Category: Business Development

Bootstrapping a Business

One of the most common ways that a new business is started his by a direct investment from the owner. This is commonly known as bootstrapping especially if the entrepreneur is working on a very small budget in order to get the business up and running. While this may be a struggle in the beginning stages of the business, the benefits for bootstrapping or self funding a business are tremendous.

Foremost, the owners able to start the business completely with their own capital and they are going to be able to retain a 100% ownership interest as the business grows. If the owner is able to bring the business to profitability within a two-year period than they are going to be an excellent candidate for a business loan away working capital line of credit for expansion purposes. This eliminates the need for a private investor which would dilute the ownership interest of the business substantially.

Most banks and lenders are very receptive to providing capital to companies that have been in profitable operation for a two-year period. As we discussed throughout this website, there are a number of different loans and start fund financing available for start up businesses, but they do come at a price and there these are only available for specific industries. For companies that require a substantial amount of working capital, most banks and lenders are not willing to provide this money and that it is for something like a professional practice including doctors, lawyers, accountants, or other individuals that a hold  professional license to practice.

One of the other benefits to using your own capital start a business is that when it does come time to raise capital – even if you need funding from a private investor – the terms which will receive the funding will be substantially better than that of when you’re startup business. Companies that are operational in profitable already have a substantial amount of value built into the company – and as such, they can negotiate a much lower ownership interest in the business among a private funding source. Most importantly, this will allow the entrepreneur to obtain substantial control over their company even in the event where things do not go as planned and the private funding source need some additional capital. This is going to be one of the key things that we discuss on a continuous basis throughout this website at his as it is a topic that we are frequently asked about on an ongoing basis.

Bootstrapping a business or using owner provided funds for company also allows these companies to grow at a much quicker pace given that less time is allocated towards having the source capital. Smartly, many technology businesses rely significantly on the talents of their owners and related companies are able to start their businesses for a very low cost. As such, if your business does not require substantial amount of startup capital and it may be in your best interest to use your own funds in order to get things up and going before you seek outside capital.

One of the ways that entrepreneurs will frequently fund their business with is through the use of credit cards. This is an expensive option for most entrepreneurs given that most credit cards are unsecured and have an annualized interest rate ranging anywhere from 10% all the way to nearly 30%. As such, unless the entrepreneur is able to generate substantial amounts of revenue from the usage of buying assets via a credit card and is typically in the best interest to you savings or other types of capital in order to fund business operations. In some cases, retirement phone funds can be used for this establishment of a new business. However, there are a significant number of considerations that need to be put in place if the individual is going to use retirement funds from a 401(k) or individual retirement account. This is primarily due to the fact that there are tax consequences with using funds from these accounts. As such, if an entrepreneur does intend to use funds from a retirement account and they absolutely need to speak with a certified public accountant in order to ensure that they are remaining within the letter of the law as it relates to the removal of these funds. Your account when were related professional may need to establish a new account or file appropriate paperwork in order to showcase the fact that the money being used from a retirement account is being used for a qualified purpose. As always, if you intend to start a new business then you should always consult with a certified public accountant, lawyer, and related professionals before engaging in any activity as they do have varying tax consequences.

In conclusion, bootstrapping a new company can be when a rewarding experience or sport newer given that they did not need any outside capital in order to bring the business to profitability. It also provides a significant advantage as it relates to raising capital down the road given that the terms that are going to be offered are going to be much better than when the business was just a concept or start up.

Attorneys and Small Businesses

One of the most important people you can have when developing a new business is an attorney. Certainly, the entire focus of this website has been and will continue to be on business planning needs but having an attorney by your side will ensure that you are operating within the letter of the law as you develop your business and as you progress through your business operations. An attorney is especially important if you are raising capital from the private investor or a number of angel investors.

Foremost, these types of activities can fall within the realm of securities laws. As such, an attorney can assist you in determining whether or not your capital raising activities need to be examined by a state and the federal regulatory agencies overseeing the sale of securities. There are a number of safe harbor rules and other regulations allow for the sale of private securities without having to go through an extensive registration process, but only an attorney is qualified to make that determination on your behalf. Most business attorneys are able to properly examine these issues and provide you with qualified legal advice as it relates to your capital raising operations. In some cases, and as we have discussed throughout this website, you may need a private placement memorandum in order to ensure that investors understand all the risks that are associated with providing capital to your business.

Beyond the startup phases of your business, an attorney can assist you with ongoing legal questions that may arise as you conduct revenue generating activities. This is especially true if you operate within a heavily regulated industries such as finance, healthcare, telecommunications, or specialized online based businesses. Your attorney will be an invaluable source of information as well as it relates to general business operations. Most lawyers have extensive training in regards to thinking strategically, and they can not only provide you legal advice but business advice as well. Of course, billable hours by lawyers are very expensive she may want to keep these down to a minimum but they can be very helpful if you are formulating a new strategy as it relates to providing a new product in the market.

