A question for those of you that own your own business.

[djturnz]

I am looking into starting my own business. It would be a part time gig. I don't want to Incorporate or LLC right now.

The business would require a dedicated vehicle. Can I register a vehicle in the business name instead of my own, without being incorporated? I looked around at Penndot's site, but I can't find any info.

[Dredly]

Just a suggestion... if you are even considering going into business for yourself don't wait to start an LLC, do it RIGHT NOW, for your sake and your families (if you have one).

I don't think you can have a car in a "business" name if the business doesn't exist. Plus you are opening yourself up to a lot of potential legal issues if you aren't a business.

don't wait! spend the money and do it right.

[Exbiker]

I am looking into starting my own business. It would be a part time gig. I don't want to Incorporate or LLC right now.

The business would require a dedicated vehicle. Can I register a vehicle in the business name instead of my own, without being incorporated? I looked around at Penndot's site, but I can't find any info.

Why do you want to. I`ve owned tractor trailers and all were registered in my name as a sole proprietor. If the vehicle is dedicated solely to business use all expenses would be a write off anyway. Either way if you also use it for personal use you have to keep track.
Just keep one thing in mind. Most small businesses fail because of underfunding and/or poor money management.

[Exbiker]

Just a suggestion... if you are even considering going into business for yourself don't wait to start an LLC, do it RIGHT NOW, for your sake and your families (if you have one).

I`m not big on incorporating. The last 18 years I have been a sole proprietor, in the 80`s when I owned a Nautilus I was a partnership and before that our family business (Chevrolet Dealership) was a corporation, but only because GM required that.


If you don`t mind the question, what type of business?

[str8shooter]

I am looking into starting my own business. It would be a part time gig. I don't want to Incorporate or LLC right now.

The business would require a dedicated vehicle. Can I register a vehicle in the business name instead of my own, without being incorporated? I looked around at Penndot's site, but I can't find any info.

I'd say stay sole proprietor unless you're starting a business in health care or will have customers or employees on your owned or leased property. You'll save a ton of headaches with regard to taxes. With sole proprietorship, it's just another schedule and a couple forms on your personal return. IMBW, but I think if you incorporate or go LLC, you have to file a seperate business return.

You can deduct the expenses of your personally owned car for business (including interest if you have a loan), and if the business loses money, it can be deducted from the income of your full time gig if you still have one. If you run the business out of your home, then you can deduct a percentage of your utilities, trash pickup, cleaning service, home repairs, etc.

[LittleRedToyota]

personally, i think anyone who runs a business and does not incorporate in some fashion is asking for a disaster.

if you are not incorporated and your business gets sued (not hard to imagine in a lawsuit happy world of freeloaders looking to "hit the jackpot"), all of your personal assets are on the line. if a judgement is entered against your company, you can say goodbye to your house, your car, your personal savings, etc.

incorporating insulates your personal assets from claims against the business.

if you are worried about double-taxation, there are ways to deal with that.

imho, it is well worth the money (and it doesn't have to cost much) to get a competent attorney to help you decide how to incorporate and protect your personal assets. and the earlier in the process you do it, the cheaper and easier it is.

just my 2 cents.

[Dredly]

Your company being responsible is the biggest thing, if you ever step foot on a customers property its even more important as now you are directly responsible for what happens on their property and you will be held liable for screw ups.

yeah backing over a mailbox may make you look bad but it won't cost ya more then a few hundred bucks tops... however flooding a house or burning it down, damaging a priceless antique or a "paiting" going missing will all land you in very very hot water.

[SteveXD]

For the vechicle you can do many things. Record mileage and deduct the rate from your income. I have to check but it's around .485 per mile. You can also deduct the vehicle, but it has to be soley for work. You'll also have to get business vehicle insurance which is much much more

Do yourself a favor and incorporate!!! It's cheap and it will save you a lot of money in taxes. I'd recoment registering in DE. I didn't incorporate for 3 years and I probably lost about 40-50 thousand in taxes. social security kills you on taxes... I have a scorp right now.

[Noah_Zark]

I am looking into starting my own business. It would be a part time gig. I don't want to Incorporate or LLC right now.

The business would require a dedicated vehicle. Can I register a vehicle in the business name instead of my own, without being incorporated? I looked around at Penndot's site, but I can't find any info.

You won't find it on PennDot's site, you need to look at the PA Secretary of State's pages.

You will need to register the "ficticious name" of your business with the PA Secretary of State. That's your business name, and you can place assets under that business name.

You should get an accountant to help keep track of finances.

If you are the sole proprietor and take a salary or wages from the part time business, you will have to pay payroll taxes on those wages. These include Federal and State Income Tax witholding, and TWICE the amount of Social Security and Medicare tax that you normally pay through your day job. Why twice? Because your day job employer pays half the SS and MED witholding, and you pay the other half. Sole props get to pay 100%. Ask me how I know this.

Consider taking "draws" from the business in lieu of wages, but speak to an accountant about the tax ramifications of draws.

You WILL need a separate bank checking account. Everything for this part-time business MUST be kept separate from your personal finances. Pay the business bills from that business account, and keep track of ALL expenses, and the personal money that you invest in the company is "paid in" to that account.

