How To Split Business Income Between Partners

January 20, 2015 by Will | No Comments | Filed in Articles

One of the hardest things for new business owners to figure out when forming a new corporation or partnership is how to split profits.

Often times 2 or more entrepreneurs will enter a business venture with the notion of sharing profits 50/50. But what happens when one person does 90% of the work while the other only contributes 10%?

Is this still a fair split?

To complicate things even further, what if your business partner was a family member or close friend? If you’re the one doing 90% of the work but only receiving 50% of the profits, how do you go about approaching your partner with a request that you take home more of the profits?

Here’s one possible solution.

Do You Have The Right Business Structure?

This is where so many people who try to save a dollar and incorporate themselves without really understanding the different business structures can do more harm than the pros of saving a few bucks.

I understand when you’re starting a new business you’re probably building it on a skeleton budget, but there are a few places you should not skim on, one of those being structuring your business.

Understand this: If you set up the wrong business structure you could severely limit your business’ growth potential, profit distribution flexibility, asset protection, and tax incentives – among others. This is why it is so critical to get incorporated if you’re thinking of setting up a business.

As a quick example, we could take a look at one major difference between a S-Corporation and LLC.

In a S-Corp, tax liability and profits are set 50/50 for partners (or equal percent if there are more than 2 owners) whereas in a LLC partners can easily reallocate these.

So your first step is to make sure you have the right business structure in place for the dynamics of your business.

Create Positions In Your Company

The next thing you can do is sit down and figure out all the different functions in your business. Here are a few ideas to get you started:

  • Are you the person who hires and fires employees? You’re the HR department.
  • Who does the accounting in your company? They are the accountant.
  • Who meets with vendors and stocks inventory? They are the Purchasing department.
  • Do you handle your website maintenance and computer issues? That’s the IT department.
  • Who does the advertising? This is your marketing department.

Do this for every function in your business. If both you and your partner share some of those responsibilities, try to figure how much each contributes percentage-wise. If you’re not sure (and you’re in no particular rush), set this list aside and jot down how much time each of you contribute to each department over the course of a month or two.

Assign Wages For Each Position

Now that you have a nice outline of the different positions in your company you can then assign wages to each of those departments. If your business’ income fluctuates, it’s often times easier to divvy up income for each department as a percent.

At this point, you should now be able to approach your partner with a logical outline of how your business is really being run and evidence to support why you deserve more of the profits than 50%.

Have you ever experienced a situation where you felt you were due more $$$ in your company because you did the majority of the work? How did you deal with it? Or did you just let it be?

What’s up Next for Our Small Businesses?

January 18, 2015 by Will | No Comments | Filed in Articles

No doubt that last couple of years have been a big economic challenge for all businesses. The one thing for sure to remember about the economic downturn is that you, as a small business owner, will get no bailouts if you get into trouble. Although the economy is a little better we still have some challenging times ahead  in the future. My guess is that we will be digging out for the next couple of years minimum. So What should we do to protect our portion of the marketplace. Here are some basic ideas that I know you already are acquainted with but maybe need to reconsider:

1. Review, update and work even harder to retain the customers you already have by making sure your pricing, customer service strategies, and product delivery efforts are over the top. Don’t just think about it!!! Get your staff together to review and develop new strategies going forward. Your customers are having economic problems also so make sure you give them every reason to spend their limited funds on your products.

2. There are few small business quotes that had more impact on me then, “Innovate or Die” did. Look for new ways to stay in and grow your market. Look for new product lines, new marketing strategies to grow the business,  more efficient delivery systems,  and ways to improve on service.

3. Do a current break even analysis and do a product pricing review to make sure that you are staying up with your competition. Make long term pricing strategy changes where necessary and take a look at short term pricing strategies that will help boost your identity within your target customer group.

4. Do an organizational review of contractors, staff, and all associated expenses,and make adjustments where possible. This is one area you should be looking at each time you do a quarterly review of your business.

5. In a small business relationships are important both for long and short term success. Create a plan to involve you and your staff in areas that will create added credibility and loyalty within the community where you are doing business. Make sure your business is registered and you are filling your taxes even when making loss. You can search business online using sites like


Admins Note:

I’m sure there are a lot of other good ideas but we have used these as our first tier objectives in efforts to improve our revenue stream and grow our business long term.

Hi, my name is John Hoff and like you, I’m an entrepreneur.

Our company and website is a little different than the typical “we can incorporate you” website, so I’d like to talk about that first and then below the three of us will tell you a little about ourselves.

