Question about business
How do I start a successful retail business?I need assistance to get my questions answered regarding starting a retail business:
1. Which retail business would be best to start and why: a) Specialty retail business or b) Mail order business?
2. Which type of business is more predictable and does not change often: Specialty retail or mail order?
3. Many people say that PASSION is important when it comes to starting a business because the owner will have to work long hour to make his or her business a success. I agree with that but can you explain to me why there are many people out there who started their successful businesses outside their PASSION?
4. How can I choose products and services to sell that fit my personality and are part of my values?
5. I took a Myers-Briggs personality test and the result of the test shows that my personality type is an ISFJ (Introverted, Sensing, Feeling, Judging). Would someone like me who possess this personality type can become successful in operating his or her retail business?
span lang=”EN-US”>For a newly established business without corporate credit, the basis for approval for a business credit card would be the business owner’s personal credit history. If you carefully examine your contract, it contains a clause that discusses your personal liability as the owner of the business credit card account. What does the personal liability provision mean and how should this affect you?
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Personal Guarantee on Business Credit Card
When you sign your business credit card agreement, you also agree that you would personally guarantee the account. This means that in case the business fails and repayment becomes difficult, you- the business owner is personally liable to pay off all charges in your business credit card.
Under the personal liability clause, the cardholder’s personal credit history can be damaged if there would be unpaid charges on the business account. If your company incurs a large amount debt, your own credit rating can drop even if you don’t have any problem with your personal accounts. As the owner of the business and the owner of the business credit card, you are directly responsible for this account.
With this in mind, entrepreneurs should be cautious with the use of their small business credit cards. Bear in mind that in the event that your employees abuse the account- using their supplementary cards, you will still be accountable to pay off all bills charged to your name. This is why supplementary cards must only be given to your most trusted employees. To avoid the possibility of abuse, closely monitoring your employee’s spending habits is a must.
Can You Get Off from Personal Liability?
Is it possible to be free from the personal liability clause? The answer is yes, it is possible. If you have been using your business credit card for at least two years or more and your record shows that you’ve been a consistent payer, you can request from your business credit card company to remove the personal liability provision. Still, the decision would depend on your business credit card issuer.
It is recommended for business owners to register with a business credit bureau immediately. As soon as you’ve opened the business, you can establish a separate credit history for your company by signing up with major credit reporting agencies like Dun & Bradstreet and Experian (Business). Once this is done, you can apply for a business credit card to start building up your business credit more easily.
Be sure to select a business credit card that will report your payments to the business credit reporting agencies, not to the personal credit reporting agencies. Building up your corporate credit may take some time so establishing as early as possible would work to your advantage. As we’ve said, after 2 years, you can request your business credit card company to dismiss the personal liability clause and completely separate your business credit from your personal credit history.
However, be reminded that separating your business and personal credit history does not mean you should relax on managing your business credit card. It is still important that you watch out your credit card use, that you stay within your credit limit and that you submit your payments on time. By doing this, you can be sure that you‘ll maintain an excellent business credit standing.
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BusinessManExpress
on January 18 2010
well, I don't promise anything but
here's two links that often get me best answers:
http://credit-cards.ebookorama.com
and here http://finance.ebookorama.com
you may also pass them around and help anyone get rid of their debts, people always seem to find help via these links so spread the karma and get points.
good luck!
nacao
on January 18 2010
yea im the same
guzen
on January 18 2010
It is. really. this song describes my life so much
kristopher
on January 18 2010
Any money that is borrowed and that needs to be repaid is a liability. If the funds were borrowed personally and the company doesn't need to repay the money then it could be capital investment made by you.
urbantool
on January 18 2010
made a personal ring tone from 0:34 to 1:05 on zutone(.]com
Angie
on January 19 2010
Hi Angie,
This is a common question for most new businesses. First lets find out where you and your company are at.
1. Do you and your husband own the rental property now.
If so, fine. What you need to do is to sell the property to your company. A very common transaction. Contact a real estate lawyer to do this for you.
The reason you want the Company to own the real estate is two fold. 1. You want the company ( I always recomend a S Corp. ) to own the real estate so that it provides you with the veil of corporate protection. Plus you wll have bought business insurance. Most polices will cover almost all contingencies. Look in @ yellowpages.com for listings for brokers and companies. ( I always recomend Erie )
2. With the company owning the real estate, paying the mortages, this builds credit for the company.
Also having a S. corp is very easy for you to have money flow to you. It is reported on your Fed returns on a Schedule K. You are allowed to draw salary, pay benifits such as health & life and auto insurance. It will allow you to expense many many things through the business to reduce your tax exposure.
If you are starting out in the rental business, things will be a little different.
Your company will have "NO CREDIT HISTORY" Lenders will only lend money for property based on "the ability to pay"
In the rental business, the lender will look at the cash flow of the rental property.
EG: You want to buy a city property with 4 upscale apartments for $500,000. The rent on these apartments generate $4,000 a month. That is $48,000 a year. With 10% down on the property (50,000) you have a mortage of 450,000 plus a interest rate of aprox 6.5% for 20years.
The cash flow of 48,000 is more then enough to support the loan. (1,875 plus interst which brings to 2,000) You only need to have 2 apartments rented to meet the loan.
The lender will look at the calculation, the location of the property, and will look at the property itself.
If you have the down payment and a reasonable credit history, you should be able to do this with little risk to your own home.
The "property" is what is at risk.
