Outlining a business plan gives you details of your goals and how achieve them.  You want to outline where your starting point is or if it is an existing business where it is currently.  Where do you want the business to be, what time frame and how to get there.  This is extremely important for any investor or creditor to make a decision whether or not to make the investment.  Your business plan outline will assist you in managing your business.  You want to outline financial projections, sales forecast and budget.  Normally books are closed monthly where you would be able to compare your budget and be able to make any changes when needed.

How To Write A Business Plan

Outline how future sales will be reached.  What type of marketing strategy you will use an why.  Which type of market is suitable for your product or service.  List as much information as necessary including description of your customers, special markets like seasons and demographics, pricing your product or serivce and how much and who is your competition.

Business Plan Pro Advanced Training – Financial Forecasting

Finally, completing your business plan outline is how much will this cost?  Do you have the funds for start-up or must you acquire it.  If so, define how the funding will be used, how long will it take to re-pay, how much at a given time.

There is alot to consider when starting or expanding a business.  Having a business plan outline can help guide you.

How to Write an Executive Summary for a Business Plan

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Current Allowable Automobile Mileage Tax Deduction 2010

Vehicle Tax Deduction-Claim It January 2010

If using the actual expenses, determine the costs to operate the car for the part of the business use.  This will include gas, oil, insurance, licenses, registrations fees, repairs and tires.  Depreciation or lease payments that are attributed to the portion of total miles driven for business miles.  The IRS requires that you must keep adequate records to support your statement if you elect to take a car tax deduction.  Purchasing a mileage log book at your local office store can be very helpful in recording your mileage.

Recovery: Vehicle Tax Deduction

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Aged Shelf Corporation

Why would someone want to purchase a shelf company? 
   •To save time in the setup of a new company or corporation
   •To bid on contracts, certain locales require a company to be in business for a length of time
   •To obtain access to business credit
   •The ability to gain investors capital
   •Easier access to corporate credit

Accessing credit and capital may not be so easy though, most creditors will dig into a company’s history before allowing a loan or investment. 

There are associations that start and sell shelf companys where the new owner can show a history to creditors or investors.  This does not mean every assocation or business that creates or sells a shelf company is on the up and up.  There has been many complaints and abuses of this.  Check out the seller or creator of the shelf company before buying.  Know that the shelf company before you purchase is free of liens or judgments.

BEFORE YOU BUY A SHELF CORPORATIONS 

There are a few ways to protect yourself by obtaining certified articles of incorportion, pre-printed stock certificates, corporate seal, certificates of good standing and any minutes from meetings.  Each of these items should be obtainable through the state where the shelf company was created.

Nevada Aged Shelf Corporations

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Are you looking to start a small business, company or expanding your existing business?  Learn how to do market research for your new company formation.  First you must ask yourself which type of business do you want to develop and what type of identity do you want to create.  If you are going into business alone, you may want to consider sole proprietorship.  This type of company formation can be operated as a DBA and by your social security number or file for an Employer Identification Number also known as an EIN.  This company formation does place more legal responsibility on you.  Consider all the options when choosing which business formation.

Company Formations Advice – Choosing a Company Name 

Another company formation maybe a partnership with two or more people operating the company.  There are several different partnerships to consider, limited or general are the most common.  You want to select others with the same business goals and someone who you can work well with and willing to take on the responsibilities of the financial burden and be held accountable.  Some partnerships are set up as a Limited Liability Company.  There are some costs involved in this company formation but it also gives you an umbrella of liability protection.  Seek legal advice before setting up any form of partnership, an oral agreement would not be recommended.

Incorporating your business maybe another option, but this can be complex.  There are much more costs involved than the other two options.  This is where you have a stockholder or a group of stockholders controlling the company.  This company formation holds annual and regular scheduled meeting of stockholders for the board of directors where the minutes of the meetings must be documented outlining their business decisions.  Corporations are normally set up as a C or S Corporation. 

Company Formation 

You ask yourself which company formation is made simple, quick and inexpensive.  Take the necessary steps in seeking professional help with an accountant and possibility an attorney.  They can take you step by step in determining which company formation may best suit your needs. 

