Protecting Yourself with an LLC.

Forming an LLC (limited liability company) or corporate entity does not mean that your company cannot be sued. But it makes it possible for you to obtain some protection from personal liability if it is.

"The protection -- particularly for one-person businesses -- is not absolute but is better than no protection at all, which is what you will have if you conduct your business as a sole proprietorship," said Richard M. Leisner, an attorney with Trenam Kemker in Tampa, Fla.

To maximize the protection of a corporation or LLC, make sure you keep formal business records, file your withholding and other taxes on time and separate your personal funds from your business bank accounts. Put all the company accounts and financial transactions under the corporate name -- not under your own name.

"Often, business owners think these formalities are not important, but the details are important in order to avoid the risk of a court disregarding the corporation or LLC," Leisner said.

"If that happens, it's just about the same thing as operating as a sole proprietorship."

Make The Slow Market Work For You!

Got a wonderful friend who has begun to turn a downturned economy into his dream of a lifetime. He's taken low cost real estate, the bargain basement priced luxury items and has begun to turn it, or "flip" it for a small profit.

Don't be afraid to make a small profit; its either a small profit or absolutely no profit. As we say, "a win is a win". By improving some networking techniques and some strategy assistance, one of our recent success stories has created "Turn Town Realty, LLC.". Turn Town has found a way to take the Seller's bottom number and brokers that into the top number of the buyer with precision.

A fall of more than 10 percent in the average apartment price in Manhattan in the third quarter from a year earlier attracted buyers who pushed up the number of sales by over 45 percent in just one quarter, industry reports showed Friday.

Since peaking in the first half of 2008, Manhattan apartment prices have fallen an average of 25 percent to 30 percent.

The Manhattan residential real estate market had been largely unscathed during 2008 as other U.S. housing markets were floundering, but it hit a wall in September 2008 when Lehman Brothers collapsed and the financial sector fell to its knees.

About 20 percentage points of the 25-to-30 percent drop can be sourced to the months after September, said Jonathan Miller, president and chief executive of Miller Samuel appraisers and the author of the Prudential Douglas Elliman Manhattan Market Overview quarterly report.

Other once-hot U.S. housing markets have seen prices fall by more than 50 percent.

"We're not done yet," Miller said.

New York City is still wrestling with a Wall Street that is trying to reinvent itself, a disproportionate number of layoffs of high-wage earners and new condominium construction.

"There's a lot of unwinding to go," Miller said. "We're moving toward stabilization but we have a ways to go."

The average sales price of a Manhattan apartment fell 10.6 percent to $1,323,462 in the third quarter from a year earlier, the Prudential Douglas Elliman Manhattan Market Overview showed. But it rose 0.8 percent from the prior quarter's $1,312,920.

Prices per square foot fell 16.5 percent to $996 year over a year earlier and were off 5.7 percent from the second quarter, the report said.

The third-quarter median sales price -- in which half the prices were higher and half were lower - dropped 8.4 percent to $850,000, but rose 1.7 percent from $835,700 in the second quarter, the Prudential report said.

While the number of sales fell 16 percent from a year earlier to 2,230 sales, it soared 45.6 percent from the second quarter. Brokers attributed the rise to unleashed pent-up demand from the prior two quarters.

Still, deals are taking longer to complete. Buyers are cautious and mortgage lending is tighter than some brokers and experts have seen during their careers.
A for-sale apartment spent 167 days on the market, up from 134 days a year earlier.

An $8,000 federal tax credit for first-time home buyers helped fuel sales of studio and one-bedroom apartments, where prices fell 30 percent and 24 percent respectively from a year earlier, Corcoran Group's quarterly report said. The credit is scheduled to expire at the end of November.

"The credit is still too tight. We need more jumbo financing for New York City," Pamela Liebman, Corcoran chief executive said, referring to mortgages over $417,000.

Are You Professionally Insane for Starting A Business?

Well, lets leave that one open for more qualified professionals, however it can be found that more and more we tend to teeter on that very notion. Business and business formation is not intended to drive us all bonkers, yet, at the end of the day, we all seem to grasp tightly right before pulling our hairs out.