Often, your attorney will work very closely with your certified public accountant to make sure that your business operations fall completely within the letter of the law only from an operating perspective but also from a financial perspective as well. Some entrepreneurs opt to hire a tax attorney who can provide them with both advice regarding the general operations of business coupled with insights as it relates to the company’s financial operations. Most tax attorneys are very expensive, and only large-scale small business were medium-size corporation typically retains a tax attorney on an ongoing basis. On an ongoing basis, we are going to discuss the professionals that you’re going to need to hire not only during the start of phases of your business but also as you progress through expanding and developing her operations.

As it relates to startup functions, your attorney can assist you not only in developing a business plan but also developing the operating agreement that may be required if you are starting a limited liability company. Most attorneys also will provide services as it relates to registering a corporation or a limited liability company. In some cases, your attorney’s office can also double as a registered agent. However, make sure your attorney provide the service before you list their address as the service of process address on any incorporation forms that you are producing.

In closing, your attorney can be a great ally as it relates to the development and expansion of your business on an ongoing basis. You can estimate that on a yearly basis attorneys fees will generally run about 4% of the revenues generated by your company. However, for certain smaller businesses feel advice may just be needed on the incidental basis but it is always good to have an attorney on retainer in case an important matter needs to be discussed.

How to Start a Sports Bar

As far as starting a new business goes, starting a sports bar is a pretty straightforward process. The primary complexity that most entrepreneurs face when developing this type of company is the acquisition of a liquor license. This is going to be one of the more complicated aspects of creating a sports bar given that in most states the acquisition of a liquor license requires a waiting period, public hearings, and a substantial amount of paperwork that needs to be filed with the state as well as most municipal agencies. Of course, the most important thing to do when planning to start a sports bar is to retain a highly qualified attorney in order to walk the entrepreneur through the liquor license application process. This usually takes out 45 to 90 days in most jurisdictions although some states have far more rigid laws as it relates to the issuing of these licenses. In most states, the average cost for the acquisition of a liquor license runs anywhere from $5,000 to $10,000 although in more stringent states these fees can run anywhere from $50,000 to $100,000. Of course, before even beginning to think about starting a sports bar – it is imperative that all the underlying costs are determined so that appropriate arrangements can be made during the business planning process. While most entrepreneurs that are developing sports bars wait until they receive their liquor license back before commencing operations, a substantial amount time can also be spent planning for the business during this waiting period.

 

As it relates to the corporate structure of most sports bars, most entrepreneurs typically use a limited liability company or S corporation in order to carry out their operations. A qualified certified public accountant can assist any entrepreneur with determining with the most appropriate structure for the business should be. Most importantly, the sports bar is going have a number of different business partners – some who may be operating partners and some that may just be contributing capital as members – it is important that a well drafted operating agreement is put in with the formation documents. The vast majority of states require that an operating agreement is submitted as part of the overall application process and forming a new limited liability company. This is true even when it is going to be a single-member limited liability company. Both an attorney and a CPA can assist greatly with this part of the process especially if a limited liability company is going to formed and it is going have a number of members. A properly produced operating agreement can substantially reduce any ongoing issues that these businesses may face as it relates to potential disputes down the road.

 

The vast majority sports bars are typically financed with a combination of owner funds, investor funds, as well as financing for a bank. Given the highly predictable streams of revenue and high gross margins generated from alcohol sales, food sales, and cover charges – most financial institutions are receptive to providing a business loan or line of credit it is principally going to be used for the acquisition of tangible equipment and liquor inventories. It should be noted that most banks do not provide capital as it relates to the ongoing expenses of the business. Is this portion of the capital structure that is usually put up by either the entrepreneur or investors. As it relates to the acquisition of of equipment, most sports bars typically have a small kitchen, and these pieces of equipment can typically be financed either with the proceeds of a business loan or via lease.

 

There are tremendous benefits to either using a lease or loan depending on how the certified public accountant wants to have the finances of the business structured. As it relates to leasing, this can substantially reduce the risk associated with starting a new sports bar given the fact that in the event of a business failure the equipment can simply be returned and the lease will be terminated. Most specialty leasing companies do have certain clauses within their contracts that provide an entrepreneur with a way out given the fact that many businesses do struggle and can often fail. With the usage of a business loan, the entrepreneur gains the benefit of being able to deduct both the depreciation as well as the interest associated with any borrowed proceeds and any purchase of equipment. A qualified accountant can assist the entrepreneur in determining which capital structuring makes the most sense to balance sheet perspective. In the event that leasing is used, this will create cleaner balance sheet that will allow for the easier acquisition of expansion capital down the road.

