[quote]blithe wrote:
Not to rain on your parade, but I think you might be missing the forest for the trees. You are concentrated on a lot of business administrative type details that would be more suited to someone in business, not econ.
Just my two cents, but what someone said before about discretionary income and the dogs is the right type of question to be asking. Although, in this case dog walking might be thought of as a luxury good, and as with any luxury good, demand falls as the economy dips and people have less available income.
In this particular case, they have less available income - making them want to save money (walking the dogs), and the value of their spare time is worth less (they were previously losing an hour of paid work for every hour they walked the dog, now with the …dare I say recession?
they are either being paid less or they are not being worked at full time) which means their leisure time is more available than before, nudging them towards walking Fido on their own.
It’s econ, think econ mechanics, not business administration. Your last question in the original post has a few good thoughts. Think in terms of luxury goods and normal goods, costs of time foregone (opp. cost), utility gained from having the service done rather than doing it yourself, and things that you think it would make sense for you to do, given your own competitive advantages relative to other people.
You’re off to a good start, lots of enthusiasm, but for an econ class I would think you might be aiming slightly off the mark.[/quote]
Thanks Blithe that was brought to my attention and I will be researching and answering those questions in my Essay. I have a feeling that will be the hard part.
I figured that rather than continually asking questions, I would read a bit more and make a more thorough plan. Here is what I have:
1)Business will be sole proprietorship:Reason
Low start-up cost, no financing or credit needed
Low liablity
2)Go to county Clerk
Check Name availablity
Apply for DBA
3)Get phone number for busines purposes
4)Buy materials and equipment needed
Lease Van and buy decals
Leashes and toys
Eco friendly wash products
5)Open business account
Deposit business money
Use to pay for expenses
6)Recruit High School students to get customers and pay them $10 for every referral.
7)Go to customers homes to collect many tell them how service will be done and get signatures on contract.
8)Book Keeping and Business Journal
Record monthly progress
Keep track of money recieved
Keep track of business expenses using business account
Cash payments(reciepts will be bank deposit slips)
Journal will keep transactions, names, addresses, phone number, amount paid and contracts.
9)Since business will be done by contracts
Taxes will be paid 4x a year
Taxes will be self-Employment and Estimated Tax.
IRS Forms 1040-ES and 1040-SE
If business were to grow and were in need of employees then EIN will be needed instead of SSN. Also more taxes will be paid and will have to go through hiring process using W-4 forms etc.
Question: Can simple be written up since verbal agreement has already been made?
Sorry for the lengthy post, I would appreciate any input on the order or any overlooked steps.
heres an idea how it ties in im not sure
but you said use EIN instead of SS wit hemployees
well your EIN is actually like a second SS number and you can use that from the start
have everything from the van lease to the cell phone put under the biz name and the ein and not your name.
then use your SS number as a cosign as secondary credit.
built credit on the EIN and not your personal credit for future growth if needed.
and yes they are seperate
No worries. If you go after those questions with the same energy you’re going after your business plan you’ll be fine.
Btw, it might make sense to do a little research and essay outlining before you finish your business plan.
That way you can more easily come up with exceptions to economic mechanics, ie the luxury good (or inferior good) issue can be worked around by saying you are working in a section of town which is more well off, and thus insulated from the economic downturn.
Or you can just work everything out after the fact, citing competitive advantage or something as your ace in the hole. I tend to do it cowboy style myself, so I can’t say I wouldn’t sympathize if you did.
[quote]Nich wrote:
heres an idea how it ties in im not sure
but you said use EIN instead of SS wit hemployees
well your EIN is actually like a second SS number and you can use that from the start
have everything from the van lease to the cell phone put under the biz name and the ein and not your name.
then use your SS number as a cosign as secondary credit.
built credit on the EIN and not your personal credit for future growth if needed.
and yes they are seperate
[/quote]
Thanks for the info, I thought I would not need an EIN because I visited one of the sites linked on the thread and none of the reasons applied to me. Does the rest of the plan look OK?
[quote]blithe wrote:
No worries. If you go after those questions with the same energy you’re going after your business plan you’ll be fine.
Btw, it might make sense to do a little research and essay outlining before you finish your business plan.
That way you can more easily come up with exceptions to economic mechanics, ie the luxury good (or inferior good) issue can be worked around by saying you are working in a section of town which is more well off, and thus insulated from the economic downturn.
Or you can just work everything out after the fact, citing competitive advantage or something as your ace in the hole. I tend to do it cowboy style myself, so I can’t say I wouldn’t sympathize if you did.[/quote]
Haha, I’m an econ guy, and a theoretical one at that. Business plans to me are like bodybuilding to a powerlifter, I sorta know what’s goin on, but not enough to the point that I’d be comfortable giving in depth advice.
That being said, your steps 5 and 6 are backwards. You open the account before you buy capital for your business. The capital should be a fixed expense type deal that you might be able to write off in your taxes.
People who need their dogs walked probably need their dogs walked more than once a week. So, I would not put “weekly” as a constraint on my business. Why not as much dog walking as the customer wants or as you can provide?
Looks like you are in the state of California. Don’t know much about California taxes and business law, other than there is a state income tax and it is generally complicated for a business to administer.
Adding on to what others have said about taxes, make sure your business plan incorporates the administrative overhead of dealing with CA state income tax withholding, reporting, etc.
Also, your business will be wildly successful, correct? In that case, you need a good retirement plan for yourself - to maximize your personal rate of return (economic return) as the sole owner AND to plan for you retirement. A good IRA/401k can substantially increase the return on investment for the owner of a business, even a sole proprietorship.
Dog walking can lead to complimentary goods and services being sold (I think complimentary goods are an econ concept.) Anyway, dog walking may be done when people are on vacation.
So, you could charge a little extra to do things while you are already at their house - bring in the mail, water the plants or whatever. Easy way to get more fees with little extra work.
finally, you would be in peoples houses. Most don’t want strangers in their houses or on their property that they don’t know and trust. So, I think you need to provide something on your website that will let people know you are “safe” to have around. Perhaps customer references that new customers could call or at least testimonials on the website.