It's not suppose to be that way!: Consider for one moment the efforts you are taking to cultivate your small business, product or idea. Are you functioning as efficient as you can to prevent burn-out? How long can you continue as this pace? Is your "outputs" yielding a progressive return?

The formation of your new organization is not at all even mildly crazed, however the way you manage your time and tasks may very well be. What does the make-up of your team, volunteers, supporters, etc, how does that aid you day to day. Business is not insane, the way we conduct business, if not done correctly will drive us over the cliff and into the deep in.

The shortest distance from point A to point B is a straight line. I'm sure you've heard that before. If so, why all the sway? Corporately, we believe "sway" is our flexibility and our willingness to "customize". Not so, sway is creating distance between you and point B; and point B is what you view as success.

Be smart about your day to day steps toward organizational sanity!Start by simply getting incorporated and speaking with professionals to strategize your success. Contact The Corporations Bureau today.

IRS Note: Business Income

The IRS (Internal Revenue Service) is a vital link to the small business sector. Get familiar with the IRS.gov link to best assist you in many helpful areas of your business start up and maintenance.

Much of our consultation to you in the formation and strategy portions of your start-up is verse for verse per IRS policies and procedures. The Bureau gathers the information from many government links, sources and credible resources that are not only verifiable, but tested.

Take a look here for additional information regarding filing tax forms in relation to your Business Income. Contact us at the Bureau for further FREE tax assistance relating to your small business. We are here to help you!

What the heck is Bootstrapping (financing)?

Bootstrapping, the act of avoiding external investors, means going solo in the financing department, all the while keeping expenses to a minimum. Many business schools widely promote the use of external investors. They teach you to write a lengthy, in-depth business plan and then pitch it to investors. This isn’t always an option for many entrepreneurs, however, nor is it always the smartest route. Finding outside investments, like venture capital or bank loans can be tough, not to mention time consuming.

Getting a small business loan from a bank is difficult because startups are risky ventures, and banks are not known for their risk taking. That’s not to say that small-business loans aren’t out there, just don’t hold your breath. Small business grants from the government work similarly. They’re hard to come by, and the time it takes to search for them could be better spent working on the business itself.

Most startups try to go the route of venture capitalists or angel investors (also known as angels), but these two types of external investors can also be a tough sell. Venture capitalists invest billions, but they do so for only a select number of ventures. They’re generally interested in larger investments and are more willing to invest money in companies that already have a solid base. An angel is typically an affluent inpidual who provides capital for startups. The problem with pitching an angel is that it can be very difficult to find the right one and then actually grab his or her attention.

Financing your business the conventional way—with someone else’s money—involves spending a lot of time chasing deep-pocketed investors who are statistically not likely to be interested. Bootstrappers, on the other hand, focus their energy on making money and being smart with it. Along the way they tend to learn more about money management and finance than those who start out with loads of someone else’s cash.

Bootstrappers get financing in several different ways. Some of the more common forms are credit cards, second mortgages, personal savings, or friends and family. This may sound risky, but there is a reason bootstrapping is increasing in popularity.

Bootstrappers maintain a customer-focused mentality from day one. Externally-funded business owners are often fooled into thinking that they already have a business because they can pay salaries and rent, but the truth is you only have a business when you have paying customers. Bootstrappers have nothing but their customers to focus on. They also build cost-effective businesses right off the bat. You can't waste much money when there isn't much money to waste. Bootstrapping is a solid investment for anyone with the determination and brainpower to find a way to make it work.

Tips to ease the process:

Plan ahead for your startup needs by establishing good credit. Being an entrepreneur is risk enough for many creditors; don’t give them another reason to deny you. Cut your overhead costs down to the bare essentials. Every penny you unnecessarily spend cuts into your ability to succeed.

Do it yourself as much as you possibly can. Even if you don’t know a lot about a particular subject matter, you can always read up on it.

Plan for success, not for failure. Planning ahead for failure seems like the smart thing to do, but by removing all possibility of failure from your mind, you’ll be more likely to succeed.

