Starting a Business...Do's and Don'ts and General Help

After years of talking about it, I've decided to start a business and begin guiding inshore/nearshore fishing trips as my own entity. As much as I would love to, I won't be able to quit my day job and pursue it full-time.....yet. That's always been my dream but we'll have to see where this goes. Currently, my benefits are just too important to leave what I'm doing and since we just bought a new house, I have to continue working for the man since I'm currently the only stable source of income for Alicia and I. As she continues to build her clientele, we're starting to see a little more financial flexibility.

I'm well aware of the volatile nature of the fishing business, one I was forced to step away from 3 1/2 years ago, which is why I've been concentrating all of my effort on a professional career working a "big boy" job. God has been good to us and hard work has paid off with a career path that's on the fast track. But, my head and heart are always somewhere else. I don't need to be rich. I just want to WANT to wake up for work every day. If this opportunity pans out and I'm able to one day modestly provide a secure well-being for Alicia and I doing what I love, that will make me the richest man in the world.

I've accrued quite a bit of leave in my job, which I'm able to use pretty liberally, and I also have most weekends off. My plan is to run as many trips as I can on weekends, and if the demand is there, take trips during the week using my "vacation time." I've got the Captain's license, boat, gear, the I know how to catch fish (one of the few things in life I will arrogantly proclaim.) Fortunately, the great Capt. K tought me the ins and outs of the hard part, putting customers on fish and making sure they have a great time doing it, essentially the entertainment. But, when his lost interest and other mitigating factors collided, the business side of things crumbled.

I've got two major outlets which I think could really make this thing take off. Though, building a solid reputation as someone who can produce and getting references are going to be the most important keys to sucess. My roomate from college is in the IT field and will build my website and I've got what I think is a great business plan to make this thing sucessful. Most importantly, I'm surrounded by family and friends who have given me unwavering support to "go for it." I have no debt own all the capital I need to get this thing started.


SO..... the part I know nothing about. How to RUN the business and make sure I'm setting myself up for sucess.

The part I'm really fuzzy is the legal side.

S- Corporation of LLC ...Which one is "best" for me? I understand an S corp may have significant tax savings, but I also understand that I can be liable under certain circumstances. Is that correct, in a nutshell? Also, it seems much more complicated when it comes to taxes. Leading me to my next question...

Do I need to hire an accountant, or is this something that I can handle on my own? With an LLC, it appears that I could manage it on my own; Not so sure about the S-Corp. I'm good about saving expense receipts, documentation, etc...but I'm not sure how all of that works when you own the business and the part of writing things off and depreciating the business confuses me.

Is an accountant a major expense, or is it negligible based on what they do for you and potentially save you? Really, that's the only thing financially I haven't planned for in this venture.

I'm sure I've got many more questions and I don't even know them yet, but these are just some of the concerns I've had by scratching the surface. My goal is to register my corporation with the State by the first week in January and then secure other licenses immediately following..


Please, anyone who owns their own business....Give me your advice, good or bad. I need to hear it. I'm excited and would VERY MUCH appreciate learning from your mistakes.

Thanks in advance!
They Can't Us "You Should Have Been There Yesterday"...........Because We Were!

