Members vort Posted June 1, 2014 Members Share Posted June 1, 2014 It looks like what started off as a hobby is moving steadily into a business. Here was the progression: Started off as probably most here, buying sound equipment and lighting for the band, upgrading over the years. Then started using the equipment for other bands, and started a partnership with another musician who also was doing sound for another band. At this point, we are the official sound providers for 3 bands, adding another, and also may become the the provider for a local agency. Sounds impressive, but cards on the table, 3 of the bands are groups that one or both of us play in. However, we've been getting offers to run sound from not only word of mouth, but also at the gigs we're providing sound at. The agency may add additional clients. Seems like we're doing something right. So what are the next steps? I am very concerned about liability. I've been researching LLC's (in PA). I will be sitting down with an insurance agent regarding Liability Insurance. I don't know if we're ready to go the LLC route or not. I would be interested in hearing how others in this situation have handled it. Thank you. Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted June 2, 2014 CMS Author Share Posted June 2, 2014 Having an LLC does what its name implies...it limits the liability of the members personally. Company assets are separate from personal assets. Judgments against the company will rarely affect personal finances. Note that being an LLC requires a much larger investment in paperwork to manage and maintain the LLC, than say a sole proprietorship. Expect to pay $1000 and likely more in fees etc. to form the LLC, and legal assistance should be retained as well, especially in the beginning stages where things need to be explained and understood. Requirements vary per state. For a very basic starting point, go on LegalZoom and step through their LLC startup wizard to see what you'll need to do and get a pricing estimate. Your insurance agent will be able to explain what's available for liability coverage. You'll probably want a policy that covers both liability and company assets. You'll want to talk with an accountant regarding how to handle the finances, especially if you become an LLC. In all cases there are tax issues, and of course these also vary by state and locale. If you have employees ("helpers" will instantly become "employees" if you get "help" during a show and someone's injured), you will need Workman's Comp insurance, which your agent can discuss with you. You will need a very explicit legal agreement spelling out ownership of assets and ownership of same. All company's have a beginning, a middle and an end. Link to comment Share on other sites More sharing options...
Members Bill.ESC Posted June 2, 2014 Members Share Posted June 2, 2014 Talk to a Tax Account and or Tax Attorney and present them with all the information. The advise will be worth the fee. Link to comment Share on other sites More sharing options...
Members Pro Sound Guy Posted June 3, 2014 Members Share Posted June 3, 2014 You could do the pay insurance by the event. There was a link I had on the web and you could purchase a couple million in liablity for one event. Only an example and affordable. Link to comment Share on other sites More sharing options...
Members vort Posted June 3, 2014 Author Members Share Posted June 3, 2014 Thank you all for the advice so far. Pay by the event will be a route to look into, thank you for the tip. Depending on the cost, it may be something that can be passed to the customer. I feel like I'm on the edge of a pool, dipping my toes into the water, but not sure how to jump in. I definitely want to make sure I'm doing this right, especially with the partnership aspect. Perhaps hold off on an LLC until we're sure this will really "be a thing"? Anyone care to share stories of their first startup? Thank you. Link to comment Share on other sites More sharing options...
Members Audiopile Posted June 3, 2014 Members Share Posted June 3, 2014 Anyone care to share stories of their first startup? Where to start, where to stop with the story. I guess I'll leave it at this: If I knew what I now know then, and I was the age then that I am now... it's likely it never wouldn't have happened. Especially if I look back and did then what I'd do if I did it all over again. But, if I had it to do all over again, knowing what I know now... well... I'd have certainly set-up Peachtree and then QuickBooks up differently. Link to comment Share on other sites More sharing options...
Members agedhorse Posted June 3, 2014 Members Share Posted June 3, 2014 There are sharks in the pool... Link to comment Share on other sites More sharing options...
Members vort Posted June 3, 2014 Author Members Share Posted June 3, 2014 There are sharks in the pool... Guess the best way to avoid sharks is to stay out of the water. But if you are in the water, best to know as much about sharks as you can. Link to comment Share on other sites More sharing options...
