[alienofwar]

Hi everyone,

I was hoping to recieve a little advice about starting a remodelling/renovations company. My dad has over 25 years in the business of various trades and I'm thinking it's about time he puts his broad knowledge towards making real money. I live in Nevada and I'm wondering what kind of legal steps do I need to take? such as licenses and bonding yourself and also, how should I get the word out?...because I'm relatively new to the area and I'm wondering whats the most effective way of getting attention. I know the beginning is always hard and it's important to build a good reputation.

My dad has been working cheap for building contractors and me and my brother are really interested in getting a business going for ourselves here.

Any advice would be greatly appreciated.

Thank you.

Jeremy

 

[Teetorbilt]

Start with the business archives, lots of good info there. Then run through the same in remodeling, everything is pretty well covered and it will help you get a feel for the board.
Come on back with any specific questions.
BTW, Welcome!

 

[Mike Finley]

Form a s-corp first off. For local legal issues, start researching the Nevada secretary of state web site and contractor licensing websites. Then start calling the local numbers and talk directly to those people to get all the details. That's the start.

 

[alienofwar]

Form a s-corp first off. For local legal issues, start researching the Nevada secretary of state web site and contractor licensing websites. Then start calling the local numbers and talk directly to those people to get all the details. That's the start.

Is a s-corp a sub-contracting corporation?

 

[Grumpy]

I actually just posted this elsewhere about an hour ago but it is totally relevant so here goes again:

I advertised to get my first jobs. I started advertising handy man type stuff for a few months just to get my foot int he door and develope a customer list. Soon after I stopped the handy man type stuff and I started advertising for what I wanted to do.

Before ALL that I sat down and made a game plan. Expense projections were a huge part of that plan. The other part of the plan was sitting down and developing a strategy by asking some common questions: who, what, where, when why?

Who will MY target customer be?
What will I offer to these customers?
Where does my target customer live? (I do mostly residential currently)
When will I hit major mile stone and how will I achieve those mile stones (goal setting)?
Why am I doing this? The short answer was because I thought I could do it better than I had seen it be done.

I developed a mission statement that wrapped those questions into one statement: The mission of Grumpy's Company is to position it's self as a leader within the roofing and siding industry for the Chicago metropolitan area by providing quality installations and first class customer service at pricing that is fair to both the customer and the company.

How did I convicne the customers to choose me? Salesmanship. This is my specialty. I'm never the cheapest.

The referrals were a hang up and I will admit I gave a few jobs away to a few customers who were insterested in lowest bidder and nothing else mattered. These people are not my target audience but they were an ends to justify the means. I basically bought my refrences with low prices on the first few jobs. Now... Now I am never the cheapest. Also I developed a referral list by doing the handy man thing for a short period of time. Refrences almost never even came up when selling those type jobs... it just wasn't an issue.

The biggest thing is plan plan plan plan and be a realist. Plan for the good and the bad. It took me well over a year from the day I first sat down and started to write my plan to the day that I actually began advertising and was open for business.

 

[Grumpy]

There are two types of corporations C and S corp. There are limitations to a S corp for example, limited owners (something like 200 recently raised from 150). The benefit is the issue of taxation. S corps are taxed differently than C corps.

Instead of blanketing your situation and suggesting you start an S corp I encourage you to do some research and decide what is right for your situation. I also encourage you to speak with an accountant.

 

[Mike Finley]

Is a s-corp a sub-contracting corporation?

An s-corp is simply a regular corporation or a c-corp that has been designated an s-corp for tax purposes with the IRS by filing a simple form with them. Unless you are going to be billing out a couple billion dollars a year and have actual stock holders and go public in the near future without getting into a bunch of details the s-corp fits 99.9% of just about anybodies needs.

The big thing is to incorporate your business. Without it you are the business and liable for everything financially.

These are all broad generalizations there are always exceptions to everything so please note that advice recieved on the internet is worth about what you pay for it. But now you have a start at least, do some more research talk to others and find your way.

