If you want to participate with the get paid to websites you should investigate first to see if they are reliable in sending checks. Once you do find a reliable site you can easily makes hundreds of dollars a month signing up for trial offers.
Paid Survey Success has a large list of paying survey companies as well as get paid to companies that do pay.
6. Freelance and Make Money Online
There are thousands of freelancers making money online and you can be one of them. If you’ve got skills in web design, programming or writing you can easily join the ranks of the online freelancers. Other freelancing opportunities other than the ones listed above exist in proofreading, transcription and translation.
Don’t expect to make thousands as soon as you start however. It will take you some time to build a client base and get to the point where you can command top dollar for your work. But it can be done with hard work and persistence.
When beginning your freelance career you’ll likely be taking low paying jobs from places like Elance, however as you gain experience and gather a client list you’ll slowly be able to move away from this and increase your rates.
I can tell you that writers especially have plenty of places to begin. In addition to the freelancing websites there are also web communities that will pay you to write for them. Associated Content is one such site. Another is Hub Pages where you get paid on a revenue sharing basis. This means you’ll get a percentage of the money made from your articles on Hub Pages.
Honestly the important thing is just to get started. You can use any of the methods listed above and there are likely dozens more ways to make money online that I haven’t covered. Don’t make the mistake of waiting and over analyzing, pick something you think you’ll like and get started today. That’s the best way to make money online!
To learn more about making money online take a look at the authors pages (highlighted in the make money link) over at Hub Pages. If you’re really interested in paid surveys online you can visit the blogger blog in the survey link.