Setting Up Business - Requesting Advice

So...I went through all my reptile receipts from 2008. After looking at the total year expenditure, I think it's time to talk to an accountant and examine how best to set up small business...since I plan on having my reptiles for quite some time, and hopefully will have a few offspring to sell this year. Of course, and more acquisitions to come.

I'd like some thoughts from folks who have some experience with the business end. Specifically how the business itself is structured and most importantly, the critical start-up steps that need to be taken.

It would be nice to write off some of these expenses, money which I'm going to spend anyway :-)

Please PM or email me with any advice or input. icatsme@mac.com

Thanks ever so much!

Is breeding snakes a hobby or a business venture for you? Writing off expenses sometimes is not worth the 15-25% taxes they take from you.

Chris

i would urge you to look into the livestock laws in your state and also if exotics are covered under those. alot of breeders typically are run like farms

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Originally Posted by Clear

Is breeding snakes a hobby or a business venture for you? Writing off expenses sometimes is not worth the 15-25% taxes they take from you.

Chris

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Agreed.

As a hobby you can write off what you make with the expenses for that year. As a business you have to pay into social security and other minimum tax stuff as well as save records and be subject to an audit. if you dont make a living at it, it may not be worth it.

My advice, fly under the radar.

id like to add that being a business also requires you to do sales tax. where a farming there of allows for alot but doesnt require as much as what a retail business would entail. either way neither would get you factory direct pricing on anything, but if you bought enough at one time it could

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Originally Posted by West Coast Jungle

Agreed.

As a hobby you can write off what you make with the expenses for that year. As a business you have to pay into social security and other minimum tax stuff as well as save records and be subject to an audit. if you dont make a living at it, it may not be worth it.

My advice, fly under the radar.

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It's come to my attention that some may have misconstrued my meaning when I said, "under the radar" as hiding income from the government.

That was not my intention whatsoever.

Whenever one has concerns about taxes one should speak to a CPA.
That is what I have done. I have my own business, not breeding snakes, and my accountant has told me my snake hobby is just that a hobby and not subject to the same tax scrutiny as my real business. Just like if I made cupcakes for a bake sale or had a garage sale, these are obviously not businesses.

My comment "flying under the radar" meant keep it as a hobby, which it is until the time it is becomes an an actual business, thus on the radar. In other words dont classify it as something it is not.

I am in no way an accountant but do pay one and thought I would share some advice that was given to me.

Now back to our regularly scheduled programing:)

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Originally Posted by West Coast Jungle

Agreed.

As a hobby you can write off what you make with the expenses for that year.

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Can you explain this part a little more in detail? Like an example? Thanks!

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Originally Posted by iCandiBallPythons

Can you explain this part a little more in detail? Like an example? Thanks!

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If you spent $5,000 on your hobby the most you can write off is $5,000 against $5,000 of sales so basically its a wash. You can never show a loss, thus no tax advantage. Ends up being a big 0 on your return and not really changing much. Thats why hobbies are not under the scrutiny of a business.

A business is different, even if your business is negative(showing a loss) you still owe a minimum business/self employment tax, have to pay into social security and be responsible for keeping accounting records for several years because you could be subject to an audit.

This is not the case with a hobby so why would you call your hobby a business.

Now once again I am not an accountant.

So please dont do your taxes based on some thread you read on the internet. Everyones tax situation is different. There are sole proprietors, partnerships, LLC's and many other variables, business taxes are way more complicated than I could ever explain and I am no expert. I am just going by what I have been told by my accountant/tax preparer from my particular situation.

Please refer to a CPA when preparing you income taxes, making any investment or business decision.:)

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Go talk to an accountant and don't listen to advice given on a forum. You can take a loss on your personal taxes from a loss in your business.

This is the wrong place to seek such advice. Talking to an accountant and the advice given would be well worth the fee for the hour.

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Originally Posted by Rudd

Go talk to an accountant and don't listen to advice given on a forum. You can take a loss on your personal taxes from a loss in your business.

