Let's Talk with Leaha & Rhonda

Unknown Speaker 0:00
The following is a paid program sponsored by Crawford management group and smart time consultants. Please be advised that the voices and opinions you may hear do not necessarily represent the views of K, u and v Las Vegas, the University of Nevada, Las Vegas, or the Board of Regents of the Nevada System of Higher Education.

Unknown Speaker 0:25
Hi, this is Leah Crawford.

Unknown Speaker 0:27
And I'm Rhonda Nolan.

Unknown Speaker 0:28
Welcome to the let's talk with Lee and Rhonda show. We're here for

Unknown Speaker 0:31
you and we're ready to go. Let's do it. Good morning, Las Vegas morning. Good morning. Good morning. Have you been up this morning and done your walk up? Saturday morning, it's time to get up and get out net fresh air and do your morning walk?

Unknown Speaker 0:51
Yes. That's all I can say is just because I guess we need to I mean, heart health is important it is and we have to work we need to work out we even if you just put one foot one foot in front of the other walk to the corner and back. That's right a couple times. That's right. You need to get

Unknown Speaker 1:08
out and walk. Absolutely. Welcome to the less talk with Leah and Rhonda. I am Rhonda. I am Lee. Good morning.

Unknown Speaker 1:17
Good morning. Good morning. So Friday, today, we want to do something different. We're going to we got a guest in the studio. And we're gonna have him ask us some questions. So we can have some dialogue. Because I know our listeners, you know, some people want to start small businesses, they have different questions. And I think that if we have a dialogue this week, let's see how this goes today.

Unknown Speaker 1:36
All right, let's try it. All right, let's try it. All right. So today, we're gonna talk about how to start a new business as a sole proprietor. We're gonna talk about what you need to do that and how you do it.

Unknown Speaker 1:48
Okay, got any questions for us? I do. Alright, so I am in the media business. Okay. And I landed a client. And I'm consulting her on how to create a podcast. Nice. And I obviously want to turn this into a business, I can do full time. How do I go about getting started with that?

Unknown Speaker 2:10
Okay, so what I would do is if you are starting a business, and it's not something major, small business, I would always start off as a sole proprietor, I would not my professional opinion, I would start off sole proprietor because of the fees. You can get a state business license, you can get whatever jurisdiction, you're in a home based business license, and you can get an EIN number. And even if you want a DBA, you can get a DBA with the county in that name. So you would get the DBA go get the state business license and the DBA. DBA is just doing doing business is just doing business. So you're not using your name, you can have a sole prop doing business as you can get the federal ID number with the doing business as and you can also get the home based business license with the doing business as and what we found out during this pandemic is those licenses are important. Because even if you were a sole prop, you would have qualified for a lot of the local monies, the state and local monies by having the correct business licenses in the jurisdictions, right to show that you were in business generating revenue. So those business licenses are very important. And as a sole prop you do save some money on the fees, the initial fees, and find out if you like doing the business if you like being a business owner, because you also have to get a bank account as well. So find out if you want to do to business, if it's something that's going to generate money, right, because you know, three years of a loss, it's a hobby, just real, just real easy. But just find out if you want to be in business, if there's something that you want to do and build it from there, because you can always turn it into an LLC or an S corp, or you know, as you get more sophisticated as you start earning more money. But if you're just starting out, you're not sure where you got one client, because the moment you accept your first check, you're in business.

Unknown Speaker 3:58
That's right. So the difference between having a sole prop license and the LLC license is several $100. It's $200, to have a sole prop license, and it's 575 to have an LLC, and you would go about getting this license at Silver flume.gov. Right, that's where you go to actually do the business licensing. And you must have, if you're going to open up a bank account, you must have a license to do that. Otherwise, they're not gonna open an account for you. So when you go to silver Flume, and you and you purchase your business license, after you purchase your business license, they will send you an email letting you know when they're ready, then you log back into silver flume and you download those business license and make sure you download them and save them somewhere. Actually, I would download them and then I would print them out. And I would have a private copy in a folder and I would have my PDF on my computer. And the reason why I tell you that is is because if you misplace the business license, they're going to charge you to get a copy of it. They're going to charge you $50 So say you know six months from now you're Looking for that business license, because you're applying for a grant or applying for some money somewhere with the bank, they're gonna say, oh, we need to see your business license, if you don't have a copy of that. And you go back and say, Wait a minute, I went back home, I don't see my copy. That's because they've taken it away. And they will charge you an additional $50 to get a copy. And