 

Sports bars have to have a number of employees on staff including bartenders, wait staff, security staff, administrative personnel, as well as a bookkeeper. As it relates to bartenders and wait staff – these individuals are typically paid primarily on a tip basis. As such, the annual expense for most bartenders and wait staff typically ranges anywhere from $12,000 to $20,000 a year depending on the state and depending on the number of hours worked by these individuals. It should be noted that most days to have a minimum threshold as a how much money a bartender or wait staff member can make – and it is imperative that the owner be able to compensate these employees in the event that their tips do not exceed the minimum wage. As it relates to administrative staff and bookkeeping staff, for most sports bars these are considered to part-time positions. If it is a full-time position than the owner can expect to spend anywhere from $22,000 to $30,000 a year on an administrative assistant and $500 to $1,000 per month on a part-time bookkeeper. Only in instances where an entrepreneur owns a number of sports bars do these individuals to become full-time employees given the fact that numerous locations need to be managed.

 

One of the key things when focusing on how to start a sports bar is the development of a marketing plan. It is no secret that there are usually tens if not hundreds of nighttime entertainment venues in most suburban and metropolitan area markets. In major metropolitan areas, especially in major markets like New York, Boston, Miami, San Francisco, and Los Angeles – there typically thousands of bars in operation in the specific markets. As such, it is very important that the entrepreneur develop a number of promotions and methodologies that will allow the business to effectively differentiate itself from other competitors in the market.

 

The vast majority of sports bar businesses use a broad-based localized marketing campaign that typically includes billboards, television advertisements, highly vigilant visible retail signage, as well as use of radio promotion. Especially among larger scale sports bars, the use of radio promotion among regional radio stations still remains very prevalent. A sports bar owner can anticipate that anywhere from 1% to 4% of revenues will be allocated towards ongoing marketing expenses.

 

Beyond the acquisition of a liquor license, it should be noted that most states also require that a sales tax license is issued as well. In most cases, all food and alcohol served by a sports bar is going to be subject to sales tax. However, these rules and regulations can vary by state to state as well as by municipality to  municipality – and as such, it is important that an attorney also advise the client as to what sales are going to be considered taxable. It should be noted that there are also a number of pieces of sports bar management software that are available that assist in making these determinations so that mistakes are kept to an absolute minimum.

 

Sports bars are going to be one of the most popular venues for nighttime entertainment moving forward. Always all Americans joy enjoy a substantial amount of sporting activity, and they will be able to always find an audience. One of the key things that many sports bars have done lately in order to differentiate themselves from other competitors is offer a huge selection of high quality foods that are torque normally found in these types of businesses. Some places have also taken to integrating fusion dishes into their operations in order to create a repeat customer base. The high gross margins generated from these businesses coupled with their moderate startup cost that typically range anywhere from $100,000 to $200,000 makes these attractive small business investments for an experience food and beverage entrepreneur. Once established, these businesses are generally always able to produce a substantial amount of predictable income on an ongoing basis.

 

How to Start a Package Delivery Service

Package delivery businesses have become extremely popular over the past five years especially as companies like Amazon have taken to using third-party contractors to provide package delivery. The vast majority of package delivery services typically have low startup costs given the fact that the largest expense in developing these businesses is specific for the acquisition of delivery vehicles. In most cases, entrepreneurs and start new package delivery services typically seek to lease these vehicles in order to reduce their upfront expenditures.

As of most types of vehicle leases, a capital cost reduction is applied at the onset of operations, but this is usually a fraction of the cost that is normally associated with a down payment for a new vehicle. The gross margins that are generated by package delivery services are very high. One of the things that concerns most people when developing these types of businesses is that automation will eventually take over this industry, but this is not anticipated for at least another 15 to 20 years. Autonomous vehicles have begun to enter the market, but they are still very much in their nascent stage, and as such, this is a very limited risk at this time. Many package delivery services will continue to be extremely profitable and very lucrative for their owners moving forward.

There are numerous considerations that must be taken into account when an individual is learning how to start a package delivery service. For most, a qualified certified public accountant as well as an attorney should be hired in order to ensure that the business is able to appropriately secure all the necessary license to operate in this capacity. The US Department of Transportation as well as state-based departments of transportation always require that a numerous licenses are issued not only to the owner of the business but also to the delivery drivers. Each vehicle must be also be properly registered with federal and state government agencies especially if the business is going to be conducting a substantial amount of interstate commerce. However, these licenses are pretty straightforward to get in the paperwork required is considered a moderate. Most attorneys can assist an individual entrepreneur that is looking to start a new package delivery service with acquiring the necessary paperwork, filing the necessary documentation, and paying the requisite fees associated with launching this type of business.

As it relates to corporate structure, the vast majority of small businesses these days are started did by individual entrepreneurs that usually use a single-member limited liability company or S corporation. As always, a qualified certified public accountant should be retained in order to determine which corporate structure is most appropriate for this type of business. Each type of corporate organization whether it’s an S corporation, limited liability company, regular corporation, limited partnership, or related entity has its advantages and disadvantages. Additionally, each industry has its own issues as it pertains to overall legal liability and as such a qualified attorney in conjunction with a certified public accountant can ensure that the business is properly structured so that any issues down the road will be mitigated. The cost associated with developing a new corporation vary state to state but usually it’s in the $150 to $500 range. It should be also noted that unless the owner intends to use their address as their principal place of business than a registered agent may be hired in order to collect any official notices and documentation from state and federal government agencies. The cost on an annualized basis for registered agent typically range anywhere from $50 to $100.