About Our Website & How We Got Started

If you’ve been website surfing the different “We can incorporate you” websites for more than about 5 minutes, you’ll notice quickly that our site is quite different than the others.

This was not done by accident, I assure you.

It was a game we use to be in, but these days we provide more private coaching for a select few.

We are a family of 3 entrepreneurs (mother, son, and uncle) each with our own talents, more on that below… but for now, just know that I’m the “online entrepreneur”.

I designed this entire site myself, wrote most of the business articles, and the one thing I wanted to make sure and do was give our site a personal feel.

Listen, I’ve been to those other incorporation websites, and you know what, they just suck. Yep, there you go–I’m not afraid to say it. We have, however, partnered with a company who we like and takes care of incorporation and business filings for our visitors and customers.

Years ago we use to work for companies which incorporated businesses.

We dressed up in suits, chatted on the phone with clients, all the while a floor boss would walk around offering up extra cash bonuses for anyone who could make a sale in the next 10 minutes.

I’ve even been told to sell things my clients really didn’t need just so the company could make a few extra dollars. I remember that day… that was the day I said“forget this” and began my journey as an entrepreneur who’d be his own boss and work from home.

I mean, hey that’s the dream of most entrepreneurs, right?

I know you don’t know me from the next guy, but I’ve been very fortunate to grow up in a wonderful, loving family–and those good ethics guide me in everything I do as a person and businessman. So I set up a website, teamed up with my mother, Theresa Hoff, and began helping new business owners get their business structures set up properly and with no hassles.

But I have to admit something to you.

I learned that even though I knew a lot about setting up business structures and my mother could set them all up, many of the entrepreneurs who contacted us had tons of investments and assets which needed to be sealed up and protected as best as possible.

Yes I know a lot about business structures and asset protection strategies, but you know what…

…there was one person who knew even more than me, and he too was itching to get out of the corporate offices and simply get real with people in his own home-based business.

So at a family BBQ one day I pulled my mother’s brother (my Uncle Al) aside, had a chat with him, and now we’re the 3 home-based business entrepreneurs who’s site you’re reading now.

We worked for awhile incorporating businesses just like our partner BizFilings does, but eventually moved on to advice and coaching.

Okay, so let’s tell you a little about ourselves; I mean after all, I did say I’m an online entrepreneur so surely I can back that statement up, right?

Who Is John

Well, that’s me… I’m the guy writing all this stuff. I also authored many of the articles on our site about business structures and business related topics.

Rest assured, though, I’m probably the one who knows the least about business structures and asset protection strategies.

Like I said earlier, I’m the online entrepreneur while my mother and uncle are the corporate and business structuring gurus.

I was born in Southern California but have lived here in Las Vegas, Nevada for most my life. I graduated from the University of Nevada Las Vegas back in 1999 (6 years full-time) and hold degrees in Computer Science and Mathematics.

Years ago I use to dabble in flipping real estate, but these days I make a lot of my money through my online endeavors. I am part owner of a WordPress hosting website and I also have a blog in which I blog about making money online through blogging and affiliate marketing.

In addition to that, I’ve also written an ebook called, WordPress Defender, in which I show WordPress bloggers how to secure their blogs (i.e. websites) against hackers. I have a number of other niche websites as well… this, however, is my only family-owned business and thus is very dear to my heart.

Who Is Theresa

Theresa was born in Southern California and moved to Las Vegas in 1984 where she worked for the Hilton Corporation as a legal assistant under a few of the Hilton’s top attorneys.

When Park Place Entertainment took over, she became a Paralegal and certified notary and worked directly under Park Place’s contract’s lawyer. During this time she traveled around the country getting her certifications in managing stock options for the Hilton/Park Place’s top executives.

Following her brother, see below, she joined him in the business and asset protection field. While Al structured the companies, Theresa filed the actual corporations with various state’s Secretary of State, put together corporate compliances and resolutions for newly incorporated customers. In other words, she got it all filed and put together.

She now enjoys working from home, as do all three of us, and helping people just like you structure their businesses for joint ventures, tax incentives, and asset protection.

Who Is Al

Al is the top gun and our secret weapon when it comes to corporate structuring and asset protection.

Also originally from Southern California but now living in Las Vegas, he’s a former L.A. police officer and has worked in the business structuring and asset protection field for over 15 years.

Al’s primary focus at first is to make sure he has a clear understanding of our customer’s wants, budget, needs, and current asset/business structure. From there he does a full analysis of where you stand and puts together a plan which is tailored to you specifically.

Are You Ready To Get Started?