I started out as a business & real estate broker 25 years ago. I have bought and sold ten's of millions of $ of property. I started out just like this.
You can move forward by remodleing the apartments, thus increasing the value of the property, raise the rent or just sell the property hopefuly for a profit and move forward. Once your company has a hisory of cash flow, and paying of debt, obtaing credit will not be a problem.
Good luck, let me know if you have any more questions.
smallbus08
on January 19 2010
Yes, of course.
If a company runs out on it's debt it's called fraud.
corpo
on January 19 2010
second chances they dont ever matter ppl never change once a whore ur nothing more im sorry that will never change……………….it so true
v0ice0freez0n
on January 19 2010
A Limited Liability Company is not the same thing as a sole proprietorship. It may have only one owner, but the structure is far different for purposes of liability.
You need to examine the credit card agreement that was signed by your friend. Did she submit herself to personal liability under the terms of the agreement, or is it the LLC that is solely liable for the payment of credit card debt incurred thereunder? She needs to determine that. If she can't, she needs her attorney to make that determination.
Secondly, if an employee of the LLC misused the credit card, then the employee will be liable to the employer either criminally (highly unlikely I would guess,) or civilly for the debt. When you say that the party was a sub-contractor, it makes me think that this person was not an employee in the traditional sense of the term. Your friend's LLC should have a greater range of criminal or civil remedies if a non-employee/sub-contractor misused the company's credit card for his/its personal benefit.
I would suggest your friend consult her attorney about all aspects of this matter with the credit card agreement and e-mails in hand. You should obtain legal advise about whether and how to respond to those e-mails and a legal opinion as to whether you can and should proceed with criminal action or civil action.
Generally speaking, you cannot withhold personal assets in which you do not have a security interest. You don;t want to use self-help remedies if that is going to result in putting your friend and/or her LLC in legal hot water.
Good luck. It won't be easy to resolve, but there would seem to be some elements in place that gives your friend some leverage that she can exercise.
P.S. It is quite possible, even likely, that your friend is a guarantor of the LLC with respect to the credit card. If so, I can guarantee (no pun intended) that they will take legal action against both her and the LLC if it becomes necessary to do so.
rails
on January 19 2010
omg i freakin LOVE this song its totally awsome
esglobetrotter91
on January 20 2010
It depends on lots of factors.
Why not just play it safe.
Put the money into the company as owner's equity, then have the business pay the debt.
Write the company a bill for the money paid already on the credit card, and have them pay you back. You can always put it back into the company as owners equity.
The risk is, that if the business goes under, and is in a lot of debt, the creditors might say, "hey, it is his company, not a seperate entity, we can collect from him.
There is not much risk, you are actually paying the company's debts, you are thinking like the creditors. In the future don't do that. Let the company pay the bills via the company, otherwise if the company goes under, and has huge debts, they might sue you for everything to pay the debts.
Make sure that once this creditor is paid off, you don't use them again. They already have you compromised. It might be too late anyway.
DMG
on January 20 2010
When a merchant applies for a merchant account, there are a number of documents that he or she will have to submit. Whether your business is new or an existing one, the application process is the same.
As far as credit history is concerned, a review of the business' financial performance will almost certainly be done during the application process. A typical request a card processing company will make is to see the business' financial statements for the latest two years. The organization's principals will also be scrutinized and they are usually required to provide their tax returns for the latest two years. If not satisfied by the information in the tax returns, the merchant services provider will pull their credit files. Either way, SSN must be provided. You need to understand that banks view a merchant account as a form of a line of credit and the application process is designed accordingly.
The Organic Sister
on January 20 2010
well, tia
I have no clue where you're located–but– in the U S A there is a STRONG cause for you to NOT be GIVING this business to your friend without SOME compensation— otherwise she will incur some extremely heavy taxes on the assets that she acquires as it will be viewed by the tax people as a GIFT and gifts of any sizeable amount can very easily be taxed and taxed hard in certain jurisdictions !!!
My suggestion to you would be to do a SALE but to make the compensation — something like twenty dollars or so—a nominal amount but yet— compensation none the less and it removes the GIFT thing from the table !!
Next– you really should get a lawyer– and do a very simple bill of "sale" on this transaction— surely you could find one that is honest within driving distance of you somewhere (??) — This Bill of Sale should be simple but thorough and state that you are releasing all rights and priviledges AND SHE is assuming all liabilities and assets !! The charges for a simple sale like this should also be nominal !!
Major deal here though !! With bad personal credit and no business credit— your friend will have absolute hell on earth assuming YOUR business credit card account—- a much wiser deal here would be for her to approach getting a card on her own for the business once the transfer OF the business is done— for THEN she will have "added value" and "asset" on which a credit card company can bank on the return of the credit that they extend !!!
Hopefully there are things in this that you can use — and I am wishing you a very happy retirement— I'm sure you have earned it !!! And, Good Luck to BOTH of you in your new lives !!!!
earthlink
on January 20 2010
it is awsome
jpro
on January 20 2010
love this song and i love paramore
psychic
on January 20 2010
i neva thought i would like a song like this but damn …its really good
jerknob
on January 21 2010
You left out one very important detail. Who did the credit card belong too? If this was a personal credit card or an LLC credit card that you personally guaranteed, an LLC bankruptcy won't mean anything at all with respect to any personal obligation you have to repay the loan. Also, a bank could sue to stop you from getting a discharge if you borrowed the money with the intent of not repaying it.
truth
on January 21 2010
i luv this song! It makes sense……It happens all the time.