Package delivery services always require significant number of employees to render services to businesses and the general public. These employees typically have a cost of anywhere from $20,000 to $50,000 a year depending on how much driving there doing. Usually, package delivery services that operate in a standard capacity can expect that they will have to pay an annual salary of $30,000 to $40,000 a year in order to have competent drivers on staff. Beyond just the driving staff, a package delivery service also requires administrative assistants, package management staff, logistics management, and a bookkeeper. Generally, these employees typically also cost around $25,000 to $50,000 per year. Many package delivery services, in some cases, will have their drivers treated as independent contractors rather than as direct employees. This can save a significant amount of money as a relates to the payroll taxes associated with having an employee on staff. However, a CPA should be hired in order to determine whether or not an individual can be considered as an independent contractor. There have been instances where income is reclassified as W-2 income rather than than independently contracted income. This is in a gray area and only a qualified accountant should be used to make this determination.

Returning to the capital structure of a business, package delivery services are again able to be started with a investment ranging anywhere from $20,000 to $100,000 depending on whether or not the vehicles are going to be leased or purchased. Expansion capital is readily available to most package delivery services once they achieve profitability. One of the nice things about this industry is that they are able to always generate income from the onset of operations. Companies like Amazon, UPS, FedEx, and the post office have all taken outsourcing certain portions of their ongoing delivery needs.

As such, the contracts that can be acquired to render the services immediately once a vehicle is acquired and licenses are required is significant. These businesses can readily expand by simply acquiring additional vehicles as well as hiring additional drivers. Banks, financial institutions, and private investors are all keen to provide the necessary capital in order to get these businesses off the ground. The return on investment is substantial from a capital expenditure standpoint. The marketing costs associated with these types of businesses usually considered to be minimal. Most banks will require that a business plan is developed in order to showcase with the anticipated revenues of the business will be and that the company can satisfy all underlying debt obligations or lease obligations.

As it pertains to the marketing, this can be done somewhat on the minimal basis. The vast majority of these businesses are able to secure contracts even before they begin revenue-generating operations by enrolling themselves in standardized programs that instantaneously dispatch packages to be picked up and delivered to third parties. However, some package delivery services will maintain ongoing relationships with area courier services and moving companies in order to provide these services on ancillary basis. This can help with smoothing out revenues during times when the package delivery service moves a little bit more slowly such as summer. In busy holiday seasons, especially around Christmas, package delivery services operate near 100% capacity at all times. Most package delivery services will maintain a small website just to have a legitimize presence when people look up the business’s name.

It is also expected within this industry the companies like Uber, Lyft, and related ride sharing platforms will eventually integrate package delivery services into their operations. There are now numerous companies that all so provide food delivery services as part of their overall operation. This can be another one of the ways in which a package delivery service maximizes its return on investment. Again, one of the great things about the logistics industry is that there is a readily them large amount of business available that can be service at the onset of operations. This trend is expected to continue in perpetuity as more and more people to man on demand services like ride sharing, package delivery, and food delivery. Companies like GrubHub have dominated the market with the specialized types of services, and this presents a substantial opportunity for an entrepreneur that knows how to maximize the return on capital investments like delivery vehicles.

This is an exciting industry, and package delivery services are going to have a substantial resurgence over the next 20 years. As more and more people demand products and services immediately, these applications and services have become very popular. The access the capital is substantial, the gross margins are moderately high, the barriers to entry are low, and for seasoned entrepreneur this can be a very lucrative opportunity. As always, it is imperative that any entrepreneur that starts any business – whether it’s a package delivery service or related company – keeps a close eye on all cash flow given the fact that there can be a lag between the time the invoices are paid and the underlying expenses occur.

How to Start a Dialysis Center

One of the most important things to first focus on when starting a new dialysis center is the type of capital that will be used in conjunction with the startup. One of the most important features to most people that are starting a new dialysis center is that they are able to acquire the equipment necessary to provide nephrology services to the general public either via a business loan or equipment lease. Given the very high expense of dialysis equipment, many people that are starting this type of business will typically turn to using leases rather than loans.

This creates a much cleaner balance sheet so that further growth via expansion capital can be readily obtained in the future. The startup costs are typically associated with the new dialysis center generally run anywhere from $250,000 to $1 million. It should also be noted that many startups of these types of businesses are done through private investment rather than the use of owner funds, leases, and business loans. It is important for the entrepreneur that is starting a new dialysis center to very closely monitor and track how they intend to use their startup capital given the fact that there are a substantial number of ongoing expenses that must be paid first before invoices for dialysis service are paid. Almost all dialysis centers receive a bulk of their money from private insurance companies, patient co-pays, as well as through Medicare and Medicaid. The capital structure of a new dialysis center can be determined by a certified public accountant or related professional. In fact, most entrepreneurs are thinking of getting this field typically will retain both a CPA as well as a qualified attorney to determine which laws are applicable and how the business should be structured.

