1. Never operate as a sole proprietorship. Even if your accountants tells you to “keep it simple” or you are too small to incorporate or you don’t make enough money, don’t listen! You are only receiving one niche of advice from a tax perspective and even it is may be correct from a tax point of view only (because you do not make enough profits to save on SE taxes) you are missing out on the marketing, legal and financial input also. For example, from a marketing point of view you are coming from a point of weakness if you are attempt to position yourself as the owner operator of a sole proprietorship vs the President of your own corporation. Plus you severely limit your ability to gain access to business credit when you do not separate your personal and business credit.
2. Never use the online business checking account balance as the only financial tool to give you feedback on how to run your business. Most people run a small business the same way their run their personal lives, by using their online PERSONAL checking account balance to make personal financial decisions. There is no comprehensive personal budget. Your business should have a tax and bookkeeping system with update software to tell you exactly where your profit and loss is at (even if you have not made a sale). Ask yourself, are you running a real business or just a hobby?
3. Separate your personal and business credit. This is an absolute must in today’s tight credit markets. This involves learning how to manage your business vendor and cash lines of credit, your personal credit score and working with D&B® and Corporate Experian® to develop a business credit profile quickly. Otherwise, your business may stand “financially naked” in front of the world with our you knowing it. How much business will that cost you? Can you afford not to master this subject?
4. Master the leverage of joint ventures to grow your business. You must learn the highest form of leverage to bring in clients at the lowest cost to keep you in business the first 3-6 months in business. Bring in new customers or clients are very expensive unless you know how to leverage properly other people’s money and get them to properly endorse you to their list. Most small business owners run out and place ads to attract new customers and wonder why they run out of money within 90 days. Study this subject. Learn the tools you must have to leverage other people’s money to grow!
   
5. Find a company that can provide a turnkey solution to help you start you business so you can focus on making a profit. After all, making a profit is the #1 reason to start a business. If you spend 14 hours per day attempting to do everything on your own to save a few dollars, you may quickly find yourself out of business because you had no time to acquire new clients or customers to grow your business.

About the Author:

Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 13 years NCP has assisted more than 5,500 business owners form LLCs and corporations to get their business off to a fast start to profits™! Questions? Call NCP at 1-888-627-7007. www.nvinc.com

Forming a C corporation to take advantage of fringe benefits when your business doesn’t fit the C corporation model. (Can you spell nightmare?)

Asset Protection and Business I.Q.

Question # 6: Which are reasons NOT to form a C corporation?

A) C corporations have lower tax brackets than individuals
B) Double taxation
C) Too much profit to reinvest
D) When a flow through entity may make more sense
E) Focusing on business expenses may be more important than fringe benefits
F) All the above
G) A and B
H) B, C, D and E

Costly Mistake Number 7:

Forming an entity in Nevada and NOT knowing when to foreign register, and for what reasons. (“Can’t you just get a mailbox?”)

Asset Protection and Business I.Q. Question # 7: Which are common reason(s) that would cause an entity to need to foreign register (or qualify) to do business in another state?
A) An employee in another state
B) An office located in another state
C) Equipment located in another state
D) An independent contract in another state
E) All of the above
F) A, B, and C

Costly Mistake Number 8:

Forming an entity and hiring independent contactors and employees WITHOUT knowing the rules. (It makes a difference as to which states you’ll need to foreign register.)

Asset Protection and Business I.Q. Question # 8: Which statement is false concerning employees?

A) They create less liability than independent contractors for your business
B) Employees create nexus for your company in the state they are doing the work
C) Your company will pay half of the 15.3% payroll taxes on each employee
D) The IRS is mostly attempting to convert employees to independent contractors

Costly Mistake Number 9:
Forming an LLC taxed as a partnership WITHOUT having an”official” partner. (Maybe the IRS won’t notice.)

Asset Protection and Business I.Q. Question # 9: What entity or person (assuming you are one of the partners) will qualify as a partner for an LLC taxed as a partnership?

A) A single member LLC owned by you
B) An S corporation owned by you
C) A C corporation owned by you
D) A foreigner
E) All of the above
F) B, C and D

Costly Mistake Number 10:

Selecting an inexperienced or disreputable company to help you form your entity. (There’s no excuse for not checking references with the BBB, local professional organizations and testimonials.)

Asset Protection and Business I.Q.
Question # 10: Which characteristics should be considered when choosing an entity formation company?

A) A company that has been in business for at least five years
B) A company that has a national known attorney
C) A company that has research and invests in internal training
D) A company that provides other business development services
E) A company that is recommended by top local organizations
F) All of the above

www.nvinc.com For more information call 1- 877- 515 – 0505 (local 702-367-7373) today!

Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 13 years NCP has assisted more than 5,000 business owners form LLCs and corporations to get their business off to a fast start to profits™! Questions? Call NCP at 1-888-627-7007. www.nvinc.com

Costly Mistake Number 3:

Forming an LLC and having it managed by members instead of managers* (A sure way to lose flexibility and control)

Asset Protection and Business I.Q.

Question # 3: What is/are the benefit(s) of having your LLC managed by managers?

A) Many times you do not need to disclose the owners (members) in annual state reports
B) Managers have more authority than members
C) Members added in the future will not necessarily have a say in management
D) It looks more like a limited partnership
E) An operating agreement is not required
F) There are more tax advantages
G) All the above
H) A and B
I) A, C and D
J) C and E

* “Managers of an LLC” is defined as the person or entity that manages the day to day operations of the LLC.

Costly Mistake Number 4:
Forming an S corporation and NOT knowing the shareholder rules (Imagine discovering years later that you’ve violated an S corporation shareholder rule — and that you now owe years of expensive C corporation back taxes.) Asset Protection and Business I.Q.
Question # 4: Who can be a shareholder of an S corporation?

A) A U.S. citizen

B) Another S corporation
C) C corporations
D) All LLCs
E) A living trust
F) All of the above
G) A, B and D
H) A, B and E

Costly Mistake Number 5:
Forming an S corporation when your company anticipates future value (There must be a better approach, and indeed, there is!)

Asset Protection and Business I.Q.

Question # 5: When is an S corporation NOT your best choice?

A) When you are considering investors for your business
B) When you are considering foreign partners
C) When the company will develop a great asset value
D) When you are going public
E) When you live in California
F) All of the above
G) A, B and C
H) A, B, C and D

www.nvinc.com For more information call 1- 877- 515 – 0505 (local 702-367-7373) today!

Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 13 years NCP has assisted more than 5,000 business owners form LLCs and corporations to get their business off to a fast start to profits™! Questions? Call NCP at 1-888-627-7007. www.nvinc.com

Costly Mistake Number 1:

Forming an LLC and NOT knowing how it’s taxed (Are you a single or multi-member LLC? Will you be disregarded for tax purposes, taxed as a partnership, a C-, or an S-corporation?)
Asset Protection and Business I.Q.

Question # 1: If you have two members in an LLC*, how will the LLC be taxed?

A) A limited partnership
B) An S corporation if you file Form 8832 and 2553
C) A disregarded entity
D) Federally only
E) All of the above
F) A and B
G) A, B and D * “Members in an LLC” is defined as the owner of the LLC. Costly Mistake Number 2: Forming an LLC for real estate and NOT knowing how it should be taxed when you have dealer and/or investor property? (Make the wrong choice, and be doomed to a life of unnecessary taxes.) Asset Protection and Business I.Q.

Question # 2: What is a “real estate dealer”?

A) Someone who goes to real estate auctions
B) Someone who holds onto real estate for more than 12 months
C) Someone that will be subject to SE taxes on the sale of the property
D) Someone that will be subject to short term capital gains
E) Someone that flips properties in less than 12 months
F) B, D and E

www.nvinc.com For more information call 1- 877- 515 – 0505 (local 702-367-7373) today!

Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 13 years NCP

has assisted more than 5,000 business owners form LLCs and corporations to get their business off to a fast start to profits™! Questions? Call NCP at 1-888-627-7007. www.nvinc.com

Fast Business Start up

“The Top 20 Mistakes Before And After” is designed not as a static report, but as an interactive tool for you to use to understand your options, analyze your strategic business design and spot areas of vulnerability, building as you go to create a comprehensive “map” to use in your corporate formation planning. So close your office door for a short time, pour yourself your favorite beverage, and settle back with pencil in hand. You’re about to spend perhaps the most valuable 20 minutes of your business career.

There are three steps in using this material:

Step 1: Read each Costly Mistake (divided into 10 “Befores” and 10 “Afters”) and answer the question that applies to each issue.

Step 2: Tally up your results, then assess your Asset Protection and Business I.Q. Knowledge. Take a moment to fully absorb the insight you’ve gained, and the advantages of having an experienced, “birds-eye view” of your business strategies.

Step 3: Build your strategic plan, and enjoy the confidence of knowing you’re protecting your business and assets.

www.nvinc.com For more information call 1- 877- 515 – 0505 (local 702-367-7373) today!

Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 13 years NCP has assisted more than 5,000 business owners form LLCs and corporations to get their business off to a fast start to profits™! Questions? Call NCP at 1-888-627-7007. www.nvinc.com