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I do have some experience in writing about home office deduction for small businesses.  We are a small business and work out of our home.  When filing your taxes and claiming a home office deduction the space must be exclusively for your business.  We have consulted with our accountant on which items are deductable, which items are not and the percentage of home space used for our small business.  Your deduction may be a room or space in a room as long as the space is identified as separate that you use for your home office deduction.

 The IRS states the following:
If you use a portion of your home for business purposes you may be able to take a home office deduction. Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly:
    •As your principal place of business, or
    •As a place to meet or deal with patients, clients or customers in the normal course of your business, or
    •In any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.
    •For certain storage use, rental use, or daycare-facility use, you are required to use the property regularly but not exclusively.
Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.  There are special rules for qualified daycare providers and for persons storing business inventory or product samples.

The IRS is very clear on the exclusive use required by setting aside a space in your home for your business.  You may work a few hours or all day and six or seven days a week but don’t violate the exclusive use requirement by allowing your spouse or children to use the space for personal use, you may surrender the opportunity for the home office deduction.

My Home Office Deduction 

Having a business in our home vs renting an office space somewhere else in a building has reduced our overhead costs.  It has saved on rent, electric, heat and phone costs.  Would I recommend a home based business and taking the home office deduction, yes.  This benefit has given alot of small businesses a chance to grow and survive.  Don’t be afraid to take the home office deduction thinking is will trigger an audit by the IRS.  Alot of changes in the tax laws since the late 90s have made it much easier for people to start a small business and work out of the homes. 

How do you calculate the business percentage of your home?  The home office deduction is calulated on the square footage of the space used for your business divided by the overall square footage of your home.  If your space measures a 12 x12, the square footage would be 144 square feet.  If your home measures 28 x 40, the square footage is 1,120 square feet. Divide the space square footage by the home square footage, 12.8% (144 ÷ 1120).

What does the 12.8% percentage really mean.  You may be able to deduct a portion of your mortgage interest, property taxes, home owners insurance, electric, phone, heat and any general repairs and maintenance.  Any expenses to maintain or make repairs to the space is fully deductible. 

Home Business Tax Deductions (Home Office Deductions) 

What you cannot do is create a tax loss to cover other income.  Your home office deductions cannot go beyond your business income. When in doubt always check with your accountant to see which expenses you qualify for.  Having a professional advise you in the start up or existing business is never a bad idea.  They can give you direction that is beneficial to your home based business.

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If you’re just starting in business and considering which way you should set up your company, you may want to consider a limited liability company.  This can be set up as a single owner or partnership.  First thing is to file articles of llc formation or articles of organization with your state government agency that handles limited liability companies.  The form is simple, you will need to provide information as the company name, people forming the company, their names and addresses and the contact person for the LLC and a description of the business you are forming.  If you are already a sole proprietor you can become a limited liability company.  An attorney may also assist you setting up your limited liability company.

All You Need To Know About LLC Formation-Business

All states are not the same when it comes to filing llc formation articles.  I know our state of Pennsylvania requires a public notice in the newspaper.  Some states may also require an operating agreement.  You can do some research for your state on the internet to see the requirements.  Just type in state secretary for your state (PA state secretary) and there should be a link for Corporate Filings.  Usually there are links listed for each business organization that you can ready to see which one is best for your company.

A llc formation gives your company limited liability protection.  Having an operating agreement drawn up to show how the llc’s owners or members relate to each other and to the limited liability company can improve your liability protection.  Having the assistance from an attorney can be beneficial. 

Some states may also require a business license for your new llc.  Once you’ve received notification from the state that you’re approved, the llc formation is complete.  When filing in the state of Pennsylvania we received a limited liability seal stamp, an outline of the operating agreement and also a book of certificates showing the percentage of interest each owner or member owns.  You may also want to set up an appointment with your accountant.  Filing taxes will require a filing for the limited liability company as well as your personal filing.  

 LLC Formation

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Tax time is right around the corner for individuals, small business owners and corporations.  All are looking for any type of tax break they can deduct out of the thousands of pages of the federal tax codes.  Many are going through their income and expenses to see where their bottom line will end up. 