As it relates to corporate structuring, most dialysis centers are usually started via a limited liability company or S designated corporation. However, there are some instances where a regular corporation is the more preferable method of developing this type of business. Only a certified public accountant and qualified business attorney should make the determination as to what corporate structure is most appropriate. Some states do have certain rules and regulations as a relates to medically focused and healthcare businesses. As such, a qualified attorney can make the determination as to what corporate structure is most appropriate and they can make the appropriate filings with the state. The cost associated with using an attorney or a CPA to complete a incorporation typically is around $500-$1000 depending on the work that is needed.

It should be noted that in many states a limited liability company must have an accompanying operating agreement that is submitted when a new corporation is filed. And it attorney can develop the operating agreement specific for dialysis center. This is especially important to note especially when they’re going to be a number of partners at the onset of operations. Now that all states allow for single-member limited liability companies, the operating agreement for these types of businesses is pretty straightforward. However, when there are going to be a number of partners involved especially when certain members are going put up capital while other members are going to provide services – this can get far more complicated. As such, a properly developed dialysis center operating agreement can reduce any of the potential risks that are associated with developing a business with a number of partners.

A number of employees also need to be hired at the onset of operations for any dialysis center. In the event that the owner-operator is not a nephrologist, and this business is going to have to hire a qualified medical director. This can be a very high expense as most medical directors have a minimal base salary of around $250,000. Additionally, if there are going to be a number of staff nephrologists than the owner can expect that they are going to spend at least $200,000-$300,000 per year per employee on base salaries. Many dialysis centers will provide their staff nephrologists with profit-sharing programs, health insurance packages, 401(k)s, and other benefits that are normally associated with providing medical services. There is currently a saturation of nephrologists in the market given the substantial amount of people within the United States that require dialysis. As such, it is relatively easy to source a new nephrologist that could potentially work at this dialysis center.

Beyond having staff nephrologist, these companies also require to have a number of specialty nurses on staff. Nurses typically have a yearly annual salary of $65,000-$100,000 depending on the specific market in which the business is going to be located. It should be noted that certain nurse practitioners that have extensive experience in the field of dialysis can be hired as well and typically have an annual salary of $150,000-$200,000. As with all types of employee planning, a thorough and well-developed employee handbook needs to be produced as well. This handbook not only showcases the procedures and protocols regarding each aspect of medical services rendered, but also provides the rules and regulations that guy just the general business operations. Each employee should review and sign this document in order to ensure that any legal liabilities from employment practices are kept to an absolute minimum. An attorney can also assist the new dialysis center with determining which liability insurance policies issued acquire including Workmen’s Compensation insurance. Beyond the medical staff, most dialysis centers also have extensive support staff that includes administrative assistants, scheduling managers, patient liaisons, as well as support staff for company executives. Generally, these individuals have salaries that range anywhere from $30,000-$75,000 depending on their experience and their role in the company. It is important to note that the most expensive thing about owning and operating a dialysis center is a substantial amount of skilled labor that is required.

Marketing a four dialysis centers pretty straightforward given the strong demand in most local and regional markets for the services. Owner-operators of dialysis centers typically have extensive relationships with area physicians including primary care doctors, other nephrologists, hematologists, and internal medicine physicians. In some cases, referrals may be required from these physicians in order to be able to provide dialysis centers services to patients. As such, the foremost way in which these businesses can be marketed is through ongoing extensive use of physician referrals. Many of the staff nephrologists that are employed by dialysis centers also have admitting hospital privileges at area hospitals and medical centers. As such, by retaining staff that already have extensive relationships with these entities – the ongoing costs relating to marketing can be reduced over time. Almost all dialysis centers also maintain a website that showcases the services rendered, insurance is accepted, hours of operation, and how to contact the dialysis center in order to make an appointment. In some cases, the company’s website will have a online portal where a appointment can be scheduled directly to the website. This can substantially reduce the cost of maintaining a customer service call center where patients need to interact with another human being. However, medical billing specialist should be available on staff in order to answer patient questions when they submit invoices to insurance or if there is an issue with reimbursement.

A qualified attorney should also be hired in order to ensure that the dialysis center means all the appropriate licensure not only with the federal government both state government agencies as well. There are a substantial number of licenses as well as regulatory permits are needed in order to operate a medical or health care facility. As such, ate an attorney that is very familiar with healthcare businesses will ensure that the business is operating within the letter of the lot all times. A certified public accountant or related professional can also assist the dialysis center with obtaining the licensure required by the federal government in order to receive reimbursement from Medicare and Medicaid programs.