 

[Daemonshal]

Not sure if I should post on this thread or create a new one. Obviously i made my choice. In my research, i found that the prices for the legal services involved in incorperating can run between 500-1000 dollars. The business my collegue and i intend to create could be considered a partnership, and i am trying my best to define where i want to go with it. Firstly, any advice on doing the legal and tax issues yourself as opposed to paying to have it done. Secondly, does anyone happen to know anyone in this business in a partnership instead of an S corp, and can give me a bit of perspective on the issue.

Thanks.

 

[Mike Finley]

An LLP - Limited Liability Partnership would be the least you should consider. However LLP suck the big one. Talk to an accountant and a lawyer for the details.

My advice to you and you can take it or leave it. Form an S-corp, with an unequal ownership of shares. 50/50 partnerships have a higher rate of failure than the divorce rate. Somebody needs to be the leader and guide the business through the lows and highs. Business by committee is a recipe for disaster. Make sure you plan for the failure of the partnership right from the beginning. A good lawyer will insist you draw up an agreement upon how to value and divide the company right from day one so if you ever have to go your separate ways all you do is pull out this document and do the math.

You won't hear this advice given by many, but of course that could mean my advice is either hair-brained or genius. You'll have to decide for yourself.

 

[sage]

An LLP - Limited Liability Partnership would be the least you should consider. However LLP suck the big one. Talk to an accountant and a lawyer for the details.

My advice to you and you can take it or leave it. Form an S-corp, with an unequal ownership of shares. 50/50 partnerships have a higher rate of failure than the divorce rate. Somebody needs to be the leader and guide the business through the lows and highs. Business by committee is a recipe for disaster. Make sure you plan for the failure of the partnership right from the beginning. A good lawyer will insist you draw up an agreement upon how to value and divide the company right from day one so if you ever have to go your separate ways all you do is pull out this document and do the math.

You won't hear this advice given by many, but of course that could mean my advice is either hair-brained or genius. You'll have to decide for yourself.

Testify Brother! Amen. (Not to be redundant but) Went through the whole partner thing, in a corp. No LLP. Make sure you and your partner clearly define your roles, ownership, and what is to happen if you divorce so to speak. After you have answers to all the questions of what happens if we get big, go bust, or split get a competent lawyer to draw up a contract that you both clearly understand. Lay it out on the table, every scenario you can think of and GET IT IN WRITING! And IMH experienced O there needs to be a controlling partner, even 51:49, and clear guidelines as to who has say over what (what's your/their role).
I had to fire my partner, we took the steps written above prior to entering the venture. We are no longer in biz together, but we are still great friends.
I'm sure I missed a lot but you get the Idea.

 

[realpurty2]

Firstly, any advice on doing the legal and tax issues yourself as opposed to paying to have it done. Secondly, does anyone happen to know anyone in this business in a partnership instead of an S corp, and can give me a bit of perspective on the issue.

Thanks.

Daemonshal, We are a partnership. We opened as a partnership and have been successfully operating as a partnership for years. Now that the business has proven itself to be worthwhile, we are looking to incorporate very soon. My point is that while incorporation does have it's benefits, it is not mandatory at start up. It is a costly venture for a brand new start up venture. Give yourself time to determine if you can establish a viable business before incorporating. There are alot of resources online to determine the best corp for your business. Usually LLC for smaller ventures is more than sufficient and easier to accomplish.

The major benefits of incorporating are primarily taxes, credit and liabilities. To operate as a partnership, you will file business taxes using a 1065 form for the business and then any profits you personally made would be carried over to your personal 1040 on a Schedule C for self employment income.

As a partnership, you must agree on every decision, especially those involving credit. Establishing new lines of credit as a partnership will require a personal guarantee from all partners. If the business fails to pay it's debts, creditors will seek payment from the partners. As a corporation, no personal guarantees are required (except from creditors who require it independently)

Liability is the biggest advantage of incorporating (in my opinion that is) because as a partnership, if the business is sued, so are the partners. Personal assets are at risk for sole proprietorships, partnerships, and a portion of them for LLC's. (Limited Liability Corp) S or C corps are stand alone in liability. Temporary solution until the business can afford to incorporate.. Good insurance... get it, don't work a day without it.



I'll be happy to give you more detailed info if you like, email me, pm me or however.

 

[Mike Finley]

Daemonshal, why would anybody with as much advance information as yourself ever recommend to somebody to wing it? Insurance will not protect you.