Unknown Speaker 5:17
the only thing about it is, is that they download it, and they have it in your file for 60 days. And best practices with documentation, start in electronic file, right? electronic file, or have used like me, desktop, electronic files, learn to use it and keep your documentation and it could be in VSLs. The thing about silver flume now is that you automatically register for Department of Taxation, when you set up your sole prop. Got it. So when you set up, you say you set up your account with the state. And then you also set up with the Nevada Department of Taxation. And it walks you through the steps because we're certain bits, and they'll ask you, you know, are you going to have employees are you going to sell products, because they want to make sure that you have the right tax account setup, and you'll get a tax ID number as well. So you want to just take, I mean, a lot of resources out there, but you want to take the time to make sure you have all the right business licenses the inner right jurisdiction and against state business license first than the jurisdictional business license. And I know what the state of Nevada used to be very confusing, but they've tried to make it kind of simple for you to walk through to make sure that you have the right accounts with the right agencies in order to operate your business legally in this state. So we help people with that we help people with that. Well, just to understand just what the flow is because sometimes it can be very confusing, very confused.

Unknown Speaker 6:42
It can be and you mentioned Okay, so you mentioned taxes. So for an LLC or a sole proprietorship, are they the same when it comes to filing my taxes? Is it's just like part of my personal income? Or is it something that I do entirely separate from my personal tax?

Unknown Speaker 6:56
Okay, so it depends on when you're set up, again. Alright. So when we talk about taxes, department, taxation is something different is Nevada Department of Taxation. Remember this state in Nevada, we don't have a state income tax, right? So we have the sales tax. So when people know when you go, you buy something from a store or and you pay that sales tax, well, that said, store vendor, whatever you want to call, it has to remit those taxes to the state of Nevada, and they do it either monthly, quarterly, or some people annually, because they have little to no taxes. So depending on your business setup will determine how much taxable income that you might have. And the several, several different things because at the end, I mean, for most businesses, if you have employees, you have to pay to modify business tax that comes through Department of Taxation. If you are something somebody that collects sales tax, you have to remit that to the Nevada Department of Taxation. And then if you have if you buy goods from out of state, and you don't pay in Nevada tax and the goods are used here, there's a you know, sales and use tax is a use tax. So not complicated what I love. But I what I do love about the state of Nevada is that the people down at the Department of Taxation will explain to you exactly what you need. If you're confused. I know I mean, I don't know what it's like with COVID. But they're very friendly. They're open and honest. But as a sole prop, you're just starting out because even as a sole prop, if you decide you want to stay that because we're just talking about federal taxes. If you're a sole prop, you do a Schedule C, right. If you are an LLC single member, you can do a Schedule C that's on your personal tax return, or you can elect to be in a corporation, which will be an 1120. Also, as an LLC, you can elect to be an S corp. So depending on what you decide you want to do, again, having that accountant, as a friend, have monad attorney as a friend, just having a casual conversation or you know, just going out and paying them for their service for our time just to to understand what you're setting up researching on the internet. So you have a basis to go by. And sometimes it can be confusing, because there's so much information out there about what you should and should not do. My suggestion always is start off as a sole prop. Pay the licensing fees, because it's a lot. Find out if you want to be in business or is this business profitable? Before you go spending a bunch of money? Oh, I got an LLC. I got an LLC and then next year, it's in default in three years is revoked because you didn't pay the fees every year? No, because honestly, once you start those, you have to pay the fees every year. And the fees are cheaper as a sole prop than as a LLC S corp because LLC annually with the state is 350 and a corporation is 650. So, you know it's a lot of money when you're talking about renewal keeping up these licenses and then you got your jurisdictional license that you have to keep up because you want to be in business. So Oh, you know, starting a business is real key, just make sure you understand what you're doing and then what the goals are. So another question.

