Start & Run an Internet Research Business. Gerhard W. Kautz

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СКАЧАТЬ Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible from business income, thus you can be taxed twice.

      3. Partnership

      A partnership is a business owned by two or more people. Legally, the owners are just as liable as the business itself. The partners, or owners, must also agree on a number of issues associated with the partnership. A partnership agreement should be drawn up with the aid of an attorney that details how these issues will be shared or resolved, such as the following:

      • How much money each partner will contribute to the partnership.

      • How much time each partner will contribute to the partnership.

      • How the profits will be shared.

      • How decisions will be made.

      • How disputes will be resolved.

      • How future partners will be admitted to the partnership.

      • What the procedure is to buy out partners.

      • What steps will be taken to dissolve the partnership when the time comes to do so.

      Advantages of a partnership include:

      • Partnerships are relatively easy to set up.

      • With more than one owner, the ability to raise funds may be increased.

      • The profits from the business flow directly through to the partners’ personal tax returns.

      • Prospective employees may be attracted to the business if given the incentive to become a partner.

      • The business usually will benefit from partners who have complementary skills.

      Disadvantages of a partnership include:

      • Partners are jointly and individually liable for the actions of the other partners.

      • Profits must be shared with others.

      • Disagreements can occur.

      4. Limited Liability Corporation (LLC)

      The LLC is a relatively new type of hybrid business structure in the USA, which is now permissible in most states. It provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. The owners are members, and the duration of the LLC is limited but can be changed. Formation of the LLC is more complex and formal than that of a general partnership.

      For more information about LLCs, see How to Form and Operate a Limited Liability Company, another book from Self-Counsel Press (for US readers).

      5. Sole Proprietorship

      Sole proprietorships are the simplest way to set up a business. In this case, the business is owned by one person, the sole proprietor, who owns all the assets of the business and any profits generated. This sole proprietor is also fully responsible for all debts and obligations related to the business. A creditor with a claim against a sole proprietor has a right against all of the owner’s assets, whether business or personal. This is known as unlimited liability. Registration requirements vary from state to state and province to province, but generally the process is relatively simple and inexpensive.

      Advantages of a sole proprietorship include:

      • It’s the easiest and least expensive form of ownership to organize.

      • Sole proprietors are in complete control of the business.

      • Sole proprietors receive all income generated by the business.

      • Profits from the business flow directly to the owner’s personal income tax return.

      • The business is easy to dissolve when the time comes to do so.

      Disadvantages of a sole proprietorship include:

      • Sole proprietors have unlimited liability and are legally responsible for all debts against the business. Their business and personal assets are at risk.

      • Raising funds may be a problem.

      6. Recommended Company Structure

      In the Internet research business you should not have too many concerns about being sued by a client. So the main advantage of a corporation, the limited liability, is not a factor for you. Also, the cost and effort of setting up a corporation is probably not worth it for your business.

      If you are thinking of going into business with someone else, you may want to investigate a partnership structure. But if it is just you, you definitely do not need to go through the process of setting up a partnership.

      This brings us to the sole proprietorship. As a one-person business, you should probably start with this structure. If your business grows, and you want to incorporate or team with somebody and create a partnership, you can do that later. But initially, the recommended business structure for your Internet research business is a sole proprietorship.

      5

      Pricing

      1. Price Quotations

      Pricing is a very important part of your Internet research business. It determines how much money you are going to make, and also affects how much business you will get. If you price yourself too high, you will get very little business, if any, and thus make little or no money. If you price yourself too low, you may have lots of business, but you could be making more money. So you have to establish a price for your services that is good for you. You might even want to set a price range, because you may decide to charge different clients different rates.

      Potential clients will always want to know the price of your services. In some cases you will quote an overall project price to them, and in other cases you will quote an hourly rate because you and the client do not know exactly how much work will be involved. Also, if you get annual contracts, the hourly rate will have to be stated in the contract. (For an annual contract you may want to give the client a lower rate than for a one-time project, and this is why you may want to consider establishing a price range.)

      2. Overhead Cost Factors

      The first thing you need to do to set your price rate is to work out your overhead costs. You probably will not get this right the first time, and you will probably change some numbers after you work out your first year’s expenses for your income tax. However, you have to come up with some estimates now because they will determine your pricing.

      Work out your overhead costs on an annual basis. Each person’s situation is a little different and costs will vary accordingly. The following list includes СКАЧАТЬ