How to Transition from a Sole Prop to the Big Leagues

[GCCLee]

Okay Mikeys Boarders,


Here is where we are.... Sole Prop Licensed Under Handyman w $2mil Insurance No Workers Comp!
Proffit's are Ours for the taking so to say.

Under the Radar, But Not Really.

Where this thing is forcing us to go..... Workers Comp and Hiring a Helper : )
Correctly I might Add!

Logo's and a little more of me growing this thing I suppose, Yikes.

If I were to get hurt or even someone else were too.....

My hed is Spinnin


Talk about one extreme to another, ya see what I deal wit fellas!


Here we go........... What is your Take on Making this Step in Business?

 

[Desk Jockey]

You can still get money when ever you want. The corp declares a dividend and take what you need as distribution.

 

[GCCLee]

It would be nice to get a paycheck : )


I bufferd a flur wit a toilet lid un timez

 

[Russ T.]

Get a good accountant to walk through it. They will be far more valuable than most of us clowns.

I formed an S Corp this year at my CPA's advice. Was HAMMERED with taxes last year. WONT happen that way again. VERY expensive mistake for me not to consult him sooner/more often.

Now I own a corporation and am livin' the dream! ;-)

...as a one man show still.


The Clean Machine of Iowa
www.thegreatcleanmachine.com

 

[Dan]

It's not always as great as saying " I'm a Corporation". I don't know how it works for all states but I can tell you in California you have the state up your ass so far waddling is a challenge. I WAS a corporation in California. Let me explain. There was an issue with my taxes and since I was a corporation they decided to "suspend" my corporation. Well, I had no idea and was probably a great deal my own negligence but just wait.... As a corporation you get a ton of letters in the mail that look and appear as real letters from your state but they are fake compliance letters from companies trying to get money for something not needed or already been completed. The tactic is just send you a bill and you'll probably pay it to stay in compliance and not question the authenticity of it. I didn't realize one was from the state and they suspended me over it. How did I finally figure it out? I was driving my box truck in a city that has a huge enforcement against commercial trucks and was pulled over for no front license plate, no biggie right? Well he also came back and said my CA number was suspended and cited me for that as well. So I get everything figured out and go to court for the ticket..... 550.00 dollars later for a CA number violation because my "corporation" was "suspended" with the state.

im not saying being a "Corporation" is a bad thing I'm just saying you better know what all your getting yourself into. Your taxes, commercial vehicle insurance and all the other compliance issues as a "corporation" can be a huge pain for the one man show.

Talk to your taxman and make sure your choice is right for you. Make sure you know your compliance requirements.

A final note to my ordeal with the State of California...... The reason they suspended me was a tax penalty that I didn't owe for anyways and the non compliances of paperwork because it does honestly get confusing. I told them they could take there fees and penalties and shove them right up their ass.... I have never paid it... Never will and they gave up sending me letters on it. You might think... That's crazy right? Not really, they cannot come after me anyways and they knew it.... Make sure you have a good taxman who knows the rules.

 

[GCCLee]

I am on a teader todder over this one.

 

[Dan]

Talk to your taxman
C-Corp is out of the question
S-Corp is what a I was
LLC Might work out good. If I understand correctly it requires the least amount of compliance issues and is the easiest to stay on top of. As far as LLC vs. S-Corp in tax benefits.... I'm not sure of the benefits of each in comparison but I do believe a LLC is better than sole prop but the benefits of it only kick in if your income is at or above a certain amount.

 

[Doug Cox]

What I have been told is that corporations are for when you have employees. Basically a liability issue. Therefore , I stay as a sole proprietor.

 

[GCCLee]

What I have been told is that corporations are for when you have employees. Basically a liability issue. Therefore , I stay as a sole proprietor.

Yes,
Bur have you utilized a helper and seen what they can do for production rates?


That is where I am.
Happy as a Sole but understanding the growth.
Last thing I need is an accident.
If that happens, house, rig and all the cool stuff in em.......



POOF Gone.........
Don't want that to happen.



So can a Sole Prop hire an Employee and still protect all their assets?

 

[TomKing]

This is what was right for us.

Set yourself up as a S-Corp
Limits your personal liability
Allows you to take dividends.
Keeps you from having to guarantee loans for equipment after you are established.

Use a payroll service to do your payroll
allows you to get add on for Workman's comp
This also puts the responsibility back on the vendor if you ever have a penalty to pay.

Chris these are important questions to be asking.

The real questions I ask myself are
Is your current model of doing business scalable?
Are you developing a brand that allows you to compete with other companies?
Even though you are one truck do you have written systems of how you do things?


If you want to grow and you want to have even a few employees, once you get them you will have a hard time finding time to develop these tools.
Are you thinking through your cleaning methods? Can someone do these things the same as you? Is the way you keep your shop, truck and work sites organized? If you are not doing it now it will not happen when you get employees.
I always tell our guys there is a place for everything make sure it gets there. Label everything shop and truck.

Are you developing your marketing calendar? When you get employees this will be really hard to keep up with. You will need solid work coming in. You think you have pressure now.

Wait till you get employees that have families' to feed.

