Tag: Starting a Business

How the IRS Knows You are Operating a Hobby, Not a Business.

There are many business opportunities to earn extra income or full-time income.  Many will turn to a direct sales or networking marketing opportunity.

The direct sales and networking marketing industry is a popular option for many because it allows for low overhead and a high-income opportunity, if and only if you run it as a business.

IRS collection powers

That part is a challenge for most and, many times, the difference between success and failure.

Now, the key is NOT your definition of what running a business entails, but what the IRS says about it.

The IRS had a $300 BILLION tax gap.

They know there are suspicious activities for which individuals will start a “business” where really it was a way where expenses that were incurred could be written off as a loss against earned income… (not a real business, just a way to justify the money you would have spent anyways so now you want to turn it into a tax write off).

On the list of IRS, suspicious activities include:

  • Fishing
  • Horse Racing
  • Entertaining
  • Photography
  • Direct Sales/Network Marketing

Why is direct sales/network marketing on the list? The IRS knows the pattern for this industry and why 95% are really running a hobby and not a REAL business:

  1. No accounting records from the start of the business, including a budget, profit, and loss, cash flow…An accounting program like QuickBooks® can do all of this for you and more.

    You can manage your personal budget and finances or other businesses all in one place. A real business will want to know where they are from month one (even with no sales).

  2. No 5-year business plan. Do people complete business plans for hobbies? No. They enjoy the hobby and, based upon their personal budget, decide how much money they can spend on the hobby, sometimes it is more, and sometimes it is less.

    But there are no revenue projections because they do not expect to either make a lot of money or any from the hobby. A real business will have a business plan with 5-year projections (even if you do not have any idea, it forces you to put numbers to a plan).

  3. “Let’s wait and see if we make any money first” or “Let’s try it first.” This language says to the IRS, ‘I am not planning to run this as a real business, I am not willing to set it up as a real business, I am really going to operate it as a hobby (the other option) and if, and only if, I see that I am making money, then I will do the other parts necessary to operate as a business.’

As you know, 95% of small business owners fail within 10 years, 50% or more the first year, and this mindset “attitude” is the #1 reason for these sobering statistics.

It is like saying, I am planning to fail, but if I get lucky and it “really works,” then I will do the other things I am supposed to do…It does NOT work this way, and the IRS knows it.

Your Solution:

  1. Run your business as a business starting today.
  2. Get a tax and bookkeeping program, get the training to set up your books properly (and go back and enter the numbers if you started 5-6 months ago) to see what has really happened up until this point.
  3. Develop a 5-year business plan moving forward with projections.
  4. Develop a comprehensive budget for both you and the business.
  5. Make a real decision that you will run this as a business and do whatever it takes to succeed!
  6. Stop operating as a sole proprietorship (make 2020 the last year you file a Schedule C -300% more likely to be audited). Your goal is to get off that track ASAP.
  7. Form a separate legal entity for your business.
  8. Separate your personal and business credit.
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How to Accelerate Your Profits and Performance

Today, is our next Top 5% Club monthly membership call on Tuesday, February 8th at 4 pm PST (7 PM EST) for an experience of true leverage to grow your business! I will interview Spike Humer, the CEO and Founder of Spike Humer International.
Spike is widely becoming recognized around the world as THE leading expert in engineering entrepreneurial success stories.
A master at exploding the profit and performance levels of companies, organizations, and individuals, Spike has generated tens of millions of dollars in new revenue for and with his clients.
Spike has transformed the financial and personal futures for audiences as large as 5,000 people throughout the world. He has personally worked with people and companies in over twenty-five countries in literally hundreds of industries and markets.
He is the developer of “The 10 Day Turnaround” technologies for business and life and is co-author of the book “The 10 Day Turnaround for Business”.
Spike has shared the speaking stage with some of the biggest names in business and personal achievement. He has been the “man behind the magic” of some of the most successful on-line product and program joint ventures of the last decade.
Click here now to register for this powerful
Top 5% Club Preview Teleseminar

You will have been personally invited to attend a preview
of one of our powerful monthly teleseminars to grow your business.