Given that many people that are on dialysis often receive Medicare or Medicaid, it is imperative that these forms refill correctly so that reimbursement time is kept to an absolute minimum. One of the primary issues with owning a healthcare businesses that they typically have a lag between the time services rendered and the time that they get paid. Usually, this can be anywhere from 90 days to 120 days. As such, a substantial amount of working capital needs to be kept on hand in order to ensure that the employees and expenses a business can be paid while the company is waiting on its reimbursement.

The outlook for the dialysis center industry is tremendous. As more and more people from the baby boomer generation enter their later years and have kidney issues, the demand for dialysis and nephrology services is going to continue to increase significantly. As such, more and more of these companies are being started each day. One of the key things that can be done in order to remedy the risks associated with competition is by establishing numerous locations and having a streamlined methodology of ensuring that payment is acquired very quickly. In some cases, in order to reduce the risks associated with these businesses the industry as a whole has seen a number of people use outsourced medical billing companies in order to cost-effectively receive payment. It is expected that at least 500,000 people year are going to require dialysis within the next five years. As such, the industry outlook for the dialysis center business is tremendous.

One of the best things about these types of businesses is that they are wholly immune from negative changes in the economy given the fact that this is a medical business and people are going to get sick and require the services at any time. While the barriers to entry and start up costs are very high, once accomplished this creates a very strong degree of economic stability for these types of businesses. More and more people are turning to the specialty of nephrology in order to meet the anticipated demand over the next 5 to 25 years as people from the baby boomer generation continue to age. Any entrepreneur that has in the extensive understanding of the healthcare industry is in a strong position to receive the capital they need in order to develop these types of businesses.

 

How to Start a Limousine Company

Limousine companies are expected to remain in strong demand despite the fact that there are now a number of ride sharing applications. In fact, it can be expected that at some point one of the major ride sharing applications may have integrated functionality so that limousines and related large vehicles can be called upon on demand. This is actually a good thing for the limousine industry given that it will drastically increase the amount of business that is provided to limousine services. One of the biggest issues that many people have when calling a limousine is that they need to have a substantial amount of marketing in place in order to generate revenues. With the advent of ride sharing applications – limousine and taxi companies – can instantly receive customers for a percentage of the revenues generated. The barriers to entry for new limousine service are considered to be moderately low given that any individual can lease one of these vehicles and hold themselves out as a limo driver once they receive the necessary licenses. Typically, a simple commercial driver’s license is needed in order to provide these services to the general public.

The capital required to start a new limousine service can vary greatly by the number of vehicles that are going to be acquired at the onset of operations. Usually, most limousines have a cost ranging anywhere from $50,000 to $100,000. A typical fleet held by a limousine company typically ranges anywhere from $100,000 all the way to several millions of dollars depending on the number of vehicles are required at the onset of operations and through the course of business. It should be noted that many limousine companies will often turn to leasing companies rather than direct purchase.

The benefits of using a leasing company are that the vehicles can required quickly and with minimal upfront expense. Usually there is some form of capital cost reduction that is associated with a new lease, but this is small as compared to the overall acquisition of a new limousine vehicle. One of the other benefits of leasing is that it creates a much cleaner balance sheet for the limousine company as a seek additional capital to grow. During times of economic recession, this is important given the fact that lease rates do not increase while in some cases interest rates do rise for vehicle loans. It should be noted that it is somewhat uncommon for limousine company to have variable rate auto loans associated with their limousine fleet.

One of the drawbacks to a lease is that it is simply renting on a long-term basis for all intents and purposes. However, in the event that business is not do as well as planned, leases can be returned in some cases. As such, leasing is often considered to be a lower risk way of starting a new limousine company. The benefit of acquiring a limousine and fleet of limousine vehicles with borrowed money is at depreciation charges and interest charges can drastically reduce the overall tax liability associated with the business. At all times, a highly qualified certified public accountant should be hired in order to assist the limousine company with making the appropriate determinations as to which method of financing is typically the best way to go forward. It should also be noted that in the event that an individual is going to be purchasing limousine vehicles, they can expect that they are going to be required to put down 10% to 20% of the total cost of the vehicle as a down payment. The return on investment for most limousine companies is substantial – and ranges in the 20% to 50% range – given the fact that this is a service focused business.

As it relates the corporate structure, most limousine companies are structured as limited liability companies or S-corporations provided that it is a limited number of owners or single owner developing this business. Of course, there are benefits and drawbacks of each different type of corporate structure that could be employed when developing a new limousine company. The best way to go about this is to work closely with a certified public accountant or qualified tax attorney that can assist an entrepreneur in determining which corporate structure is most appropriate. There are also considerations regarding whether or not owned vehicles are going to be kept in a separate corporate entity rather than in the operating business themselves. Again, while this does translate into higher cost – the liabilities associated with a potential accident can be reduced in the event that multiple corporate structures are used when developing this type of business. Only a qualified attorney to determine whether or not several entities should be used for one specific operating business. This type of structure is commonly used with real estate investment firms that placed individual properties into limited liability or corporate holding entities.