Unknown Speaker 10:12
Okay, as a consultant, I wouldn't be dealing with sales and use tax, though. No,

Unknown Speaker 10:17
you wouldn't deal with sales tax, you do what you said, gotcha. Okay, because you still have to file to use tax, you still have to file the use tax form quarterly. But is it just a use tax form? And it most time is zero? Because they base it on? Did you get some products from out of state that you didn't pay Nevada sales tax on? You know, are you using something that you didn't pay in your business that you didn't pay Nevada sales tax on, that's, that's the use tax, and for most people is zero, but they just want you to file the form. Again, doing your due, it's no penalties if you don't owe anything. So

Unknown Speaker 10:51
just understanding that for you, you're a little different color, because you are already in the business in the media business, and then you're just starting a company that shoots off. So for you, because you're in the business and you do it every day, you don't necessarily have to prepare a business plan or marketing plan. But if it was someone who was opening up a business that they were not familiar with, they would have to have those documents,

Unknown Speaker 11:16
I would still do a business plan, though. And the reason why I will still do a business plan for him is because he is in the business. It's a lot easier for him to dump, right, and to talk about the services he wants to provide. What is the what are people out there getting for those? What are they charging for those services? What are you actually being paid? And then Who's your competition? Because it's always good to know who your competition is? So doing a real SWOT analysis, that's, and then what are your strengths? What are your weaknesses? Where are your different opportunities and identify? And what are the trends? Because right now, people are trending to social media, virtual stuff, and you're in media. So what are your trends, and you know, so you can put everything together and start thinking about it, you know, thinking about it differently. And plus, it might jog your memory to be able to service your client better, because it gives you some ideas for your clients. So I will even if you're in the business, I would always do a business plan. You would just use it a little bit differently, because you are in the business, but you always have a plan, no matter what you do you plan it, plan and then put some numbers to it. Because we where do you want to go with this? Where do you want to go with this? You know, do you want to take your company public? That's a whole different conversation and just having being realistic and, and like somebody told me, If your dreams don't scare you, you're not dreaming big enough. Like that. Not they don't scare you, because they should i You shouldn't be scared. I'm just scared to get out the bed. That's how you know, you're thinking big enough. If you okay, I can do it. And you're not thinking big enough, think bigger, think bigger, do more. And go on public going public is real for people. You know it, it's about being around those people that are thinking like that. And how do you get there? You know? Interesting. Yeah.

Unknown Speaker 13:05
All right. Here's another question about funding. I have a potential second client. But in order to get this client, I need to buy some equipment that I would be able to use video cameras and some stuff that I don't have or haven't got enough money from my first client to be able to purchase yet. Is there any options for someone? Yeah.

Unknown Speaker 13:25
And that's what a business plan is. Right? Right. Business Plan is important, right? Because you know, you have to have this equipment, right. And if you go for funding with some people guess what they want to see business plan, business plan, they want to see your projections, they want to know what you're going to do with it. Now, depending on the cost of the equipment, all right, cost the city equipment, several different ways a small, small business owner, some of us sell finance, that means we got credit cards, we go buy the stuff that we need, and just pay the credit card bill back to the company. Loans. Loans are very hard to get externally, especially when you're starting up. Gotta have a credit score, and depending on where your credit score is, things like that investors. So you know, asking some friends, you know, you know, you need X amount of dollars on your business plan, and you can give them different things. There's so many ways to get the money. But again, gotta think, you know, no one how much it is, right?

Unknown Speaker 14:20
To create a budget, gotta create a budget for all of the tools, you're going to need to run your business as a business plan. And yeah, and the budget is part of the business plan. And then once you see what your needs are called Startup PA, then you know exactly how much money you need. And if a you need to work for three months and save it yourself, or B go to a family member or a loved one to ask for a small, a short personal loan, or now these days a lot of these companies, they're offering loans, you know, right with the company that you're buying the product from. So you can go online and if there's say $1,000 worth of equipment, you need that particular company is offering you you know, six months no interest or a year no interest, they will work out a payment plan for you to get that that that event. If not, then you take your Capital One credit card and you purchase it with your Capital One credit card, and then you pay on it every month until you pay