Getting things right is important, but it’s still more important to get them done than get them perfect, so don’t be afraid to be a little “reckless” in that regard.

Don’t write off the use of external investors. For some startups they’re the right choice, but so few startups have that choice. Instead the majority of them are forced to start with little or no money. Don’t be discouraged if you’re one of those entrepreneurs, it’s probably a blessing in disguise. Bootstrapping is a risky venture, but the payoff is usually worth it in the end.

Count up all the costs of your business start-up!

There's no way you can start and build a successful small business if you don't have the funds to back it up. Yet so many first-time business owners greatly misjudge the amount of money they'll need to get their business off the ground. That's why so many new businesses fail. You may think you have a pretty good ballpark estimate, but that's not good enough. You need a detailed map with solid, well-researched numbers.

Here at The Corporations Bureau, we want to make sure that you consider all the "valid" costs. The CB is designed to assist all the small business owners and entrepreneurs out there in obtaining all the success they desire at a nominal cost. Unfortunately, many organizations out there greatly profit from your desire to launch a new start up...to the point, where they grossly overcharge minor services provided. And in many other cases, the CB has found reputable organizations charging for services that are normally provided to you for free! (What you don't know, hurts you).

The first thing you need to do is figure out exactly where your costs are coming from. There are two different kinds of costs—initial costs and ongoing costs. Initial costs are one-time expenses that are needed to set your business in motion. Ongoing costs are those expenses that you anticipate paying again and again (could be weekly, monthly, annually, etc.). Start by making a list of ALL your initial costs, no matter how small or insignificant.

Initial costs you should consider:
Incorporation
Legal fees
Accounting
Licenses and permits
Rent and security deposit
Signage
Transportation
Insurance
Building/remodeling
Supplies
Initial inventory
Furniture and equipment
Installations


It's not enough to consider how much a large piece of machinery costs. You also need to think about the costs involved with transporting it or setting it up. Everything needs to be accounted for!

Now do the same with your ongoing costs.

Ongoing costs you should consider:

Rent or mortgage
Utilities
Supplies
Business insurance
Inventory
Attorney. CPA or professional fees
Payroll
Health insurance
Equipment/machinery lease payment
Building/landscape maintenance
Advertising/promotions
Delivery expenses
Loan payments
Credit card charges


Figure out exactly what maintaining your business will cost you on a month-by-month basis. When you review your monthly financial statements, you'll be able to gauge whether you're on track and if adjustments need to be made.

Now that you have a tally for both types of costs, add extra money to each and consider this miscellaneous. Extra unforeseen costs are always going to come up, so you want to be prepared for them.

What you should have now is a total for your initial costs and a total for one month of ongoing costs. Take your one-month total and multiply it by six. It is generally recommended that you have enough cash on reserve to keep your business going for six months. Some might recommend a full year, but make sure you prepare for at least a six-month period.

Many of the expenses that you will incur can be difficult to gauge. That's why you need to do sufficient research. The best way to start is to talk to people who have already started similar businesses. You obviously won't want to approach direct competitors, but talking to related businesses or businesses in a different geographic area might be helpful. Trade associations can also be a wealth of information. Many have startup packages that can help you in calculating your startup expenses. Suppliers, manufacturers, distributors—they're all excellent resources for figuring out costs. Call them and tell them that you're planning to start a business and are looking for costs. Ask about things like bulk-buying discounts, startup inventory packages, credit terms or anything that might lower your cost. Make sure you contact several sources to get an accurate picture of these costs. You can also always check out websites or libraries for information.

There is no one-stop-shop type of resource for accurately researching startup costs, but as long as you keep digging and ask plenty of questions along the way, you'll eventually come up with accurate numbers. The thing that you need to remember is that good research is invaluable. It can tell you whether your business idea is financially feasible and give you a better picture of what your place is in the market.

When you actually get your final tally, you may be surprised by how expensive a startup can be. This may even prompt you to review your expenses and slash the things you can live without. Talk to an established business owner to see what suggestions he or she might have for bringing your numbers down to a more manageable level.