This is the wrong place to seek such advice. Talking to an accountant and the advice given would be well worth the fee for the hour.

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I completely disagree with you. Why not come to a forum that is littered with breeders who are running a business successfully and pick their brain?

Maybe someone has shed some light on a topic which the OP may have overlooked....I have already seen one example in this thread.

We are here to help....please dont tell the posters what advice to take, and not to take. In the end, it is up to the OP whether or not they want to take the advice of an individual.

If you TAKE the advice given you will be mislead. The advice given so far has been completely wrong with the exception of "go see an accountant". Seeking the advice and getting feedback is one thing but to take the advice (application of advice) would a bad idea.

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Originally Posted by Rudd

If you TAKE the advice given you will be mislead. The advice given so far has been completely wrong with the exception of "go see an accountant". Seeking the advice and getting feedback is one thing but to take the advice (application of advice) would a bad idea.

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Are you an accountant?

Are you looking for my resume? I would bet I am more qualified than most here, however, I said GO TO AN ACCOUNTANT for advice rather than TAKE the advice of people on this board.

This question is so dependent on the individuals situation that none of us could come close to giving him the proper advice unless we knew more information and had specialized knowledge of the accounting world.

The two best friends you should have in your life if you are a business owner are your Accountant and you Attorney. Don't underestimate their relationship.

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Originally Posted by Rudd

Are you looking for my resume? I would bet I am more qualified than most here, however, I said GO TO AN ACCOUNTANT for advice rather than TAKE the advice of people on this board.

This question is so dependent on the individuals situation that none of us could come close to giving him the proper advice unless we knew more information and had specialized knowledge of the accounting world.

The two best friends you should have in your life if you are a business owner are your Accountant and you Attorney. Don't underestimate their relationship.

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....just trying to figure out what your source is? How do you know if all the advice that has been given is wrong if you are not an accountant yourself? How can you sit here and say everyone giving advice is wrong and to take your advice when you are just another poster?

Who is to say some of the breeders aren't more knowledgeable when it comes to running a reptile business than an accountant (also human)? I know myself, I had to explain my situation/plans to an accountant last year about starting a business. He was not very familiar with a reptile/breeder business (as I assume accountants arent approached by us(breeders) on a daily basis)...in short, deal got done.

But I got a lot of help from these boards on what kind of business' to run by members giving examples of different types of breeders whom I could relate with. This help allowed me to move forward with the accountant.

BTW...my accountant and attorney are NOT my best friends...there are people on this board I would rather offer a ride to before offering a ride to my accountant or attorney. :rolleyes:

I didn't say everyone on this board was wrong.

I said don't TAKE the advice of those on this board other than "go see an accountant". The question asked was basic in its nature (setting up the business) and with a little research from the accountant he/she would be able to answer the more techincal questions relating to the accounting aspect of the business.

I believe these boards are great for people to get "ideas" from but not to TAKE advice (business related).

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Originally Posted by Rudd

I didn't say everyone on this board was wrong.

I said don't TAKE the advice of those on this board other than "go see an accountant". The question asked was basic in its nature (setting up the business) and with a little research from the accountant he/she would be able to answer the more techincal questions relating to the accounting aspect of the business.

I believe these boards are great for people to get "ideas" from but not to TAKE advice (business related).

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Boards like this is the best place for advice because so many people have already started the business in the reptile world. Yes once you have done your homework next step is to find a good accountant and lawyer. Please if you are going to respond, give advice and not dog everyone else for giving input that they have already been through.

In business world, always talk to business owners to get full ideas THEN go see an accountant and lawyer.

Clear, I did give advice. I will give it again "don't TAKE the advice of those on this board other than "go see an accountant"." Just because it is in opposition of most others comments doesn't mean I am "dogging" them. If I were to "dog" them I would point out the inaccuracies and make comments about the validity.