Unknown Speaker 15:16
the other side's who was banks. So when you go set up your bank account, a lot of banks when new businesses come in, offering, you know, I guess they pull up your EIN number, social security number and they see Oh, and at one point in time, I know that one bank where you walked in, they were off your $25,000 line of credit. Yeah, yeah. So right, right. No, it was real. But that was some years ago, that was free COVID. And I know now with everything that's going on. They are slower to open accounts. But those options still could be out there. Because when you open up, even if it's a sole prop, it's a business account. And with business accounts, they are going to ask you different questions. You know, I know QuickBooks when I was in the software, they were offering small loans to business owners. So it's money out there in so many different areas and arenas. But again, like Rhonda said, the budget, the budget, the plan, the plan, so what's the plan? What's the plan, and you can't just willy nilly, I'm just gonna, you know, hey, I'm gonna, you know, I'm just, you know, flying off the cuff Nah, man, plan this thing. Plan this thing didn't Dream big. Dream big and put it on paper. Dream big and put it on paper? What is it that you want? And what is it that you want to accomplish? You know, your mission vision, your value statement? You know, is this client? Because if you're going out and buying this equipment for this client, is this equipment just sole use for this client? Or can you use this equipment with other clients? So it's just some, you know, some simple questions. You know, sometimes I say common sense questions around always reminds me know, LEA is not always that, you know, it's not that common, right? Because it's exposure. And what are you being exposed to? You know, and that's why the business plan then becomes important, because when you're buying study equipment, you want to know if you can use it? How many times can you use it, you know, what is the equipment? You know, how how fast does it depreciate? So it's a whole lot, it's a whole lot of stuff to think about. To think about, you got another question?

Unknown Speaker 17:19
If I was to hire, I've never hired help and use the 1099. Before, what what is the process of of for tax purposes and whatnot, like to hiring someone as a 1099? Contractor is so simple, or is it

Unknown Speaker 17:36
is simple? This is interesting, okay. All right. So you got to I'm not gonna say employees, people that work with you, that's what we're gonna call it people that work with you, yes, support staff, because employees are partners, whether they're employees or partners, basically help you to get this product, you know, to sell this product. And I've seen times where people hired people to help them with projects, and they don't make the money off the project. Because they didn't build it right. They didn't bid it outright, or when it overran and stuff like that, if you want to hire if you contract with and what contract with someone to help with this project? First of all, there are certain things with being a contractor and being an employee. Now at the contractor, do they have their own business setup? Do they have an EIN number, you want to get a W nine form? Okay, because if you pay them more than $600, you have to give them a 1099 in ECE at the end of the year. And notice I said NEC, because that's a new form that just came out this past year non employee compensation, got it and do in little things. Does this person do this for live? And if you're contracting them, because you don't want to get into the thin line of are they an employee or odd they have contract dirt, and a lot of people play on that line? Okay. You want to make sure that this person is you know, this is what they do. And you're just hiring them for said purpose to fulfill this contract to service this client. So you want to make sure that the verbiage is there, but once you do say Yes, I got the contract, you pay them. If you pay them more than 600. You do have to give them a 1099 at the end of the year. And like I tell people you get the W nine prior to you giving them the first paycheck.

Unknown Speaker 19:32
Gotcha. And that's over 600. This you said over $600 in over a

Unknown Speaker 19:36
year during the year 20 years. So this calendar year. So IRS goes well even if the company has if your company has a fiscal year in or whatever IRS says is calendar year, so all forms are reported calendar year. Now the taxpayer can have a different designation but for the most part all forms are calendar year. Calendar A year, calendar year. Good question. Oh, thank You that was that was it because employees have yet so that's an interesting, it's an interesting topic. And I get into I have a lot of car conversations with people, when it comes time to get w nine from people that they're paying or telling them that you can't take the deduction. If you don't have the backup, if you're not going to follow it all the way through the less file with all the way through, let's report this income so you can get this deduction.

