Make sure you have a population of intense gym rats. Dont want to open a hardcore gym then realize the only way to float is a juice bar and cycle classes.
[quote]OsakaNate wrote:
Another question, if I may:
Given the liability issues, would you ever recommend someone run as a sole proprietorship? It seems that if you have any circumstances that a lawsuit may occur that the liability would be a pretty big risk, so I would think that the type of business would be somewhat limited.
[/quote]
In any case where there is a risk of lawsuit, LLPs are generally considered a superior form of doing business. But LLPs must file with the state (which can be somewhat costly for small businesses without much capital, depending on the state), and must file a seperate tax return which is also more expensive.
That being said, there are certainly circumstances in which sole proprietorships make more sense. There are many small businesses run out of the owner’s home selling products or services which are not hazardous in any way. In cases like these it is better to own a sole proprietorship because it makes tax returns easier, there is no duty to file your business with the state, etc., and there is generally just less red tape as you can do whatever the hell you want.
[quote]LankyMofo wrote:
[quote]OsakaNate wrote:
Another question, if I may:
Given the liability issues, would you ever recommend someone run as a sole proprietorship? It seems that if you have any circumstances that a lawsuit may occur that the liability would be a pretty big risk, so I would think that the type of business would be somewhat limited.
[/quote]
In any case where there is a risk of lawsuit, LLPs are generally considered a superior form of doing business. But LLPs must file with the state (which can be somewhat costly for small businesses without much capital, depending on the state), and must file a seperate tax return which is also more expensive.
That being said, there are certainly circumstances in which sole proprietorships make more sense. There are many small businesses run out of the owner’s home selling products or services which are not hazardous in any way. In cases like these it is better to own a sole proprietorship because it makes tax returns easier, there is no duty to file your business with the state, etc., and there is generally just less red tape as you can do whatever the hell you want.
[/quote]
I see. That makes sense, now that I read it and think about it a bit more. I guess the trick is determining the risk of liability vs. costs and other restrictions and such.
Thanks for answering.
I want to know and understand everything you guys know. Nothing pisses me off more about the degree I chose than conversations like these.
“I’m not looking to get rich on it or anything. Just looking for it to sustain itself plus be able to update and upgrade the equipment as needed. I have a career, just dont have a decent place to train and my home gym is getting a bit crowded.”
Personally while this is a realitic attitude it also sounds self defeating.
If you are putting your money and reputation on the line, why not seek out maximum return and efficency. Otherwise just invite guys over to your home gym and have them pay for your beer.
[quote]MementoMori wrote:
I want to know and understand everything you guys know. Nothing pisses me off more about the degree I chose than conversations like these.
“I’m not looking to get rich on it or anything. Just looking for it to sustain itself plus be able to update and upgrade the equipment as needed. I have a career, just dont have a decent place to train and my home gym is getting a bit crowded.”
Personally while this is a realitic attitude it also sounds self defeating.
If you are putting your money and reputation on the line, why not seek out maximum return and efficency. Otherwise just invite guys over to your home gym and have them pay for your beer.
[/quote]
Ehhh, while you are right to a degree, making it big means working 24/7 and dieing at your desk. He would have to be married to the gym and then teh subsequent business if he was to make real money doing it.
But if he wants a nice small, self sustaining operation, he can get it going rather quickly (in business terms) and not have to live that career after a relatively short period.
I know a guy started a photography business with his buddies as an excuse to fly planes over the ocean every weekend. They never sold shit, but had a hell of a lot of fun doing it.
[quote]countingbeans wrote:
[quote]MementoMori wrote:
I want to know and understand everything you guys know. Nothing pisses me off more about the degree I chose than conversations like these.
“I’m not looking to get rich on it or anything. Just looking for it to sustain itself plus be able to update and upgrade the equipment as needed. I have a career, just dont have a decent place to train and my home gym is getting a bit crowded.”
Personally while this is a realitic attitude it also sounds self defeating.
If you are putting your money and reputation on the line, why not seek out maximum return and efficency. Otherwise just invite guys over to your home gym and have them pay for your beer.
[/quote]
Ehhh, while you are right to a degree, making it big means working 24/7 and dieing at your desk. He would have to be married to the gym and then teh subsequent business if he was to make real money doing it.
But if he wants a nice small, self sustaining operation, he can get it going rather quickly (in business terms) and not have to live that career after a relatively short period.
I know a guy started a photography business with his buddies as an excuse to fly planes over the ocean every weekend. They never sold shit, but had a hell of a lot of fun doing it. [/quote]
Fair point. I guess it is just personal philosophy. Anything involving a fait some of money I like to consider as an investment first and a passtime second. I can understand that this is not everyone’s goal.
The key is to take the necessary steps to grow when you can. The first step is to have a self sustaining business. Believe it or not, this is probably the HARDEST step. After that, when the opportunity to grow the business presents itself, you’d have to be a fool not to take it.