When you ask the question how to grow those are the things that come to my mind.

 

[Russ T.]

This is what was right for us.

Set yourself up as a S-Corp
Limits your personal liability
Allows you to take dividends.
Keeps you from having to guarantee loans for equipment after you are established.

Use a payroll service to do your payroll
allows you to get add on for Workman's comp
This also puts the responsibility back on the vendor if you ever have a penalty to pay.

Chris these are important questions to be asking.

The real questions I ask myself are
Is your current model of doing business scalable?
Are you developing a brand that allows you to compete with other companies?
Even though you are one truck do you have written systems of how you do things?


If you want to grow and you want to have even a few employees, once you get them you will have a hard time finding time to develop these tools.
Are you thinking through your cleaning methods? Can someone do these things the same as you? Is the way you keep your shop, truck and work sites organized? If you are not doing it now it will not happen when you get employees.
I always tell our guys there is a place for everything make sure it gets there. Label everything shop and truck.

Are you developing your marketing calendar? When you get employees this will be really hard to keep up with. You will need solid work coming in. You think you have pressure now.

Wait till you get employees that have families' to feed.

When you ask the question how to grow those are the things that come to my mind.

Excellent advice Tom.


The Clean Machine of Iowa
www.thegreatcleanmachine.com

 

[Russ T.]

Having even 1 career minded, family man as an employee is not something to take lightly. There are exceptions but the best, long term, employees have financial responsibilities. This is ultimately what I'm aiming for. A helper that will love this trade and excel at it enough to take some weight off me. Someone who will help me create cheerleaders.

I will work alone until I can't handle the work load anymore. In a pinch I can hire a part time college kid (even teacher).

I'm just getting so stinking good at this! ;-) Seriously, at 38 I'm more efficient than ever. I'm getting a great education, hands on and on MB!

I feel a little sorry for the poor guy who ends up working with/for me ;-).




The Clean Machine of Iowa
www.thegreatcleanmachine.com

 

[Shane Deubell]

Have some very simple advice for you chris.
Stop being a consumer and start being an investor. Cars, boats, big screen tv's and even houses are all bad investments.

Whether you want 10 trucks or 1 is personal choice, you can build wealth either way.

Not saying to be a hermit just budget your play money for that stuff. Talk to a financial advisor now and map out a plan based on your personal goals.

 

[GCCLee]

This is what was right for us.

Set yourself up as a S-Corp
Limits your personal liability
Allows you to take dividends.
Keeps you from having to guarantee loans for equipment after you are established.

Use a payroll service to do your payroll
allows you to get add on for Workman's comp
This also puts the responsibility back on the vendor if you ever have a penalty to pay.

Chris these are important questions to be asking.

The real questions I ask myself are
Is your current model of doing business scalable?
Are you developing a brand that allows you to compete with other companies?
Even though you are one truck do you have written systems of how you do things?


If you want to grow and you want to have even a few employees, once you get them you will have a hard time finding time to develop these tools.
Are you thinking through your cleaning methods? Can someone do these things the same as you? Is the way you keep your shop, truck and work sites organized? If you are not doing it now it will not happen when you get employees.
I always tell our guys there is a place for everything make sure it gets there. Label everything shop and truck.

Are you developing your marketing calendar? When you get employees this will be really hard to keep up with. You will need solid work coming in. You think you have pressure now.

Wait till you get employees that have families' to feed.

When you ask the question how to grow those are the things that come to my mind.

That is some Powerful Stuff Tom!


Scares the Crap outta me.

 

[TomKing]

I will be careful with that hate to make such a big mess. LOL

That is some Powerful Stuff Tom!


Scares the Crap outta me.

 

[TomKing]

Have some very simple advice for you chris.
Stop being a consumer and start being an investor. Cars, boats, big screen tv's and even houses are all bad investments.

Whether you want 10 trucks or 1 is personal choice, you can build wealth either way.

Not saying to be a hermit just budget your play money for that stuff. Talk to a financial advisor now and map out a plan based on your personal goals.

Great advice Shane.

That is why I help teach the Dave Ramsey Debt Free class at my church.

We had over 100 in our last class.

Lot's of success stories on people making life change in how they handle money.

The people with the most freedom in life are those that are debt FREE. That is some power.

 

[bob vawter]

Have some very simple advice for you chris.
Stop being a consumer and start being an investor. Cars, boats, big screen tv's and even houses are all bad investments.

Whether you want 10 trucks or 1 is personal choice, you can build wealth either way.

Not saying to be a hermit just budget your play money for that stuff. Talk to a financial advisor now and map out a plan based on your personal goals.

OHH YAAA....two hunnert years from now when yor rotting corpse is laying in the cold wet ground....
you'll wish that you'da had that big flashy car... boat and the big assed plasma

 

[Shane Deubell]

OHH YAAA....two hunnert years from now when yor rotting corpse is laying in the cold wet ground....
you'll wish that you'da had that big flashy car... boat and the big assed plasma

Not really ...

I will think about all the time i spent screwing off while the rest of the adults were slaving away at some job they hated.
Cash = Power, the power to do whatever it is you choose.