Unknown Speaker 20:26
Okay. Make sense? Yeah. Are there any insurance considerations I need to look into as a consultant and

Unknown Speaker 20:34
see that's part of the business plan? See all these questions you're asked? Oh, this part of the business plan? Well,

Unknown Speaker 20:38
the reason I asked is I try I've tried to fill out a business plan, I see these questions and I don't know, right, you know, no,

Unknown Speaker 20:44
I'm, I'm in your business. I don't know. I'm not first, I would say always minimum policy. And it's a hazard insurance policy, just what and you can call somebody that does business insurance, and talk to them about it, because they are better versed in it. Like for my business, since I have a brick and mortar location, we have the insurance for the brick and mortar, which includes the hazard insurance, which includes I didn't realize I had automobile insurance included. Right. So that's included in this in this pop? No, because they read the policy to me. So an understanding that you have to find out for your industry, what are the best practices for insurances for that industry? And I'm sure, find someone that does business insurance, they can basically guide you. And rule number one, we had a conference, I was having this conversation yesterday on I went to a virtual class in a virtual classroom. We were talking about being entrepreneur, and what bills do you pay first, and I said the insurance, pay the insurance first, then impairment and everybody else can figure it out. But first bill is paid is the insurance and I happily pay the insurance around happily pay the insurance. Got it, whether it's car insurance, life insurance, whatever pay my insurance is first because if something happens to me, I need to make sure that everything else is taken care of. So God first any insurances, you know, and then everything and then everybody else figure we all figured out after that, but, but you want to make sure that you have the proper insurances on your business, because if anything happens, you want to make sure that you're insured. Got it. Awesome. Yeah. Any other questions you might

Unknown Speaker 22:32
have? I think you covered most of what I have. Okay.

Unknown Speaker 22:35
All right. But that business plan, yeah, and you want to start writing it. And if you need somebody to review it, I'm sure Rhonda will look over for you. That's what she does. But um, she she's alright, she's not paying me No Ma right now. But yes, I

Unknown Speaker 22:47
am. And I was just gonna say, for you, and for any listeners out there, you know, if they want to, you know, run some ideas by us, you know, they could reach out to us.

Unknown Speaker 23:02
And the thing about it is that you want to have someone look at your business plan that is not in your business. Sure. Right. Maybe someone that's knowledgeable about business, but not in your industry, so to say so that they can give you some constructive criticism, and I know some people you know, they want to be a one fabulous all the time. No, no, I like it when I'm not fabulous. Because you show me where I need to clean it up. Things I can do better, because my thing with business plans are the numbers, making sure the numbers make sense. Because you can't tell me that you want to sell 2000 widgets and you got to budget for zero, I mean budget for 50 that I mean, just just the common sense making just making the numbers make sense, you know, what are your pro forma financial statements and when you do the business plan, it might seem overwhelming at first, but if you chop it down into smaller pieces, it all should make sense because somebody should be able to read this and explain to you your vision because when you go to get financing and you go to do different things, guess what they're gonna do or read the numbers and then they gonna look at certain places to make sure that you know what you were talking about when you were putting these numbers together you know, there's a place in the budget in the business plan for startup costs. So if you know that you need certain equipment, and you don't just plan for now like I said dream big. What does it look like for you to have the equipment you want to have this media company you want? You know dream big, like Go big or go home? I mean go big. What does it look like? What does this raise thing look like? What does it look like?

Unknown Speaker 24:46
Interesting and the reason why she said to have someone else read your business plan is because they can look at a business person can read a plan and understand that this a great plan even if they don't know anything about your business. And it also preps uses it when you have to go To the banks and get funding from the bankers questions, they ask you questions, you can answer the questions, and they understand what it is you're trying to do. And if and understand when you go into these banks to get these loans for your businesses, it's just not one person making a decision. It's a team of people. So said banker that you go to, you have to explain to him what you're doing. And then he has to go into another room and explain to five other people what you're doing, and they haven't been to them, convince them, and then they should give you a line of credit to their business. And then all five or six of those people have to say, yes, they have to vote on majority of it exactly. In order for you to get the line of credit. So that's why it's so important to run it by other business people so they can give you a kind of idea if you're going in the right direction.

Unknown Speaker 25:41
Yeah, so yeah, yeah.

