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O.T. need help/advise/constacts for new company startup

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Old 03-19-2002, 09:45 AM
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Quote:
Originally posted by Rambunctious
[B]Thank you for all the replies, keep them coming.

1) when you purchase equipment, can you treat that whole cost as an expense for the year you bought it, or do you HAVE to depreciate over time. this is basic accounting I know (I'm only an engineer)
Well, I can cover the first one for you. All new business startup costs must be depreciated. Once you are actually in business, then your accountant can help you with what has to be depreciated vs expensed in current year. You need to talk to a tax accountant about the second.

Here's a tip. Many of the MBA programs now have candidates do real world business plans instead of a thesis. This may be free or of little cost to you. Contact Keller Graduate School in your area and ask for the MBA Capstone Project professor. I went through that program and the small company that I did the plan for a couple years ago is doing about $1mill in revenue now.
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Old 03-19-2002, 10:02 AM
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mach1shorty.

thanks for the idea. a great one!!! I will look into the help. how about you help us write our business plan. I like the $1 MM revenue figure.
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Old 03-19-2002, 10:44 AM
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I'd be happy to help, but my company frowns on extra curricular work. It gives them the impression I don't have enough to do. You'd be better off with someone local anyway.
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Old 03-19-2002, 01:58 PM
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Ram-b,
Hey, just read this AFTER I emailed you. I'll get with you on the phone But I did want to address the dep. issues.

Yes, consult an accountant always. But I do know you can take some in the tax year. There are guidelines, and the limit was like $17,000 I think, but we usually take computers, etc. in the same tax year if we don't go over the max. Computers are outdated in about 12 months anyway, so some of the rules are what I'd call outdated. Check with a "professional' though.

You also probably have a local Small Business Association office or group.

I'm not sure what you're developing, but a device to get 25 mpg out of a big block marine engine would sell "fairly well" I'd gather. LOL!

Mark
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Old 03-19-2002, 02:35 PM
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Quote:
Originally posted by Audiofn
Yes you can sell to the public on line retail and also sell to wholesalers. Just make sure that your prices are not so low that you do not leave the retailer room for profit. Bose Speakers does this very succesfully. (oh man did I just say Bose does something good? May God strike me down with lightning!!!!)
Jon
Jon, keep in mind, not all industries and/or companies operate in the same manner I emailed Ramb the exact opposite advice. Just like in your industry, you won't be able to create a website and sell B&K receivers to me online without their permission which would likely be difficult to get, as far as I know you can't advertise pricing, etc. online or they yank you. I have to walk into a store to get one "legally" so to speak. Now, Summit can sell Edelbrock online, but you can't buy edelbrock on their own website (they will tell you where to buy). (using a website as "retail" example) And Summit does buy direct (under their wholesale company name). The WD's in AA are actually the ones doing the retail and wholesale limbo game.

In your industry, many programs are set up to protect the retail stores that demo product, in the AA industry, much is setup to protect WD's and their ability to provide jobbers with product, which in turn protects the "small guys" with stores, speed shops, etc. That's the lifeblood of the industry. Not only product, but knowledgeable advice. The AA industry is different from the CE indsutry, as is every other I'm aware of, but many of the "goals" are the same.

And each industry can be in it's different stages. We're experiencing some "evolution" with our manufacturers. They're raising "buy in " orders, and not extending accounts to every Tom Dick & Harry. Things change over time with the growth of industry.

Anyway, just putting another perspective on things What Bose does is a lot of f-in work, too....I think they'd be better off improving product, new product development than answering phones from Paul Harvey ads and shipping speakers. LOL!

Mark
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Old 03-19-2002, 02:42 PM
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You are referring to IRS section 179, which allows businesses to expense upto $17,000 (May be even higher now, I'm not an accountant) a year of otherwise depreciable assits. If it is a vechile, it needs to be over 6000lb GVWR. Therefore, not a passagner car. Keep in mind, when you sell the asset, any money from the sale of the asset that was expensed is considered revenue.