Some individuals file their own taxes online but many business owners hire a professional accountant to perform that dreadful task.  You need to provide your accountant with any major equipment purchases, changes that occured during the tax year and possibility staff hiring or firing during the year.

10 Common Business Tax Deductions

SMALL BUSINESS TAX BREAKS

Employees – If you are operating as a sole proprietorship or S-Corp and have your spouse employeed in a flow-through entity this can lower your taxes by deducting the wages and contribute the funds to some sort of retirement plan, speak with your accountant.  If you hire a person under 18 in some states, dependents of the self-employed that qualify may be exempt from Social Security and Medicare taxes. 

Tangible Property/Equipment – Most business equipment is tangible property and is known as an asset.  Assets mainly are depreciated over a period of time, depending on the type of equipment, could be 7 years.  Some accountants may elect to deduct the entire purchase price in the same year.  These write offs must pertain to your business and be resonable.  When the economic stimulus package was signed section 179 set new, higher limits (and bonus 50% depreciation) that were first introduced in 2008 have been extended for 2009. This means the limits are almost double from previous (pre 2008) years.

When you purchase an asset and take the tax deduction you must also report when the asset was sold and the selling price.  Some assets may be sold for more than the purchase price and the difference is taxable income, which must be reported and taxes paid.  Most equipment purchases will depreciate and won’t be sold for a profit.  Speak with your accountant on this issue before selling any asset.

If you finance equipment, any finance charges that you incur may also be deducted.

Outside Sales – If you use a vehicle for your business and want to deduct mileage of your trips, it is required you keep a mileage log.  The government may change the current mileage rate allowed from year to year.  For the 2009 tax year the mileage rate is $ .55 per mile.  I believe this rate will change for the 2010 tax year to $ .50 per mile.

Home Office – When working from your home office, make sure the office space contains only items to operate your business.  Computers, business phone lines, faxes and office furniture if fully allowed for a write off.  You may also deduct a portion of the other expenses you incur in your home if they are necessary to operate your business like utilities, homeowners insurance, property taxes and mortgage interest.  This is usually calculated by taking your square footage of your office divide that by the total square footage of your home.  This percentage is what is allowed to be deducted as operating expenses.

Travel and entertainment – When traveling keep all receipts pertaining to hotel room, tolls and bridges and flights. If traveling for a coporate meeting these expenses are allowed if you keep records of the business activity that is conducted. Also note the reason for any employee that needed to attend.   As far as meals are concerned the government has standard deductions for this.  Employee or client meals are at 50% but if you are working past your normal working hours and buy dinner for your working employees this is 100%.

Health Insurance – A few years ago a small business owner could not deduct 100% of their health insurance cost.  This has finally changed where the small business owners can deduct the same cost like the big corporations have done for years. 

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Drew Miles on Maximizing Business Tax Deductions and Tax Write-offs 

Once you decided which type and form of business, you should also have a background of business operations, setting up accounts with suppliers, negotiate pricing, marketing and hiring employees.  There are helpful tools to help you learn about forming a business, you can start with an accountant or search for your help online.  Make sure you comply with the law within your own state.  Starting your business correctly may save you from failure and unnecessary expenses and exposure.

Coming Up With a Business Plan
You want to outline what your goals are with the business and what is needed to get there.  Outlining a strategy is very important to your success.  Your business plan should include the following:
An outline and how to sell your business.
Description with an overview, history and structure.
Products or services.
Strategy of marketing your business.
Outline the operations, everything from location to staffing, also include policies.
Employee job descriptions and responsibilities.
Analysis of your financials. 

Many owners need to consider how their new business venture will impact their your own finances and may dictate the way they operate the business.  This is mainly true when anyone starts a home based business or small to medium size.  Some will use their own savings, borrow from family members or apply for a small business loan.  Others starting on a larger scale may look for investors.

Share Business Ideas

Networking with other business owners is one way to learn marketing, promoting your product and gather business ideas.  Some organizations hold meetings that are essential to owners to learn about challenges and successes from other business owners.  There is a wealth of information that you can learn whether it is from meetings or online articles.

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