This is part of our Top 5% Club membership
(go to http://budurl.com/Top5PercentPreview
for more details to subscribe to this program).
When you become an active member you will receive the CD and transcripts of the call plus other tools to grow your business and protect your assets).
During the challenges we face in our economy, you must learn these strategies to accelerate your profits to take your company to the next level!
Today, February 8th, you will learn these business strategies to accelerate your profits and performance!
ü The three essential questions you MUST ask before making any decision or taking any action to ensure maximum success.
ü A simple four step process to instantly accelerate the performance of your business and increase your long-term profits.
ü How to gain more clarity, get more confidence, and create more certainty in virtually any situation.
ü How to assess any situation, opportunity, or activity to generate the most positive leverage possible.
ü Discover the Four “C’s” of strategic leadership.
ü Dispel the “myth” of time-management and learn to get maximum from your focus, attention, and resources now.
ü Uncover the epidemic disorder affecting every business owner, entrepreneur, and start up in the world and how to cure it once and for all.
It’s this simple:  If you are looking to accelerate your profits and performance, you MUST be on this call!
Click here now to register for this
powerful Top 5% Club Preview Teleseminar

Guest: Spike Humber, CEO of Spike Humer International, LLC an entrepreneurial business growth expert and profit-enhancement consultant.
Host: Scott Letourneau, CEO of Nevada Corporate Planners, Inc. You will learn from Scott’s diverse expertise and his comprehensive and ever-growing list of powerful business resources.  These are the very elements that have allowed his 5,500+ clients, both domestic and abroad, to incorporate their business with confidence, “propelling their business on a fast track to profits!”
Scott has a BA in Finance and is the author of “The Insiders Guide to Incorporating Your Business and Protecting Your Assets!” He is also a contributing author for the new book from Entrepreneur Magazine’s Startup series; “Start Your Own Information Marketing Business – Your Step-by-Step Guide to Success.”
Register Today for this Powerful Teleseminar On Tuesday February 8th at 4 pm PST/7 pm EST and Discover How to Accelerate Your Profits and Performance!
Dedicated to Your Success,
Scott Letourneau
E-mail: ncp@nvinc.com
Nevada Corporate Planners, Inc.
Fast Start to Profits™!
7477 W. Lake Mead Blvd. Ste. 170
Las Vegas, NV 89128
(888)627-7007; (702)367-7373 Ext. 1103
Fax: 702-220-6444

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Get Your Business Off to a Fast Start to Profits™

Are you ready to take your business to the next level in 2011 with the #1 marketing strategy in the world?
The one that give you the most leverage at the lowest cost to you?
Go to www.budurl.com/masterJVs for FULL details and to Register Today and save big $$ when you register before December 31st
Join me and my team of trainers and coaches for three business
life-changing days in Las Vegas as we mentor you in the most powerful marketing strategy to put massive profits in your business…yet one that 99% of stressed, struggling entrepreneurs do not use effectively, if at all.
The good news is that the time is ripe for you to Master True
Leverage for Maximum Profits™ for your business. The method is yours for the taking! Invest a bit of your time in this phenomenal hands-on “boot camp” event, and you can capture forever a workable,
streamlined system for the most powerful marketing tool in existence today — joint ventures!
Join Scott Letourneau, January 28-30, 2011 in Las Vegas, Nevada for THE ULTIMATE JOINT VENTURE BOOT CAMP- Master True Leverage for Maximum Profits™!