A number of licenses are going to be required by the limousine company from both the federal government (for interstate travel) as well as state governments. Some municipalities also require that limousine drivers receive licensure from them in order to provide services to residents and businesses within the area. Many websites on the Internet have a plethora of information specific to what licenses, taxes, and registrations must be provided to municipal, state, and federal entities when working as a professional transportation company. Most local business attorneys will also be able to source this information for you and provide a significant amount of information about what ongoing registrations and filings must be made with the appropriate authorities.

Most limousine companies also require significant number of employees in order to render services. Although most of these businesses start by having the owner-operator drive limousines, increased demand requires that staff drivers are hired. As always, a large-scale employee handbook should be developed by both the entrepreneur in conjunction with the attorney in order to make sure that all employees are aware of the rules and regulations that guide the business on a day-to-day basis. Most importantly, for limousine business, these regulations include when an individual must show up to work, what licenses they must maintain, professional dress, as well as being informed of all other policies that guide the operations of the business. As it relates to cost, most limousine drivers can be hired for about $30,000 to $40,000 per year depending on the location. In major metropolitan areas, and with the popularity of ride sharing applications, some limousine companies have taken the paying substantially more to their limousine drivers in order to retain top talent. One of the ways that employees can easily be retained and motivated to provide great services by offering them not only a plethora of benefits including health insurance but also a profit-sharing program that allows them to earn additional income as a provide a greater degree of services for the company. Most limousine companies also hired dispatcher which typically runs around $27,500 to $40,000 a year. This is important to note especially among the missing companies are going to have a large fleet at the onset of operations. Administrative assistants, part-time bookkeepers, and related personnel are typically hired once a business or generating a significant amount of revenue usually in the hundreds of thousands of dollars.

Marketing is one of most important aspects of for any limousine company given the fact that these businesses must be able to secure ongoing usage of their vehicles in order to turn a profit. Many limousine companies will develop ongoing relationships with wedding planners, event planners, venue companies, and related entities in order to have their clientele use the business on an ongoing basis. Depending on the state, referral fees may be paid to third parties that successfully placed clients with the limousine company. Again and as discussed above, ride sharing applications are also becoming popular ways in which limousine companies can maximize the revenues generated from their fleets. As such, by enrolling the vehicles and drivers in applications like Uber and Lyft, limousine companies can aggressively produce additional income during weekly hours and during times where the use of a limousine is not often found.

In fact, many of these businesses will hang around areas where there are nighttime entertainment venues – like bars and nightclubs – in order to have large parties transported safely to and from their destinations. The ongoing relationship with corporate specialist as well is also an important marketing tool for many limousine companies given that executives and high-profile clients may require specialized transportation. Major corporate events such as golf outings, wine tastings, and large-scale parties typically require this type of transportation arrangement.

The outlook of the limousine industry is going to remain strong moving forward. People love to go out and limousines are not common vehicles that are purchased by individuals and as such the risks regarding ride sharing applications taking a substantial portion of the market are somewhat limited. In fact, these ride sharing applications are going to be a huge boon to many people within limousine industry as a can substantially increase the return on investment associated with the leasing or acquiring these types of vehicles. In was every economic climate, the demand for limousine services remains moderately strong. Even during an economic recession, people are going to have weddings and events that do require large-scale transportation arrangement. As such, these businesses are typically able to remain profitable and cash flow positive at all times.

How to Start an Accounting Firm

People are always going to need assistance with taxes as well as starting expanding new businesses. Many people make the mistake of thinking that an  accountant simply does taxes on an annualized basis, and while that is a significant part of their job, a vast majority of the work that a certified public accountant does is specific for managing tax matters, providing consulting to small and medium-size businesses, and assisting people with obtaining financing for new business opportunities.

 

It should be noted that many accounting firms do not always have a staff certified public accountant, but rather operate in a more bookkeeping focused capacity. Both of these are considered accounting firms, and what makes the difference for these businesses is whether or not audits can be completed on behalf of a client. Many people enter this field in developing their own accounting firm have usually had substantial experience as an accountant. One of the benefits to owning and operating an accounting firm, especially among people and hold a CPA designation, is at the barriers to entry are moderately high for this type of business. It takes several years of school coupled with substantial work experience in order to become a certified public accountant. As such, these businesses do enjoy a strong degree of barriers to entry once they’re established. One of the other nice things about owning these types of businesses is that they produce highly predictable streams of revenue on a yearly basis not only from tax-preparation return but a host of consulting and financial services that are typically provided by these professionals.

 

As it relates the type of capital that is used for the development of an accounting firm, many of these individuals typically will use their own funds in order to acquire a small office and begin providing accounting services. However, most banks are happy to provide a working capital line of credit specifically to an individual to hold a CPA designation. One of the ongoing reasons why banks are receptive to this type of business is the high-margin and high predictable revenues that allow accounts to easily satisfy any underlying debt obligation.