If you’re ready to set up a business structure of your own, contact our partner BizFilings. They can even answer any questions you have. If you prefer to call, here’s their number: 800-981-7183 and Mention Code #A2055 on the phone so they know where you’re coming from.

Killer Business Plan Tips and Ideas

January 18, 2015 by Will | No Comments | Filed in Articles

business planHere are some good business plan organization ideas from Tim Berry to consider when getting ready to write a business plan:

There are also some business tables and charts that are normally expected in a standard business plan.

Cash flow is the single most important numerical analysis in a plan, and should never be missing. Most plans will also have Sales Forecast and Profit and Loss statements. I believe they should also have separate Personnel listings, projected Balance sheet, projected Business Ratios, and Market Analysis tables.

I also believe that every plan should include bar charts and pie charts to illustrate the numbers.

Lets next take a look at an expanded Business Plan Outline that is more comprehensive:

Expanded Plan Outline
1.0 Executive Summary
1.1 Objectives
1.2 Mission
1.3 Keys to Success

2.0 Company Summary
2.1 Company Ownership
2.2 Company History (for ongoing companies) or
Start-up Plan (for new companies)
2.3 Company Locations and Facilities

3.0 Products and Services
3.1 Product and Service Description
3.2 Competitive Comparison
3.3 Sales Literature
3.4 Sourcing and Fulfillment
3.5 Technology
3.6 Future Products and Services

4.0 Market Analysis Summary
4.1 Market Segmentation
4.2 Target Market Segment Strategy
4.2.1 Market Needs
4.2.2 Market Trends
4.2.3 Market Growth
4.3 Industry Analysis
4.3.1 Industry Participants
4.3.2 Distribution Patterns
4.3.3 Competition and Buying Patterns
4.3.4 Main Competitors

5.0 Strategy and Implementation Summary
5.1 Strategy Pyramids
5.2 Value Proposition
5.3 Competitive Edge
5.4 Marketing Strategy
5.4.1 Positioning Statements
5.4.2 Pricing Strategy
5.4.3 Promotion Strategy
5.4.4 Distribution Patterns
5.4.5 Marketing Programs
5.5 Sales Strategy
5.5.1 Sales Forecast
5.5.2 Sales Programs
5.6 Strategic Alliances
5.7 Milestones

6.0 Web Plan Summary
6.1 Website Marketing Strategy
6.2 Development Requirements

7.0 Management Summary
7.1 Organizational Structure
7.2 Management Team
7.3 Management Team Gaps
7.4 Personnel Plan

8.0 Financial Plan
8.1 Important Assumptions
8.2 Key Financial Indicators
8.3 Break-even Analysis
8.4 Projected Profit and Loss
8.5 Projected Cash Flow
8.6 Projected Balance Sheet
8.7 Business Ratios
8.8 Long-term Plan

Why Good Ideas fail

January 12, 2015 by Will | No Comments | Filed in Articles

ideas failWell it has been awhile since we have posted to our business blog. Even though the market place is showing signs of improving and the stock market is beginning to respond it is still clear we have a long way to go before we see a return to a retail market that we experienced some two years ago. I’m going to write a couple of articles one on bad and one on good customer service. Small businesses must survive in the long haul by first having something folks want to buy and second by providing the type of customer service that will bring new customers through the door to purchase your product.Today I’m going to give you an example of how a good product can fail in the marketplace just because of poor support or customer service. I’m an avid flight simmer. My platform is Microsoft Flight Simulator X but I also buy a lot of flight simulator add-on products such as aircraft, scenery, and utility type software, to enhance my flying experience. I recently purchased a program, FSPassenger, that is a business, career, and passenger interface program, that helps you build your own airline and then manage and fly it.

It’s a truly a great little program that does wonders for the flight simulator experience. I recently had to re-format my hard drive on my computer to make way for Windows 7. In the process my original key code used to re-install the program showed as “no longer valid”. I went to the site and posted on the support forum and also sent a separate email asking for a new code and giving my original purchase information. Well folks it has been since May and after many emails and postings still no code. The site admins tell me that the owner is very busy and will get to it when he can. The forums are filled with discontented customers like myself with the same issue. Now new potential customers are becoming concerned about even purchasing this product. This is a sure way to kill your market place potential for good even if your product is a good one. My recommendation is make sure you maintain enough resources to assist folks who need your help and handle them as quickly as possible. Once the word gets out that your support and customer service is flaky you will fail even if your product is a good one.

Another example of great customer experience is Uber. In less than 6 years they are valued over 50billion dollars and employs over 150k drivers. And with introduction of services like  Uber estimator, now users can know the prices of Uber  before even hailing the cab.

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