Go to www.budurl.com/masterJVs for FULL details and to Register Today and save big $$ when you register before December 31st
You will learn these strategies and more to massively grow your business in 2011 and beyond!
• Why joint ventures can be your ticket to unlimited capital and
• How joint ventures can help your business grow in any economy!
• The three near fatal mistakes businesses and individuals most
often make in attempting to do a joint venture and how to avoid them!
• Learn the JV mindset that will empower you to do more JV’s than you ever thought possible!
• Discover the secret to taking all your JV’s to the max and turn
them into deals you never thought possible!
• Get the specific set of modeled presuppositions that will make
doing JV’s easy and natural to do!
• How to leverage the power of referrals in your business and the
hidden secret that most are not doing effectively both on and offline!
• The best sequence of events and approach to dramatically leverage technology to achieve your goals. Not having the correct sequence is like baking a cake and putting the yeast in after the cake comes out of oven. Most of you are doing that with your business today, therefore the results or lack of them, speak for themselves.
• 5 Steps to Create Interest and Attract Business to You!
• How to Generate More Good Sales Leads Than You Ever Have Before!
• How to Double and Even Triple Lead Conversion Percentages in Today’s Market!
• How to get crystal clear about what your joint venture should do for you?
• When does a joint venture actually make money?
• Which joint venture partners MAKE money?
• Which joint venture partners LOSE money?
Plus when you register today you will receive these powerful bonuses:

Register Your Seat Today and You’ll Receive Every Single One of the Bonuses Below.  Remember…This is a Limited Time Offer!

1.    Two “Outcome Sessions” teleseminars to help you get clear about your goals and objectives $495.00
before AND after the JV Boot Camp with turnaround specialist Spike Humer! You will receive
access to both MP3 and transcripts!
2.     “Critical Drivers of Success Blueprint” to help you keep on track and maximize your JV results!                   $195.00
3.     Master Creating Rapport On the Phone! This is a complete mini-course on telephone rapport by a $495.00
Master NLP Trainer, Alexander Van Buren!  You will learn: how to use NLP to create rapport, tips on
how to deepen rapport, trust and credibility plus several advanced NLP techniques to ensure your JV
4. How to Get Unending Referrals by top sales and results trainer Michael Price! In these online                   $97.00
audio trainings, you will learn how to get anyone to give you referrals by meeting 2 simple conditions!
Plus you will discover how to ask for referrals effectively to get a lot of quality referrals!
5. The Ultimate Joint Venture Boot Camp Online Membership & Updates for one full year! You will learn
the strategies to develop 6 & 7 figure joint ventures with your internet business. You will receive
the complete online video training from The Ultimate Joint Venture Boot Camp 2010 (from the 3-day
event this past January in Las Vegas). Plus you will receive access to all the preview calls and training.
You will learn from all the incredible trainers how to immediately explode your joint venture profits
for the start of the new year and beyond. Now you will be fully prepped to leverage your time and
money at the live event January 2011 in Las Vegas (you have permission to pass this bonus on to a
business partner or valued client)!                                                                                                                          $997.00
Total Bonus Value = $2,279.00
You will have 12 months of FREE access to www.TheUltimateJointVentureToolbox.com (screen shot above) PLUS one FREE ticket to the January, 28-30 2011 Ultimate Joint Venture Boot Camp in Las Vegas (go to www.TheUltimateJointVentureBootCamp.com for all the details or call Nevada Corporate Planners, Inc. at 1-888-627-7007.
About the Author:
Scott Letourneau is the founder and CEO of Nevada Corporate Planners, Inc. Over the past 13 years NCP has assisted more than 5,500 business owners form LLCs and corporations to get their business off to a fast start to profits™! Questions? Call NCP at 1-888-627-7007. www.nvinc.com

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Your Entity Formation Support Partner Must Meet These Criteria, Too

Nevada Corporate Planners wants you and your company to have the most protection, security and business advantage possible for your new corporation or LLC.  Call us at 1-877-515-0505, and let us show you how we can help you.  But whether you become our client or not, consider these points in your choice of strategic partners in this all-important decision process:

Seven Criteria the Company You Choose Must Meet

BEFORE You Let Them Form Your
Next Corporation or LLC!

