own a business, cannot afford payroll, etc.

[rcollins]

What is the name of your state?What is the name of your state? Missouri

ok, i've ran into a road block and need some help. here it goes. i'm currently developing a business plan and getting ready to put together potential client lists and what not. however, this is the problem i have. i am wanting to start my own business, but, i don't have enough startup capital nor investors to have a payroll for myself nor my good friend who wants to work for me. how do i go about paying the both of us? can i just take what money the company makes and pay what bills i can of ours or what? i'm confused. this is obviously not the way i want to do this, but for the time being until we can get on payroll. i want to have a good idea of what to do. please help me.

thanks in advance.

collins

 

[cbg]

I also own my own business and I speak from experience when I tell you that the owner of a business, particularly a start up business with limited capital, doesn't always get paid. As an example, my partner and I pay whatever bills have been incurred and then split the profits. If there is no profit after the bills are paid, then we don't (get paid, I mean).

How you get paid by the business depends, in part, on whether you are incorporated and if so, how (LLC, S Corp, etc.); also whether you are considered an employee as well as the owner. You would do well to consult with an attorney or a tax accountant as you put this together. The tax ramifications are important.

 

[Beth3]

Or if there is a volunteer CORE group in your area (corps of retired executives), they would be able to help you. You need some expert assistance in putting together a business and financial plan. Your local Chamber of Commerce should be able to advise you if there is a local CORE group or similar that can assist you.

 

[BelizeBreeze]

What is the name of your state?What is the name of your state? Missouri

ok, i've ran into a road block and need some help. here it goes. i'm currently developing a business plan and getting ready to put together potential client lists and what not. however, this is the problem i have. i am wanting to start my own business, but, i don't have enough startup capital nor investors to have a payroll for myself nor my good friend who wants to work for me. how do i go about paying the both of us? can i just take what money the company makes and pay what bills i can of ours or what? i'm confused. this is obviously not the way i want to do this, but for the time being until we can get on payroll. i want to have a good idea of what to do. please help me.

thanks in advance.

collins

With thinking like this you do not belong in business. It took me 3 years to earn a salary. So I worked as a consultant for others while my business grew to the point where I could pay myself and my partners.

Step back and take another look at your buiness and yourself. It might be time to put these plans on hold until you've got a better grasp of the real world.

 

[rcollins]

what exactly am i thinking like, belize? to make sure i know what i have to do regarding pay prior to having payroll for my friend and myself before we get ourselves into the situation? that isn't the way to think when getting into business? to make sure to have every end covered? i was just making sure it was legal to take what profit is left over after paying company bills, if any and take it to pay off our personal bills until payroll is in order. also, to make sure that i file the appropriate forms if there are any certain forms to file for such a thing, whether it's with the irs or with the state. i appreciate your response but not necessarily your information since it didn't answer my questions. thank you cbg and beth for your opinions. if anyone else would like to give me there incite it would be much appreciated and if anyone else thinks along the lines of belize, great, but atleast give reasons.

thanks everyone!

collins

p.s. this isn't an attempt to start an arguement, rather just my response.

 

[Beth3]

Collins, you REALLY need to consult with a tax attorney or CPA. We wish you all the best in your new venture but when it comes to the legal and tax requirements, it doesn't sound like you have any idea what you're doing and you really really need expert advice so you don't run into some major problems with the state and federal IRS. You also need to ensure that you have incorporated properly to limit your personal liability, that all the required state and federal filings are done timely, you have business insurance, etc.

You need far more specific, expert, and on-going tax/legal advice than anyone here is in a position to provide.

Good luck.

 

[rcollins]

thanks for a reponse beth. i understand that i may not know all the tax and legal requirements, however, i thought that if i put up a post i might have someone who can answer me. maybe not be able to give all the answers but atleast give me some direction at least. cbg answered me pretty straight forward, whether it was what i wanted to hear or not he did tell me what he went through which may be similar to my situation if it comes to that. i just was curious if it is legal, which i don't see why it wouldn't be and secondly, i was hoping to know what forms to file, state requirements and such. i've been reading about business and starting up a business and anything and everything relevant to it that i can find. i was just hoping that i could find answers from actual people and not just from articles. answers from actual experience or answers from those who just know better. i appreciate your help as always and anyone else who cares to contribute.

thanks in advance.

collins

 

[cbg]

rcollins, whether or not you can split the profits the way my partner and I do depends upon how, or whether, you are incorporated and whether you are or are not considered employees as well as owners. Not all forms of incorporation work the same way. PLEASE talk to a tax attorney and/or an attorney skilled in corporate law before proceeding any further. You can get into a great deal of trouble doing this on your own if you don't know what you're doing.