Replies

  • Jolly ManJolly Man Posts: 967 Officer
    Talk to an accountant it will pay for itself in peace of mind. Congrats i wish you the best of luck and may hire you sometime.
    The only thing we can do is play on the one string we have, and that is our attitude... I am convinced that life is 10% what happens to me and 90% how I react to it. - Charles Swindoll
  • KayakMacGyverKayakMacGyver Posts: 1,005 Officer
    Thanks Drew. Though, I wish you wouldn't have replied to my thread with your post count turning over to 666 after your response. Crap!
    They Can't Us "You Should Have Been There Yesterday"...........Because We Were!
  • BodineBodine Posts: 2,954 Captain
    Talk to Bottomline, you should know her.
    If you do not, I will give you her contact info.
    F the feds
  • fsuwxmanfsuwxman Posts: 1,278 Officer
    An astute CPA will pay dividends many times over
    2015 FS Northwest Forum NASCAR Champion
  • KayakMacGyverKayakMacGyver Posts: 1,005 Officer
    Seems like we have a consensus and I will heed the advice. Jeff, please pm me Lisa's contact info when you get a chance. I haven't seen her in a couple of years but she was always very kind to me when I talked to her in the past. I'm sure she will be great to talk to and if I remember correctly she is a licensed captain as well now...she may have even set up a similar entity for herself.
    They Can't Us "You Should Have Been There Yesterday"...........Because We Were!
  • PineywoodsPineywoods Posts: 128 Deckhand
    We did a Chapter S Corporation for the tax benefits after talking to a good CPA. The business we sold down south was also a Chapter S Corp. A good accountant will save you way more money than what you pay him. He knows depreciation and all that good stuff so I don't have to. A good computer program such as QuickBooks is another great tool I enter the data put it on a thumb drive and take it to the accountant. One of the other big things is finding a good insurance agent that does commercial. One that will get you what you should have but not all the stuff you don't.
  • limitlesslimitless Posts: 635 Officer
    An accountant will pay dividends in the beginning especially. I would think an LLC will be the best business entity for you to establish, and should provide tax benefits for business expenses while providing liability protection. Even with an LLC you will probably want a blanket liability policy - a good independent insurance broker can advise on amount you'll need and shop prices for you. Set up a separate checking account for your business and never mix funds in your accounts. You will want a website, Facebook page, etc. for the business and you will need to become a social media marketing guru. Try to barter for some of the services you need in the beginning - trade fishing trips for website development and even an accountant. You should read Dave Ramsey's book "EntreLeadership", it will provide a great deal of info for you on starting and running a biz. I think they are on sale on his website store right now, or I have a copy you can borrow; if you want it PM me your address and I'll send it to you.

    I'm throwing an edit on since I seem to have a different idea on how to form. I've done 3 businesses and all have been LLCs rather than a sub-S. The LLC was the simplest and least work for me v. the accountant. Again though, go with the advice of the accountant you retain.

    The Snook & Gamefish Foundation is now the Angler Action Program: http://angleractionfoundation.com/  Dedicated to Conservation and Education.  Please check us out.

    Angler Action Program: IAngler app trip log on your phone

  • BodineBodine Posts: 2,954 Captain
    Sent

    You can also talk to Chuck Simpson, he has run a limited guide service for years,
    while maintaining a "regular" job.
    F the feds
  • J LJ L Posts: 71 Deckhand
    X2 on talking to an accountant and on getting quickbooks and learning how to use it.

    When I set up my construction company, everyone said to do an LLC. My accountant said otherwise and recommended an s-corp so I didn't get double taxed.
    Custom Built Boat Transom Bars
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  • limitlesslimitless Posts: 635 Officer
    J L wrote: »
    When I set up my construction company, everyone said to do an LLC. My accountant said otherwise and recommended an s-corp so I didn't get double taxed.

    You dont get double taxed with an LLC either. It's really more of a liability consideration. Again, as everyone does agree on, get a good accountant.

    A limited liability company (LLC) is not a separate tax entity like a corporation; instead, it is what the IRS calls a "pass-through entity," like a partnership or sole proprietorship. All of the profits and losses of the LLC "pass through" the business to the LLC owners (called members), who report this information on their personal tax returns. The LLC itself does not pay federal income taxes.

    S corporations are merely corporations that elect to pass corporate income, losses, deductions, and credit through to their shareholders for federal tax purposes.

    The Snook & Gamefish Foundation is now the Angler Action Program: http://angleractionfoundation.com/  Dedicated to Conservation and Education.  Please check us out.

    Angler Action Program: IAngler app trip log on your phone

  • J LJ L Posts: 71 Deckhand
    limitless wrote: »
    You dont get double taxed with an LLC either. It's really more of a liability consideration. Again, as everyone does agree on, get a good accountant.

    A limited liability company (LLC) is not a separate tax entity like a corporation; instead, it is what the IRS calls a "pass-through entity," like a partnership or sole proprietorship. All of the profits and losses of the LLC "pass through" the business to the LLC owners (called members), who report this information on their personal tax returns. The LLC itself does not pay federal income taxes.

    S corporations are merely corporations that elect to pass corporate income, losses, deductions, and credit through to their shareholders for federal tax purpose s.

