Trying to start a new business need insight

Fuzzy_Logic
Fuzzy_Logic

good morning bizraelis

I am a 21 year old student with a side business that is growing and I need insight on how to proceed. Essentially the business is headlight restoration -- if you live in a sunny climate you've probably seen the yellowing and hazing of automobile headlights. I resurface these lights (remove discoloration and restore clarity).

At this point in time business has mainly been friends and referrals. I have started approaching small local dealerships (below 30 car lots) and offering the service. Reception has been phenomenal, but I need guidance. Some relevant facts: I am in Florida, the service is mobile (I come to the client), the work is mostly labor. There is a chemical cost per car but is negligible (eg $100 chemical cost covers 500 headlights). I am a one man operation, I have been saving receipts for the materials purchased but I am not sure how to actually structure this into a legitimate operation. At this point in time I am mainly paid cash but the dealer's are giving me checks (which I have them make out to me) and I imagine larger dealers will want to be invoiced and paid at a later date.

How should I structure this business? LLC, S-corp, sole prop? I am not familiar and google is not giving clarity
How should I be paying myself -- as a 1099 or W2
How do I handle expenses - I was told to start logging miles I am driving in my personal vehicle
How should I be doing sales tax -- labor isnt charged? do I collect the local rate where I do the work or only the city where I establish the business?

If it isnt obvious I dont know the intricacies of running a business. I am signed up for accounting and biz management classes but not until Fall and I would really enjoy any advice or input to put me in the right direction.

pic tragic but unrelated

All urls found in this thread:
http://www.instructables.com/id/The-30-sec-Headlight-Restoration/
Evil_kitten
Evil_kitten

@Fuzzy_Logic
Look up how to structure cash flows, balance sheets and earnings reports on investopedia and youtube. If you don't have any associates or anything I'd recommend staying as a freelancer in the meantime.

Also learn how to calculate your fixed and variable costs so you can plan accordingly and don't end up losing money on your operation.

Inmate
Inmate

@Evil_kitten
noted will do

thanks

StonedTime
StonedTime

@Inmate
How should I be doing sales tax -- labor isnt charged? do I collect the local rate where I do the work or only the city where I establish the business?

Regarding this question while you're freelancing you can overlook sales tax if the customer doesn't ask for an invoice and can even leave it out from your earnings to save yourself some income tax, while the legality of this might be dubious many starting entrepreneurs do it while their businesses take off. There might even be some subsidizes in your state for starting businessmen regarding taxes.

How do I handle expenses - I was told to start logging miles I am driving in my personal vehicle

Fixed and variables costs, in your case gas would be a variable cost because you don't use gas if you're not out with a customer. Rent, electricity, etc are fixed costs. Look up how to construct a model on how many jobs you'd need to do in a month to reach your equilibrium and go from there. This also helps you adjust the price on your services, you might be undercharging or even overcharging your clients.

How should I be paying myself -- as a 1099 or W2

If you stay as a freelancer your earnings would be counted as your income and taxed accordingly by the bracket your income falls in, it could potentially be lower than the corporate tax on earnings.

happy_sad
happy_sad

@StonedTime
Ok determining my fixed and variable costs helps me determine the rest.

I'll have to do some research and see what incentives Florida has for small business.

I do not get many receipt requests now but is a concern as I approach bigger dealers.

Is there a way to estimate tax liability as a free Lancer? If the biz does 4000 a month gross, my labor and materials cost 1200- should I retain 20 or 30% of the left over for tax or is this way premature

Posting from mobile may be different id

Nojokur
Nojokur

Bump

Supergrass
Supergrass

@Nojokur
Is before

And this post is after

King_Martha
King_Martha

one way to do it is start sole prop until you're making enough money that starting a corp will cause a lesser tax payable

@Nojokur
@Supergrass
looks good how much do you charge per car?

BlogWobbles
BlogWobbles

@Fuzzy_Logic
Kudos Op this is the first actual business thread I've ever seen on Veeky Forums aside from food truck retardation.

Visit a book store and read starting a business for dummys or Google it.

Ask your bank about opening a separate business account to easily keep expenses separate. You'll prob just want an LLC you don't need to spend a lot incorporating <$200 max. If a lawyer wants more, drop him. You can read about s corp c corp all that shit but keep it simple to start. Don't remain a sole proprietorship- it's a dangerous liability. Some faggot, especially in Florida no offense could crash and sue saying it was your fault somehow. An LLC protects your personal finances.

If you ever use H&R block for taxes, they can help too to set up a tax id but it's more important when you're growing and paying employees.