If you are using a building on your primary residence for the business, there is a little known tax advantage you should investigate. It was established for farmers, but works for any business that can justify why a "live aboard" employee is a sound business decision. The business (a c corp) owns the house, and provides free housing to the employee in exchage for the employee living on the businesses grounds. The employee does not have to report housing as income, and the business gets to take housing expenses as a business deduction. Down side is when the property is sold, any appreapiation is the businesses, and not excempt under the 250,000/500,000 maried couple primary residence clause. Of course, your tax advisor should have some suggestions on this.

Re: Business plans. I am not in favor of hiring a firm or an MBA class to do this. (No offense intended. I've got MBAs, and did these in my capstone class also, but it isn't the same as the founders doing it). You're engineers, so let's put this in engineer speek: When you go to get ISO certified, you can hire a consultant to record excatly what you already do, write procedures, and generate the pretty paperwork to satisfy the registar. Or, you can hire a consultant to help you look hard at each process, clean it up and streamline it, write the new process as a procedure, and not only get you the documents, but inprove your processes at the same time. When you write a plan the right way, it is very thought provoking, and should help you to design a business that is better than if you just jumped in and start swiming. (You can over plan, but you can under plan too. and hiring others to do the whole business plan is underplanning.)

One last thing to this novel: Many CPA's are not "tax managers." Many focus on records and reporting, but not as much on tax planning. I know it is delicate when a mother is involved, and right now you have more important issues, but at some point you should look hard at how well your tax advisor is helping you to legally advoid taxes.

Good Luck.
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Old 03-19-2002, 03:03 PM
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Hi Rambunctious!

Sounds like you have some excitement ahead of ya! I wanted to throw my two pennies in, and would have e mailed, but didn't have an addy.

I know of an excellent company that's pretty much "local" to you (they're in GR). Their work is wonderful and they don't scalp you pricewise. I did quite a bit of cooperative work with their company when I lived in GR (our companies did sort of parallel things and so often we worked together). Not to mention their reputation for intregrity.

They've donerofessional sports teams,chemical companies, radio stations- even some Italian chocolatier(and a very scary "soap selling" *we are not a pyramid* company LOL

Drop me an email if you want the name and stuff. I've worked with him on an emormous project where iron clad non-disclosures were in place, which it sounds like you may need.

[email protected]

If nuthin else he can give you a realistic ballpark figure for what kind of $$$ you will be looking at to get it done. Hopefully he won't double the fee if you mention my name.

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Old 03-19-2002, 03:22 PM
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thanks Melissa. I will email you about the patent stuff. it isn't that i don't trust anyone, (I'm an engineer, I trust everyone) it is just that i don't want the patent office/law firm to say the claim is invalid because of public disclosure.

32fever, if you sent an email. i did not receive it.

FYI the email feature doesn't seem to be working so........
[email protected]
if anyone has anything to send.

this input is great!!.
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Old 03-19-2002, 04:08 PM
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Yea, Yea, Yea. Ok so what is it? You've teased us enough. You are an engineer in the product development of car parts, so is

this a product which crosses over to marine?
How much will it cost?
Do I buy it only once or on a regular basis?
Can I hold it to use or is it for an engine?
Can I share it?
What will it do for me?
Does it have to do with exhaust and mufflering?
Why will I want it and be willing to pay for it?
Is it original or is it an extension of something existing?
Are you splashing something?(current hot topic)

Do we have to wait until 'April 1st' for it's unvailing?

Some fields use a pricing structure;
.....manufacture at cost $X,
.....sell to wholesale at $2X, manufacture doubles his cost,
...........who sells it retail at $4x, wholesaler doubles his cost,
...........who sell it to dealers for 20-30% off retail depending on volume.

i.e. $100(cost)--$200(wholesale)--$400(retail)--$280-320(dealer).
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Old 03-19-2002, 06:15 PM
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Cobra Marty.
I don't want to ignore your inquiry but I can't disclose the product yet, as mentioned above ONLY for patentability.
maybe this reply is worse
but.....
It won't make your boat go faster or sound louder, sorry. That's my other idea, one at a time.....

Some will say "whatever" but others will say..."hey cool, i need one of them......good price...good design.....useful... I'll take one"

believe me, I'm chomping at the bitt.....want to know what people think. meeting with the patent lawyer this week to get past the patent stuff. Thanks for the interest. It makes the effort and "lately obsession" worth it


Rob
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