Members Tomm Williams Posted June 3, 2014 Members Share Posted June 3, 2014 Guess the best way to avoid sharks is to stay out of the water. But if you are in the water, best to know as much about sharks as you can. Or just hire one. Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted June 6, 2014 CMS Author Share Posted June 6, 2014 But, if I had it to do all over again, knowing what I know now... well... I'd have certainly set-up Peachtree and then QuickBooks up differently. I'm starting a contracting business (home improvement type, not IT, sole proprietorship for now) and my girlfriend's mom is a payroll/tax accountant...she recommended QuickBooks. So I got a copy (the "premier contractor" version) and haven't understood anything since. The wording of some fields is unintelligible, and I get conflicting opinions on nearly every aspect of setup. It's definitely not set up to make *my* life easier, and I have very simple needs...I buy stuff and build something with it, and get paid at the end of the job for doing so. Link to comment Share on other sites More sharing options...
Members nchangin Posted June 6, 2014 Members Share Posted June 6, 2014 Craig: I've heard peeps praise quickbooks and heard the other side that it's not so user friendly. I use a spreadsheet. Income tab, Expense tab. Labor tab. Tax man seems to like it when submitting at tax time. He tells me what's deductible and what isn't from that spreadsheet. Save all receipts in case of an audit and to also reconcile expenses for the year on the spreadsheet.... Isn't quick books more for corporate with full time employees, multiple projectss etc? (rarely have employees only raodies if needed) Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted June 8, 2014 CMS Author Share Posted June 8, 2014 Craig: I've heard peeps praise quickbooks and heard the other side that it's not so user friendly. I use a spreadsheet. Income tab, Expense tab. Labor tab. Tax man seems to like it when submitting at tax time. He tells me what's deductible and what isn't from that spreadsheet. Save all receipts in case of an audit and to also reconcile expenses for the year on the spreadsheet.... Isn't quick books more for corporate with full time employees, multiple projectss etc? (rarely have employees only raodies if needed) QuickBooks is intended for any small business. It's got a boatload of features, which you supposedly pick and choose to use or not depending upon how you do business and how you do your accounting. Even though it states that you "don't need to be an accountant" to use it, it's definitely not set up in a way the layman can easily understand. It does however have nice features like the ability to make written estimates, invoices (including for progress payments) and receipts, and has decent reporting features so you can see how well, or not, you're doing. Link to comment Share on other sites More sharing options...
Members agedhorse Posted June 9, 2014 Members Share Posted June 9, 2014 QuickBooks can certainly lead you down a path to where things get complicated quickly. I've been using since it was introduced and I finally decided not to upgrade about 15 years ago because each upgrade ment a whole new learning curve. Unfortunately I have almost hit a dead end, because my version is not supported on operating systems beyond XP though I was able to find a workaround for 7. At some time, I will need to start fresh... or retire Link to comment Share on other sites More sharing options...
Members cappttenron Posted June 9, 2014 Members Share Posted June 9, 2014 I will make a point here. QuickBooks is actually used by many business sizes and I was quite surprised to find that out as I worked in that industry for awhile. Many companies with 200 plus employees use it and one of the nice things about it is third party vendors make custom versions for many types of businesses. I will agree with AH that it is a bit annoying that they keep upgrading and I have heard complaints about that. There is a reason they own the market in affordable accounting market. My advice about systems is get a CPA or professional to set up your chart of accounts so you don't make big mistakes upfront. This is a critical step and worth the money unless your very knowledgeable. Watch that TV show the Profit and you will see many small business owners that don't know their numbers. Also my wife is working on finishing her classes to sit for the CPA examination and guess what. The computer accounting classes use QuickBooks. Link to comment Share on other sites More sharing options...
Members Bill.ESC Posted June 9, 2014 Members Share Posted June 9, 2014 We've been using QB close to 20 years and several years ago had to upgrade to the Enterprise version because the original version could not support as many customers as we have. If it is set up correctly from the beginning, it is a great tool. If you try to learn as you go, you'll never catch up. Link to comment Share on other sites More sharing options...