I have learned an absurd amount about the American institution in this thread.
I had been planning on creating a one-man LLC for awhile, I’m now rethinking that position.
Whoever said “gyms are overall money losers” is a moron. It may not be the case for the particular type of gym this guy is talking about, but as far as a typical gym goes, they are massive money makers.
What do you need for a gym? A building, and equipment. Equipment is a one time expense for the most part, so once you get that paid off, all you have is overhead (rent, power, water, toilet paper). Anything you make over that is gain.
I go to 24 hour fitness, and that place is a fucking cash cow. The only thing that place pays for is the aforementioned overhead. None of their equipment is properly maintained, things break all the time, and then sit there for 2 months, just being broken. Pulleys get caught and drag (a problem remedied by something as simple as a can of WD40), and cables aren’t the correct length for the stations.
The rubber pieces on most machines (to make it quieter when the weight is dropped onto a rack) is completely gone. They rarely run the AC, and for about a month, there were no muscle clamps in the entire gym (because somebody stole them, so they were gonna “teach us a lesson” by creating a massive liability).
Then at the end of the fiscal year, with the rest of their budget (so it doesn’t get cut next year) they’ll buy a couple dozen new flat screen TV’s for the fatasses on the treadmills. The moral of the story is, they have very few expenses, simply because they are cheap bastards, but they are still raking in $30/person with at least a couple thousand members. Income > Cost = Profit. That’s as simple as it gets.
As for your gym, I salute you for trying. I don’t know shit about LCC’s and LLC’s and S-corps or whatever the fuck you guys were talking about, and I don’t pretend to, but I wish you the best. Running a business takes a lot of work, and a lot of money, but if it means one more hardcore bodybuilding gym in the world, you have my full support.
[quote]CapnYousef wrote:
I have learned an absurd amount about the American institution in this thread.
I had been planning on creating a one-man LLC for awhile, I’m now rethinking that position.[/quote]
Dude, this isn’t even the tip of the iceberg, haha. I feel like the knowledge I have covers just the tip of the iceberg and I’m much more knowledgeable than the average person.
What type of business are you interested in getting into?
[quote]Hyena wrote:
Whoever said “gyms are overall money losers” is a moron. It may not be the case for the particular type of gym this guy is talking about, but as far as a typical gym goes, they are massive money makers.
What do you need for a gym? A building, and equipment. Equipment is a one time expense for the most part, so once you get that paid off, all you have is overhead (rent, power, water, toilet paper). Anything you make over that is gain.
I go to 24 hour fitness, and that place is a fucking cash cow. The only thing that place pays for is the aforementioned overhead. None of their equipment is properly maintained, things break all the time, and then sit there for 2 months, just being broken. Pulleys get caught and drag (a problem remedied by something as simple as a can of WD40), and cables aren’t the correct length for the stations.
The rubber pieces on most machines (to make it quieter when the weight is dropped onto a rack) is completely gone. They rarely run the AC, and for about a month, there were no muscle clamps in the entire gym (because somebody stole them, so they were gonna “teach us a lesson” by creating a massive liability).
Then at the end of the fiscal year, with the rest of their budget (so it doesn’t get cut next year) they’ll buy a couple dozen new flat screen TV’s for the fatasses on the treadmills. The moral of the story is, they have very few expenses, simply because they are cheap bastards, but they are still raking in $30/person with at least a couple thousand members. Income > Cost = Profit. That’s as simple as it gets.
As for your gym, I salute you for trying. I don’t know shit about LCC’s and LLC’s and S-corps or whatever the fuck you guys were talking about, and I don’t pretend to, but I wish you the best. Running a business takes a lot of work, and a lot of money, but if it means one more hardcore bodybuilding gym in the world, you have my full support.[/quote]
Sounds like a shitty run business. Do they not have any competition in the area? Normally shitty run businesses are put out of business. I go to a retro fitness for only $20/month and they maintain everything rather well.
[quote]LankyMofo wrote:
[quote]CapnYousef wrote:
I have learned an absurd amount about the American institution in this thread.
I had been planning on creating a one-man LLC for awhile, I’m now rethinking that position.[/quote]
Dude, this isn’t even the tip of the iceberg, haha. I feel like the knowledge I have covers just the tip of the iceberg and I’m much more knowledgeable than the average person.
What type of business are you interested in getting into?[/quote]
I don’t wanna de-rail the thread but I’ve been doing legitimate computer repair for four or five years now, and I might as well be on retainer with a few decent companies. Literally a side-business that has more than funded all my BBing needs to date, including the gym I just finished building. I understand an LLC would protect me from liability, which was what I was looking for - especially since NJ law says I only pay tax on profits. I’d be the sole employee, and it seemed simple enough.