    Best advice is talk to a knowledgeable accountant. It's worth it.
    Custom Built Boat Transom Bars
    Click HERE to see more pictures
    [SIGPIC][/SIGPIC]
  • stc1993stc1993 Albany, GA Carrabelle, FLPosts: 5,647 Admiral
    An accountant will pay dividends in the beginning especially. I would think an LLC will be the best business entity for you to establish, and should provide tax benefits for business expenses while providing liability protection. Even with an LLC you will probably want a blanket liability policy - a good independent insurance broker can advise on amount you'll need and shop prices for you. Set up a separate checking account for your business and never mix funds in your accounts. You will want a website, Facebook page, etc. for the business and you will need to become a social media marketing guru. Try to barter for some of the services you need in the beginning - trade fishing trips for website development and even an accountant.

    My wife started an LLC, if I remember correctly she had to pay a lawyer $800 to incorporate her business with the state. The state took over from the county in her line of business, before that we only had to pay city business license our taxes was included in our personal filings. You definately need a good accountant. Like Limitless said you can barter for services. Our accountant would do our end of year taxes business & personal for staying at our place in Carrabelle for a week after tax season. We still had to pay for quarterly filings.
  • KayakMacGyverKayakMacGyver Posts: 1,005 Officer
    Definitely going to talk with an accountant at this point. I figured I'll start with Lisa and branch out from there if necessary.


    I like the idea of bartering services. I'll definitely try to work that out when applicable. Really excited to put my name on something, own it, and have a bunch of fun doing it.

    Thanks again for the solid advice thus far....
    They Can't Us "You Should Have Been There Yesterday"...........Because We Were!
  • CranfieldCranfield Posts: 1,420 Officer
    Not being local , I can't advise about the technicalities, but getting a good Accountant works the world over.
    You also mention, " I have no debt own all the capital I need to get this thing started", this is also an excellent situation, as one warning I would give, is don't stretch on borrowings, before you are more than just confident of your income.

    I get the impression there are very few full time Guides , all those I know, or have ever heard of, have a "real" job to back them up.
    With the vagaries of the weather,, the economy, fishing legislation, fuel costs, etc., it would not be high on my lists as an investment opportunity.

    You are a level headed person and I know you will make a success of anything you put your mind to.
    Go for it, but keep an eye on the weather.:)
  • jcbcpajcbcpa Posts: 1,669 Captain
    As everyone has advised you, hiring a CPA to assist you will pay dividends.
    There are advantages to incorporating and electing S status and there are
    also advantages to organizing an LLC. There are also disadvantages to both.
    Your CPA can advise you of both.
    Also, talk to your CPA before you buy your software. Not all like or use Quickbooks.
    I can't give you a sure-fire formula for success, but I can give you a formula for failure: try to please everybody all the time.
    Herbert Bayard Swope
    US editor & journalist (1882 - 1958)
  • DukesFinDukesFin Posts: 585 Officer
    1. Accountant
    2. Legal Zoom
    3. Quickbooks
    4. File Everything (business license, insurance, bonding if needed... EVERYTHING) from the get-go.

    We started as an LLC at first, then moved to LLC S-Corp so I could cut paychecks to myself and my wife with taxes taken out. We "eat" profit through paychecks and bonuses. We no longer stroke $20K+ checks to the IRS every year. Our accountant had us "break even" on corp taxes last year and wow, what a relief that was! I think we owed the Feds $10 and the state even less! Every business will be different but the pride in doing something on your own is WELL WORTH THE WORK!!!!

    Glad to hear you are pursuing a dream! You never know until you try, right? Good luck and remember this: Don't skimp on the legalities. Sure enough, if you don't do something right, the gov't will find it and you'll pay more in the long run so do it right from the beginning!

    Oh... MOST IMPORTANTLY:

    HAVE FUN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
  • whiteelephantwhiteelephant Posts: 27 Greenhorn
    Get BBB to take a look at your insurance needs including liability!
  • seabiscuitseabiscuit Posts: 1,033 Officer
    Congrats KM! The fact that you have already worked in the charter business should help immensely with the learning curve. Good idea to keep the other job for the steady income at least until you have enough recurring client revenue to make a living. I look forward to chartering with you!
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