Unknown Speaker 25:44
Well, that's why I wanted to ask you ladies because I am not afraid to admit when I don't know some,

Unknown Speaker 25:48
Hey, you want to know what I'm learning? The more I learned, the more I realized, I don't know. And it's okay. It's okay. Because I'm like, Oh, wow. So that's how you do that. But what I love is what but what I love is because I keep a big we keep a beginner's mind. And it's like, wow, really did that just happen? I mean, but also knowing that we have our past experiences, because as entrepreneurs, you know, you have to be flexible, you have to be ready for change. And you have to be willing to adapt, adjust, and move forward. You know, plan, doing, review, adapt, adjust, move forward. Some things I do, well, some things not so well, you know, but I can improve on all of it. Because I'm human. You know, every day I wake up, it's a different day to start all over again. But the biggest thing is dream big. What scares you? That's where you need to go. What scares you? What scares you? You know,

Unknown Speaker 26:41
what scares me? What scares you coming up with the plan and not having a way to execute it? And guess what,

Unknown Speaker 26:47
once you come up with the plan the execution and be there? That's right. Execution of comp, because I can't tell you I don't have I don't have. I've had, um, I had no idea I would have this business deal because when I started it, it was out of the need my my, the job, I had ended. And I was like, alright, so I do tag I played like, I do taxes every year. So let me just go ahead and do it. You know, I've got my first office. When I got my first office. The rent here in Vegas was $500 a month. And I was scared to death. I was like, why am I paying them every month? Now, 15 years later,

Unknown Speaker 27:24
the rent has tripled. And you still

Unknown Speaker 27:26
do Yeah. And I pay him happily. But the thing about it is I was scared. You know, I wouldn't go to work because I was I had a home office and I hired somebody and they were like, you never come into the office. I was like, No, I'm gonna I'm gonna go in there. No, for I mean, this is real. This is this actually happened. And I had to look at me like, why are you scared to go in your office? What's wrong with you? And it scared me because it was like, you are really going to step out here and really provide a service and kept on doing it and kept on doing it. And it's like, alright, I can do this but it scared me at first I had no idea and then having employees was a one time I had multiple employees, you know, having to make sure that they get paid. After I paid the insurances, but but making sure that they got paid. So it's it's a lot and it's in walking into it now embracing it and thinking bigger, because now I'm planning to I am going I'm planning to hire somebody real me we're gonna hire somebody because we need help. We got the business coming in, we need help to make sure that we can provide the same level of service to make sure that we grow and grow effectively and efficiently. Because I tried growth before I wasn't good at it. So I scaled it back down now we're gonna we're gonna do it again, a different way. Plan, do review, plan, do review, you know, so being an entrepreneur probably is the best thing that I can say that this happened to me I love being an entrepreneur. Love it. Love it. Love it, you know, but dreaming bigger now. Well, multiple businesses scared me see that scared me. I want multiple businesses now. And I'm ready. It scares me. It scares me. That's how I know that that's the way I need to go.

Unknown Speaker 29:17
Got it. Very cool.

Unknown Speaker 29:18
Yeah. All right, Ron, do you got any closing? Oh, I don't know what's going on with I know what's what's going on with idle money. They what they're not gonna give us the money. Ron, what do you mean? Additional funds when anybody gets one digit?

Unknown Speaker 29:31
Not yet. But you know, you know, this VA you know how they are. They're just, they're just crossing their T's and dotting their eyes, making sure everything is in order. That's all okay. Well, can they cross them? Anyway, thank you for joining the let's talk with Lea Rhonda show today. It was great having you. Thank you, Ray for joining us today and asking us those questions and listeners. We hope that the answers to those questions helped you but if you need any further information, look us up. Oh yay. We're on Facebook and let's talk at Lee and Rhonda and we're on Instagram. So we're on all your social media channels you can look us up and send us a note.

Unknown Speaker 30:09
Have an amazing weekend. Have a great weekend Bye

Unknown Speaker 30:21
You have been listening to a paid program sponsored by Crawford management group and smart time consultants. Please be advised that the voices and opinions you heard do not necessarily represent the views of K u and v Las Vegas, the University of Nevada, Las Vegas or the Board of Regents of the Nevada System of Higher Education.

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