Think about how to protect your cleaning method. Patents are expensive as fuck and can be money pits if you aren't making profits off of the method so you can wait. Read about it and talk to a trustworthy lawyer. If the lawyer doesn't fuck you on incorporating fees, that can be the test for trustworthiness unless you know somebody.

Good luck Op!

Spamalot
Spamalot

@Supergrass
Fuck, i need that done to my car.

Stupidasole
Stupidasole

Getting a ein is free. Shit tier places are going to charge you hundreds of dollars to set up. I run a tax office I know what they charge. You shouldn't write off the cost of your gas you should write off the actual mileage you get 55.5 cents per mile anything and everything you do can be business-related you just have to know how to document it I wrote off $ 10,000 last year in gas alone I was driving around the country for my job though you're going to use a Schedule C on your personal taxes to report your business anyone that tells you to incorporate is just trying to make money off you

GoogleCat
GoogleCat

@King_Martha
At this point im charging $30 a car. Some cars have an array instead of a pair of head lights and I raise accordingly.

Haha thanks it really is like night and day. I get really excellent reactions from people and always take a before and after. I figure it'll be good for future marketing

@BlogWobbles
Appreciate the heads up on sole prop liability. I will make the LLC and a checking account. I'm not sure if it's protectable -- I have to go to several stores do some chemistry magic to get what I need for the process to work. there's no proprietary chemical, just a way of blending and application. My competitors all approach this with a buffer and buff the light. This is very time consuming and does not prevent further degradation. I spray Chem 1, wipe off, then apply chem 2 (this seals against further degradation) and dries to touch in 90 seconds. I'm done in 5-7 minutes.

Thanks for your post and input

@Spamalot
You in FL? I got a Veeky Forums discount

@Stupidasole
This is interesting. Better to log my distance in miles rather than gas. you are correct it looks like I can get an ein from Florida dor website.

Can you elaborate on the disadvantage of incorporating? I was quoted $85 to get set up.

Posting from different wifi id will change

New_Cliche
New_Cliche

@GoogleCat
Before

And after

Fried_Sushi
Fried_Sushi

@New_Cliche
@Supergrass

Looks good bro! I took a chance at Detailing cars and got around 6 @ $120 each car until I left to go back to advertising.

Your job seems like zero work and decent pay, $60 an hour so I hope that takes you far so you could get into other things.

Q:
Do you clean the inside too? If so, how's that process for you?

Is it easy to find customers?

If I were you, and I almost was. I'd go with business cards underneath the windshield wipers of middle class cars with fucked up headlights. Give them a sweet "discount" at $30 and say you're knocking $10 off because "INSERT ANY REASON HERE".

VisualMaster
VisualMaster

@Fried_Sushi

Why did you quit the car detailing, and what kind of advertising do you do exactly?
Please be as precise as possible.
Thanks

whereismyname
whereismyname

@Spamalot
@Fuzzy_Logic

Seriously? You charge people 30$ to wipe their headlights with toothpaste. Ive done the same thing to my car. All it takes is some damn crest and a sponge.

Dreamworx
Dreamworx

@whereismyname
kek.
have you got out recently? people buy way retardier services

girlDog
girlDog

simple headlight repair
something you can literally do alone without any specialized equipment
minimal labor
a service literally everyone needs and people don't know how/don't care to do

Shit OP. That's a fantastic idea and I'm actually jealous I haven't thought of it.

I wonder if I can open a business involving keyboard dust removal or something.

lostmypassword
lostmypassword

Props to you OP. I wish you luck with your business venture. Just remember most billionaires started small doing something similar. Often simple is better.

Dreamworx
Dreamworx

@Fried_Sushi
I do not clean the interior of the car. Customer base has been referrals and some smaller dealerships. I like your idea on the business card with ad.

@whereismyname
Nice trips but it's a little more than that. There's a variety of home remedy tier stuff (from bug spray to toothpaste) but none of it lasts for more than a month or two. The procedure I have prevents it from yellowing again for years.

@girlDog
Nice dubs. Thanks

@lostmypassword
Yea ideally I'd like to set up accounts and expand to where I have some other gents that show up to do the labor rather than myself. I have some work to do before that phase. I'll do my best to keep it simple

Booteefool
Booteefool

@Dreamworx
Got dubs. Not sure why phones flipping pics

Garbage Can Lid
Garbage Can Lid

@Dreamworx
this is great OP, I think you really have something that could become bigger if you keep establishing relationships with dealers.

care to drop a chemical hint or two? would be interested in doing this to my own car.

Emberfire
Emberfire

http://www.instructables.com/id/The-30-sec-Headlight-Restoration/
are you using this method or something similar? I work at a small lot and this would be helpful for my business.

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