 

In many cases, friends and family may also provide the necessary capital to start up a accounting firm given the low startup cost. Typically, these businesses can be started for as little as $10,000 or as much as $100,000 depending on whether or not the company is going to have a number of staff preparers or staff accountants at the onset of operations. Either way, the capital structure of a new accounting firm is pretty straightforward.

 

One of the things that is commonly done when starting a new accounting firm is the fact that a full-scale demographic analysis is usually produced in conjunction with a business plan and marketing plan. For any new CPA or general accounting firm, it is imperative that these organizations understand how many people are within the target market, their annual household income, median net worth, and the complexity of the tax returns needed by the market as a whole. In areas where there are a number of businesses, especially small businesses, certified public accountants and accounting firms tend to thrive given the complexity of the paperwork necessary to operate these businesses. This is why it is very important that a demographic analysis, which should also include a competitive analysis,when discussing and planning to start an accounting firm.

 

As it relates to corporate structure, this can vary state-by-state given that some states require that a CPA operate as a professional corporation rather than as a regular corporation or limited liability company. Of course, this is only a determination that an attorney should make for any individual account or certified public accountant that is going to be starting their own firm. Most attorneys can do to make this determination very quickly and at minimal expense.

 

All accounting firms also need a number of employees especially as they expand. Although many of these firms start with simply the owner-operator conducting all operations, the there is a quick need to have an assistant, staff tax preparers, staff certified public accountants, and related professionals that can assist the owner on a day-to-day basis. It should be noted that some accounting firms have also taken the hiring certified financial planners and registered investment advisors in order to provide an integrated number of financial services for people that have their tax returns completed by the firm.

 

As it relates to the expense of these individuals, administrative assistants can range anywhere from $25,000 to $50,000 a year. Staff accountants typically have starting salaries ranging from $65,000 to $85,000 a year depending on the location. An accounting practice in a more rural or suburban setting will typically have lower employee costs versus a major metropolitan area where expenses are very high and higher salaries are required. As with any type of business that is being started, and account should have an attorney develop a large-scale employee handbook that showcases to each employee what their roles responsibilities are and what to do if any type of specific business issue occurs. In many cases, most workmen compensation insurance policies as well as related liability policies pertaining to employment require that the account have a employee handbook and that each employee sign it giving their understanding of the rules and regulations that guide the practice’s operations.

 

The outlook of this industry is tremendous given the continued complexity as it relates to taxes. There are more than 1 million accountants within the United States, this is primarily due to the fact that most individuals do not know how to properly file tax returns or know what is required of them when they start a new business. This trend is expected to continue especially as more and more people turn entrepreneurship rather than having a standard 9 to 5 job. The expected industry growth will remain in locks that with step with the general economy. It should be noted that one of the ways that many accounting firms are able to expand at a higher than average rate is by operating within a specific niche. There are many accounting firms that focus specifically on financing businesses, healthcare related companies, and related specific industries in order to differentiate themselves from that of other accounting and bookkeeping firms.

 

Marketing is one of most important aspects when developing a new accounting firm given the fact that most areas do have a certain level of saturation as it relates the number of practitioners. As such, most accounting firms engage in a broad-based marketing strategy that includes these of online as well as print media. At the onset of operations, many accountants – including the lows that hold the CPA designation – will frequently develop ongoing relationships with third-party financial planners as well as attorneys that can provide referrals. One of the key things when developing a professional practice to know is that referrals are worth a huge amount to these businesses given the fact that someone has vouched for the quality of the work offered.

 

Beyond just thriving off of referrals, many accountants will maintain expansive online presence via a proprietary website. This website should feature information regarding the firm, its staff accountants, hours operation, and may or may not have pricing information as it relates to standard services like tax preparation services. A presence on social media is sometimes warranted for a new accounting firm especially as people do seek referrals from friends and family when they are looking to retain the services of a new account. In some cases, especially for established firms, a marketing firm can be retained to manage all aspects of the marketing and advertising that is required by these businesses. Although this can be somewhat expensive, given the fact that most marketing firms do have a minimum retainer of usually $1000 the $2000 per month in order to provide services. However, in rural markets and in suburban markets these fees may be substantially less given that many marketing firms are looking to expand their client base and may offer substantial discounts at the onset of an engagement contract.

 

Accounting firms are to continue to be one of those important industries within the United States given the fact that they provide a service that is not typically a be able to rendered by other companies. One of the major threats it is faced by these businesses is the fact that there is a number of accounting software suites that allows individuals to complete the taxes on their own. However, for individuals that generate income besides as a paycheck – these pieces of software do not really provide the same level of professional support that is needed by a licensed professional or small business owner. The complexities regarding tax reporting for small businesses and any other corporation is substantial, and qualified advice from a certified public accountant is always going to be valued and in demand. It is not uncommon for a highly experienced and well marketed accountant to earn incomes ranging anywhere from $200,000 to $400,000 per year once they  have established a strong brand name for their firm.