[quote]CapnYousef wrote:
[quote]LankyMofo wrote:
[quote]CapnYousef wrote:
I have learned an absurd amount about the American institution in this thread.
I had been planning on creating a one-man LLC for awhile, I’m now rethinking that position.[/quote]
Dude, this isn’t even the tip of the iceberg, haha. I feel like the knowledge I have covers just the tip of the iceberg and I’m much more knowledgeable than the average person.
What type of business are you interested in getting into?[/quote]
I don’t wanna de-rail the thread but I’ve been doing legitimate computer repair for four or five years now, and I might as well be on retainer with a few decent companies. Literally a side-business that has more than funded all my BBing needs to date, including the gym I just finished building. I understand an LLC would protect me from liability, which was what I was looking for - especially since NJ law says I only pay tax on profits. I’d be the sole employee, and it seemed simple enough.[/quote]
I’m not familiar with a NJ individual return, but… You could get away with a schedule C IMO.
I don’t see what your doing as very dangerous in terms of lawsuits, lol. And if your pulling in less than 5-10,000, and LLC or any formal business formation is well beyond your needs right now.
Do they issue you a 1099? (They will soon assuming Obamacare doesn’t get repealed).
I also assume you are maximizing your deductions, correct?
Members are not supposed to be employees of an LLC, you are supposed to take guaranteed payments. (This is all shit you don’t really need to know, but…) So, if you wanted run your payroll through the company you would need a different form of ownership.
The liability I run into is if large equipment is damaged while I’m working with it, but I’m not sure how it all works. Say I come into a business and they have a nice amount of server racks - and one of them gets screwed up while I’m working it. I suddenly feel liable, I just don’t know if I am. I have been asked to do 1099s in the past, but I was always like 16/17 so I just dodged the job. All my jobs thus-far have been under the table, but I have had times where I could have pulled in a decent enough amount of cash to (according to people around me who I’ll admit know nothing next to a real accountant) justify setting up an LLC.
I trust you and Lanky far more than the people around me, and I appreciate all your input on this
You can always get liability insurance, but I just don’t see someone suing you. You are a kid (I don’t mean this offensively) that has no assets. (Again, not a put down, just reality.) Do you know anyone in insurance? Don’t just cold call someone, they will put it up your ass so far you’ll cough their dick dust for a week. Insurance agents are notoriously slimy and like to play more than they work. (Sweet gig though. Pretty much make an 8-10% commission for being a middle man, which means you just need to know people.)
I don’t see anyone paying a lawyer 300-500 and hour to take you to court to get nothing. They would just fire you and not pay you for that day.
MAYBE take you to small claims for damages, but then again…
You could form an LLC, it is beyond simple, so is an S-Corp to be honest, and the cost (at least in MA) is roughly the same. But your damages aren’t going to be big enough where you will won’t be able to cover them. I mean what is a single server? $3,000-8,000? whether you are an LLC a Corp or a sole Prop, you would just negotiate a payment plan and stay out of court.
Who would you go to in order to have your taxes done?
Are you close too or work in NYC at all?
I have two or three corporate lawyers as first cousins and a couple of accountants + an MBA in the household, I never really thought about it the way you put it beans and I do agree I am too tiny and adorable of a target to get legit sued. I guess it was more of a “Hey, now you get to pretend like you’re important because you’re “official”” type thing.
I never work in the city as of yet, it really is just local businesses that like they way I handle myself. The majority have no idea how old I am, at worst one knows I’m in college. I bumped into all of them through friends and acquaintances I’ve helped, its really a gigantic grapevine of “I know this guy who can get ALL the porn off your computer for under a hundred bucks…”
[quote]CapnYousef wrote:
I guess it was more of a “Hey, now you get to pretend like you’re important because you’re “official”” type thing.
[/quote]
LOL, don’t rush to tell the government you are a big deal.
Just make bank, and build a good rep through word of mouth for now.
[quote]countingbeans wrote:
[quote]CapnYousef wrote:
I guess it was more of a “Hey, now you get to pretend like you’re important because you’re “official”” type thing.
[/quote]
LOL, don’t rush to tell the government you are a big deal.
Just make bank, and build a good rep through word of mouth for now.
[/quote]
Finally, a non-moron. While I’m not exactly going to tell my friends/family “shut up, this accountant who benches your car on the internet agrees with me,” its nice to know someone doesn’t think I should turn my hobby into a chore (paperwork sucks)
This thread has helped me a ton. I do some private personal training out of my buddies welding and fabrication warehouse and had my sights set on opening my own gym in exactly one year. Now I’m thinking I need to wait 3-5. Thanks again.
I just wrote up a whole post outlining my thoughts and deleted it by mistake. Essentially it was just a long winded way of agreeing with beans.
WF - just out of curiousity, what do you think the hold up is considering what you learned from this thread?