Write up a business plan that shows what your estimated income will be and where your income comes from, and what expenses will be incurred doing business. These figures should be outlined for at least two years, and preferably five. The business plan is your "road map" to success, even if it shows that you should not start the business, then you're still successful in that you've avoided unnecessary costs and expenses. Update the plan quarterly with actual real-life numbers and act accordingly. Be sure to take into account any seasonal upturns and downturns. Will you have enough "part time" to handle the rush of a busy season? Will you have the cash for normal cash flow for the slow season?

In order to succeed, be prepared for work, and LOTS of it. You and your spouse (or GF) MUST be in agreement on this venture, especially when the busy season means you aren't home evenings (mornings, afternoons as applicable) for kid's school acivities, birthdays, etc. Or when it means that you are too exhausted to mow the lawn, repair the car, have sex, etc.

NEVER buy vehicles, equipment, supplies or tools that you don't need right away when starting out. Rent if you can. Don't tie up a lot of cash buying "stuff" that you think you might need for a job someday. It's not worth it, and such activity/mindset will EAT UP CASH before your eyes.

Likewise, if you need to have "consumables" on your truck that you use every day, make sure that you have a sufficent supply of those items so that you don't need to "stop and run" for something. Like the saying goes, "Time is money." Interruptions that take you away from a job COST YOU MONEY.

Speaking of interruptions, schedule jobs so that you save time and travel costs. Plan ahead.

Develop your cost models now, how much it costs you to do a certain job or task, then add your markup on top of that. Your cost structure is the same as everyone elses: Labor, material, energy, overhead. How much are you "worth" in your time? That figure should be the cost of your time as if you were an employee, which is about 1.5X what the employee pay rate would be. The 0.5X covers payroll tax, health insurance, and other costs. Material is either the raw materials if you make something, or the consumables that you use in your business. Getting that material to your vehicle costs money if you have to get it or if you have it shipped. Factor in the cost of your time and fuel or the shipping cost of that material in your material cost. Energy is your vehicle fuel, and that fraction of electricity you use at home in support of your business. It might be less than a nickel an hour to plug in a bunch of battery chargers or whatnot, but figure that into your costs. Watch the pennies and the dollars take care of themselves. Overhead is the adminstrative cost, in this case fees that you pay an accountant or attorney, liability insurance (you did figure on needing liability insurance, didn't you?), vehicle insurance, registration, etc., rental fees for expensive equipment that you don't need to buy, postage, advertising, bounced check fees, cost to remedy customer complaints when your vehicle leaves a rut in the lawn, or you back over a kid's bike, etc, etc.

Once you figure your costs, you need to set your gross margin, or how much gross profit you need to make to make the venture worth the effort and cost. To do this, you need market intelligence -- what do similar businesses charge? Many service-oriented businesses try to set a gross income of a certain dollar amount per hour -- the salon that cuts my hair has five operators, and their cost model says that the operators should each be doing a target between $60 and $70 per hour in business. That's a perm and a couple haircuts on average. The employee operators don't take that much home of course, because there's electricity, gas, water, towel laundry, advertising, business insurance, payroll tax, and what have you to come out of that $65 per hr gross revenue. Your costs and margin will dictate your gross revenue, or your gross revenue and costs will dictate your margin. Point is, do the math based on your cost structure and any market intelligence your can gain.

While you're at it, what will differentiate you from your competition? Service? Quality? Responsiveness? Cost? Your advertising needs to answer the "what's in it for me" question posed either silently or verbally by your potential customers. What about your and your business will make a customer select you and not your competition?

Speaking of customers, have you done any kind of market study on your potential customer base? Is there an unmet need for your product or service in your area? Do the local customers engage product/service providers from out of the area because the local competition is too busy, unresponsive? Or are there a dozen part-time guys with a truck trying to carve off small pieces of the same pie? Can you provide your product or service at your customers' convenience, and not necessarily at yours? For example, they may not want you hammering or drilling or spreading weed killer at 18:30 when everyone's home and trying to have dinner.

Lots of stuff to consider before taking the plunge.

I'm a one-person designer of custom industrial controls and developer of custom programs for industrial programmable logic controllers. I left Corporate America in 1996 after almost 20 years of production management and I've never looked back. However, I have about 47 clients, small manufacturers that can't afford an Electrical/Instrument engineer on staff, and I'm at their beck and call. Typically they like to do maintenance on Friday 3rd shift and Saturday 1st or 2nd shift. You have to go when the stuff breaks down, or when an electrical storm plays hell with the black boxes. And you have to compete with the local electrical service contractors who are becoming increasingly more sophisticated as they hire young men and women just out of trade achool who've been exposed to PLC programming. And you have to constantly look for new sales, new customers or clients, because businesses merge and consolidate, businesse fail to draw new programs and their volume decreases and revenue drops below the cost line, people die, couples get divorced, and in the process clients cease to exist.

Sorry for the ramble,

Noah

[djturnz]

Thanks Noah and Everyone else.

Much of this is above what I would need to get involved with. I can't really get into WHAT my business will be yet, but once I get it together, I'll spill the beans.

Thanks