  1. Look for a company that will ask you questions to determine the best entity for your situation—before they quote you a price! Imagine seeing your doctor for a physical.  He walks in the room, says hello and goodbye as he hands you a prescription — and never gives you an exam!  You might as well have diagnosed yourself by the “dartboard method.”
  1. Look for a company that understands—and will explain to you—multi-state taxation rules. These rules affect the state(s) in which your entity will have to register so you can do business. Beware of companies that tout tax savings in a tax-free state when you live and operate your day-to-day business in another state. States like Nevada do have powerful benefits, but tax savings are not typically one of them unless you live and work in Nevada.
  1. Look for a company that fully discusses your situation with you, so you know you’re making the best decision about which entity will maximize your outcome. Your “exam” should involve many in-depth, tailored questions, rather than a following a “cookie-cutter” approach. What cures someone else is not necessarily what will cure you!  Remember, if you’re looking for “easy”… if you’re looking for minimal effort – expect proportional results—or worse.

  1. Look for a company that knows the subtleties. Ask them why 71% of all C-corporations, if audited, would pay 35% tax on all profits earned, along with hefty penalties and interest that might cripple their businesses.  Does the company you’re considering know why?

www.nvinc.com Call within 72 hours of downloading this free guide at 1-877-515-0505 and

receive a Bonus GUIDE, a $47 value, The Top 20 Costly Mistakes BEFORE And AFTER Incorporating! and a 30 minute free consultation, a $200 value plus a special one time offer after you call!

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Do I Need An Attorney To Incorporate?

An attorney is not a legal requirement to incorporate. You could prepare and file the articles of incorporation yourself.  But, you must fully understand all the requirements of your intended state of formation.  That’s what NCP is here for.  We make sure you know everything you need to know, and give you the tools to make sure you’ve done everything you need to do. NCP does not require a retainer before you get started. You will receive all the fees up front so you know exactly what you be charged! Costs are not out of control with NCP!
In fact, when people hire an attorney to incorporate, the attorney often actually outsources the work to a company like NCP (and then tacks on a $1,000 fee for his trouble!)  Working directly with NCP is like buying wholesale instead of retail.  This will save you money up front.
You can use NCP’s service to incorporate and not only save money on attorney fees, but you’ll rest assured that all forms are filed properly. We recognize that there are areas where an attorney should be retained, especially when it comes to shareholder and buy/sell agreements, raising money, contracts, or to have your documents reviewed.  However, NCP will conscientiously inform you any time an attorney should be consulted. If you need a referral, NCP is happy to provide one for you!
www.nvinc.com Call within 72 hours of downloading this free guide at 1-877-515-0505 and
receive a Bonus GUIDE, a $47 value, The Top 20 Costly Mistakes BEFORE And AFTER Incorporating! and a 30 minute free consultation, a $200 value plus a special one time offer after you call!

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Why Incorporate?

First, let’s look at the basic question at hand:  Why bother with incorporation at all?
If you’re like many small business owners, right now you’re operating as a sole proprietorship. That’s probably not because you’ve chosen to, but because you don’t consider your business large or sophisticated enough to need to incorporate – or maybe you’ve never thought about it at all.
If you’re lucky, you’ll never have to pay the price for putting off that crucial next step… but that’s a very dangerous “if.”

Sole Proprietors Are Rolling the Dice

In today’s ultra-competitive and dangerously litigious business climate, you can’t afford to throw the dice with your most valuable asset.  Your exposure is far greater than you may think, both personally and professionally.  As a sole proprietor, regardless of the size of your business, you personally have unlimited liability if your company is sued.  You could actually lose all of your personal assets.
www.nvinc.com Call within 72 hours of downloading this free guide at 1-877-515-0505 and
receive a Bonus GUIDE, a $47 value, The Top 20 Costly Mistakes BEFORE And AFTER Incorporating! and a 30 minute free consultation, a $200 value plus a special one time offer after you call!

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