Small business owners, please step in here

[Kingsoverqueens 10]

To incorporate you actually become an employee oc the inc, the inc gets taxed and you, as an employee, get taxed again. 

A "C" Corp filing results in a double taxation expsoure on the profits of the company.

 

An "S" Corp filing passes the profit of the company to the shareholder as earned income.  No double bite.

[Kingsoverqueens 10]

To the OP, have you considered small chunks of money rather than large?

 

When I bought out my original business, I went to everyone I knew to raise the cash, and wound up offering a generous rate of interest on a small loan (5K) paid over 5 years.  The interest was better than what the banks were paying and the investment was fairly low risk.  It worked for me. 

[maintenanceguy 510]

Remember that your taxes change - whether you're a corp or a sole proprietor. 

 

When you're on your own, you pay your own taxes plus the employer's portion of your taxes.  I get angry every quarter when I write a check to the government for 46% of the money I worked for.   You'll soon understand why the economy is in such bad shape - the burden placed on people who create jobs is so large that most either never start or have to stop.   The government will be the biggest threat to your success.

[siderman 1,137]

Remember that your taxes change - whether you're a corp or a sole proprietor. 

 

When you're on your own, you pay your own taxes plus the employer's portion of your taxes.  I get angry every quarter when I write a check to the government for 46% of the money I worked for.   You'll soon understand why the economy is in such bad shape - the burden placed on people who create jobs is so large that most either never start or have to stop.   The government will be the biggest threat to your success.

And all the ins. on top of that. Got tired of all the pocket picking and escalating costs a few yrs ago. Was good for 30+yrs i guess my patience and pockets wore out with age...but a sincere good luck to OP and all the other new ventures going on. 

[Hailskins 0]

We have another meeting with the attorney next week and will probably do LLC but that is up for discussion and we may go Inc.  The licensing for a brewery is definitely a pain in the ass!  I think we could go smaller initially - hell that might be our only option.  We can always expand down the line when business is booming.  

Private money is a good way to go except that many investors would want an equity position in the company.  I already have two partners and don't really want more!  Maybe I should go on Shark Tank haha.  

Kings - the problem with "small chunks" of funding for this particular business is that there has to be an initial outlay for equipment or else we can't brew!  If we can overcome that hurdle I like our chances.  

[mikeyjones 88]

We have another meeting with the attorney next week and will probably do LLC but that is up for discussion and we may go Inc.  The licensing for a brewery is definitely a pain in the ass!  I think we could go smaller initially - hell that might be our only option.  We can always expand down the line when business is booming.  

Private money is a good way to go except that many investors would want an equity position in the company.  I already have two partners and don't really want more!  Maybe I should go on Shark Tank haha.  

Kings - the problem with "small chunks" of funding for this particular business is that there has to be an initial outlay for equipment or else we can't brew!  If we can overcome that hurdle I like our chances.  

 

To reiterate what's been mentioned already. An S corp / LLC will pass through the income to the owners so you can write off the losses on your own taxes (or pay taxes on the gains). 

 

However, there are restrictions with such entities in terms of access to capital, etc.  What you can do is start off as a S-corp and refile later to become a C-corp once the business is making money.

[Newtonian 453]

Ever the naysayer: It sounds to me like you're starting out too big. $750k is an awful lot of money. Today's business climate is risky. I hope you're in a city because walk-in business will be essential for a boutique booze establishment. It's also a good idea to have relationships with local restaurants to offer your brews. 

[WP22 1,558]

Remember that your taxes change - whether you're a corp or a sole proprietor. 

 

When you're on your own, you pay your own taxes plus the employer's portion of your taxes.  I get angry every quarter when I write a check to the government for 46% of the money I worked for.   You'll soon understand why the economy is in such bad shape - the burden placed on people who create jobs is so large that most either never start or have to stop.   The government will be the biggest threat to your success.

 

And to rub a little more salt in it, since the op is talking about Essex county, should the op open his business in Newark, he'll pay an extra 1% payroll tax to the city.

[maintenanceguy 510]

And to rub a little more salt in it, since the op is talking about Essex county, should the op open his business in Newark, he'll pay an extra 1% payroll tax to the city.

 

Plus all the hours and administrative costs of doing all of the government's accounting work for them.  For a small successful business, easily half the profits are eaten up by government taxes, fees, and complying with regulations.  That's not the super rich making millions each year. That's your local electrician, plumber, and dry cleaner who works 70 hours a week and often ends up with less per hour than he would have made if he just had a regular job.

[Maksim 1,504]

Full biz plan, including what makes you think you will succeed.

 

Personal guarantees, pretty much a must.

 

3 years worth of cash reserves.

 

Flip the scenario around. Someone comes to you asking for almost a million dollars, what do you need to see?

 

In reality, if it is a defendable idea, and you have tangible experience to make it a success, your best bet is to raise money friends and family, along with crowd funding (before the market dries up).

 

Sent from my BlackBerry PRIV, the most secure Android device via Tapatalk.

 

 

[jeff47 30]

Op, I don't know how familiar you are with the business but breweries are regularly upgrading the size of their brewhouse's and getting rid of their old ones. Keep an eye out for used (or failed breweries) brewhouse's, tanks, chillers etc as that's a huge startup cost. Kegs are also extremely expensive and a canning line is major expense. Since NJ finally changed their stupid laws small breweries are opening up and really just going the taproom route. You could also do growlers. The distribution of growlers is almost impossible (each label will need to be registered with ATF) but this would give you an easy carry out option. Be wary working with bars, they can be a real PITA and they may force you to pay for taps. Its illegal but it happens. I'm guessing you're going to start with Ales to increase capacity by reducing tank time?

 

Good luck, brewing good beer will help your chance of success immensely.