Members cappttenron Posted June 9, 2014 Members Share Posted June 9, 2014 I would also strongly suggest if you are going to do it yourself at least take a class in it first. Where I use to work companies paid a lot of money for implementation (read setting up) accounting packages. They typically received $250 per hour. I'm sure you can get non certified people to do it for less and maybe just as well. Bill is totally correct most people will never be able to learn this on the fly. If you want to start a real business you have to know your numbers. I was watching the PROFIT one day and the guy was selling mobile trailers that were commercial kitchens. He asked the owner what it sells for and he said 50K I think. Then he asked him what it costs to make it and he had no clue? This was a company that was selling millions of dollars worth of these things every year. Needless to say he didn't invest in the company mainly because it was a husband and wife company and they couldn't get along enough to do anything. Note to self, don't bring your wife into your business and then cheat on her. She will destroy the company just to spite you. Link to comment Share on other sites More sharing options...
Members DanCostello Posted June 10, 2014 Members Share Posted June 10, 2014 I will make a point here. QuickBooks is actually used by many business sizes and I was quite surprised to find that out as I worked in that industry for awhile. Many companies with 200 plus employees use it and one of the nice things about it is third party vendors make custom versions for many types of businesses. I will agree with AH that it is a bit annoying that they keep upgrading and I have heard complaints about that. There is a reason they own the market in affordable accounting market. My advice about systems is get a CPA or professional to set up your chart of accounts so you don't make big mistakes upfront. This is a critical step and worth the money unless your very knowledgeable. Watch that TV show the Profit and you will see many small business owners that don't know their numbers. Also my wife is working on finishing her classes to sit for the CPA examination and guess what. The computer accounting classes use QuickBooks. This. I can't imagine trying to set it up on my own without a fair amount of experience. It's not hard, per se, but it's easy to mess up. Definitely hire someone. -Dan. Link to comment Share on other sites More sharing options...
Members vort Posted June 10, 2014 Author Members Share Posted June 10, 2014 I know from day job experience that QB can be a bear to interface with other programs (Payroll for example) without a 3rd party provider and depending on the info your trying to interface. I agree that I see QB used by many companies, including those who have outgrown it and get frustrated by it. My accounting program for now in the start up stages is that old workhorse Excel and VBA. Link to comment Share on other sites More sharing options...
Members nchangin Posted June 10, 2014 Members Share Posted June 10, 2014 My experience with an LLC and a partner had issues later on when one partner decided to move to the other side of the country. I think that is something you want to discuss with your partner about any future involvement or where do you see yourselves in 5 years. If one partner disagree's it very possible bad things can happen, disagreements, disputes on finances etc leading to lawsuits and so forth, so make sure you have a business plan in writing and I would also suggest an attorney look over the agreement, not that I had issues that required that but if I knew what I did when I started I probably woulnd't have started it they way we did. It can be very easy for disputes to happen, one could say well I did this for this amount of hours and you didn't contribute so I should get this x more than you, etc. Or X wants to buy this as investment but Y doesn't want to and so forth. How will the business file taxes and with who and for what amount, is another hot topic of discussion with a partner. Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted June 12, 2014 CMS Author Share Posted June 12, 2014 The partnership agreement definitely is where issues can arise when one party terminates. Be sure you've got this spelled out as accurately and with as much detail as possible. Situations change. People change. Or maybe they don't change but you finally see them for who they really are. Link to comment Share on other sites More sharing options...
Members agedhorse Posted June 14, 2014 Members Share Posted June 14, 2014 Anybody get screwed by the latest Microsoft automatic updates? Scrambled my accounting data, and current backup also scrambled because it came from corrupted data. Previous backup ok but there's done re-entry to do. Why doesn't QB offer the basic package anymore. All I want is the simplest basic package, I have a business to run and don't need to learn another package! Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted June 15, 2014 CMS Author Share Posted June 15, 2014 Anybody get screwed by the latest Microsoft automatic updates? Scrambled my accounting data, and current backup also scrambled because it came from corrupted data. Previous backup ok but there's done re-entry to do. Why doesn't QB offer the basic package anymore. All I want is the simplest basic package, I have a business to run and don't need to learn another package! Haven't heard about this until now. An update manipulated a data file? Link to comment Share on other sites More sharing options...
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