Opinions/ideas and advice are two different things. Some have made recommendations or given information that is completely inaccurate. These boards are NOT the best place for business advice (keep it in perspective of our accounting discussion).

rudd care to say what you think is improper advise? i surely like to see what kinda business you have run and hear about how you went about it.

Nixer, the only advice I think is viable is to seek an accountant's opinion. The choice of your business structure depends on many variables, all of which are too comprehensive to cover here. However, the biggest choice most small businesses file for is an S-Corp (apart from a sole propietorship) with the current trend going towards LLC's.

Some of the information given here has been very limited, generalized or flat out wrong (ie, LLC because there is less paper work, losses don't pass through). Even though some of the information is accurate it does not justify why someone should make certain decisions.

Tax implications, liability, share holders, annual meetings, access to cash, earnings (amount and what to do with), how much structure do you want to deal with, profits/losses, size of business, managing executives, investors are all considerations (there are many more) of which structure you should choose.

The people best suited to make these decisions are you and your accountant, not other business people, forum members or even some professor teaching accounting. Go with the pro, the guy/gal who does this for a living day in and day out, the specialist.

As for my qualifications, I own a couple of small businesses, have a Masters in Business, married to an accountant and before owning my own businesses was running the financial and operations side of two multi-million dollar companies.

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Originally Posted by Rudd

Nixer, the only advice I think is viable is to seek an accountant's opinion. The choice of your business structure depends on many variables, all of which are too comprehensive to cover here. However, the biggest choice most small businesses file for is an S-Corp (apart from a sole propietorship) with the current trend going towards LLC's.

Some of the information given here has been very limited, generalized or flat out wrong (ie, LLC because there is less paper work, losses don't pass through). Even though some of the information is accurate it does not justify why someone should make certain decisions.

Tax implications, liability, share holders, annual meetings, access to cash, earnings (amount and what to do with), how much structure do you want to deal with, profits/losses, size of business, managing executives, investors are all considerations (there are many more) of which structure you should choose.

The people best suited to make these decisions are you and your accountant, not other business people, forum members or even some professor teaching accounting. Go with the pro, the guy/gal who does this for a living day in and day out, the specialist.

As for my qualifications, I own a couple of small businesses, have a Masters in Business, married to an accountant and before owning my own businesses was running the financial and operations side of two multi-million dollar companies.

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which is also why some ppl have only went sole proprietership is to keep it simple but hence my post. every business type can add or take away from taxes and/or writeoffs. also you best note before you start saying everyone is misinformed that every state is not the same when it comes to businesses.

as for structure thats something you should talk with an accountant and a business lawyer. i did so many many years ago and they are changing laws as they go here and im sure everywhere else.

the reason why i initially posted about the farm type is due to the fact that it allows from stud fees, breeder writeoffs and alot of cost basis in keep of this type of animals.

OK fellas. It seems to me that very valid points on each side of the table have been made - Lets not let things get too far beyond "discussion".

Thank you :)

Hi Rudd, you have valid points but you forgot one thing... the OP already said, "it's time to see an accountant". So, that part is a given. But, Jerhart has a valid point as well that advice from experienced breeders are valuable when talking to said accountant - so the OP can float to the accountant (who may not be familiar with reptile breeding) some of these ideas to see how it can all work out with the OP's situation. It is always good to come to the accountant with some information already (like, possible types of business structures) so that the ideas are coming from both sides of the desk. I wouldn't have known to float the farm-type structure idea and the accountant may not even think of it as well. This just gives you more ideas to consider.

There's a reason we go to these forums and that is, to get some specialized information on reptiles - husbandry, breeding, etc, from those "in the same boat". Any advice you get from the internet, friends, family, anybody, is always just that - ADVICE. It is up to the person seeking such advice to weigh the validity of the advice given and see how it can help in his situation. Telling the OP not to take such advice is an insolence to both the OPs intelligence and the intelligence of the forum members.

Just my 2 cents. Off the podium now...