Business Quick-Tips

Friday, March 26, 2010

Interested in a New Revenue Sharing Website?

I am looking for beta testers for a new revenue sharing website that my company, Fletcher Venture Group, LLC, currently has in development. You can find out a few more details in this forum discussion:

Monday, March 8, 2010

When to Form an LLC

So you’ve been in “business” for quite some time now, whether it is online, out of your bedroom, from your car, garage, or maybe even a leased office space. You’ve made your money (or lost some) and are wondering what you can to do become even more legit as a business. Not to mention, you start to worry about some of the tax implications of running your own business.

Speaking from experience, forming that first LLC is one of the best moments in an entrepreneur’s life. It provides legitimacy as a business owner and provides a great sense of accomplishment. Of course, anyone for any reason can form an LLC, but what you might be wondering is, “when it is actually time for my small business to form an LLC?”

What is an LLC?

An LLC actually combines the small business friendly aspects of partnerships and corporations, so an LLC is less formal and more flexible than a typical corporation, yet offers protection as well as certain advantages that are much the same. For example, members cannot be found personally liable for company debts. Their assets are separate from the assets of the LLC so they cannot be seized. Flow-through taxation makes LLC’s a valuable business tool, allowing owners to be taxed only once instead of both as a business and as an individual on any salary paid out.

Pro’s of an LLC

• The LLC was specifically designed for small businesses, making it an intuitive aid in helping small business grow.
• Adds legitimacy to small business.
• Allows flow-through taxation; only pay taxes on earnings once.
• Allows business expenses to be directly associated to the business, making it easier to write off on your annual taxes.
• Provides liability protection for personal assets from lawsuit judgments and business debts.
• Relatively inexpensive (About $100-$300, some higher, depending on the state)
• Creates an Employer Identification Number (EIN) so that your business can hire employees or freelancers and write off their wages as company expenses.
• No required board meetings or administration of company meeting minutes.
• An LLC allows you access to business credit lines, discounted business rates, business clubs, memberships, and a whole host of other beneficial programs that are inaccessible to the non-LLC business person.

Con’s of an LLC

• LLC’s cannot be taken public. However, if you get to the point where your business is large enough to sell, you will probably be talking to attorneys and accountants who can better assist you in that transaction. LLC’s do not make it impossible for your business to be taken public; it’s just that LLC’s cannot be public companies.
• Some states, like California, do not let professionals (doctors, lawyers, accountants) use LLC’s.
• Each member's pro-rated share of profits represents taxable income, even if the profit is re-invested into the company.
• The managing member's share of the bottom-line profit of the LLC is considered earned income, and therefore is subject to self-employment tax.

Setting up an LLC

To set up an LLC, Articles of Organization must be filed according to state specific guidelines, and any and all fees must be paid. Articles of Organization are usually filed with the Secretary of State. You may wish to hire an attorney, although, unless you have a large small business it is highly unnecessary. Do you wonder if you business is large? Do you run it from home? If yes, then it probably isn’t large enough to warrant any attorney assistance. Plus, articles of organization can be modified later if needed.

You can apply for an LLC 100% online usually through your states department of commerce. I would simply do a Google search for “(State) LLC registration.” Here is what the Wisconsin LLC registration website looks like. Pretty straightforward.

So… What’s the Bottom Line? Should I form an LLC?

If you only have residual sources of income, it might not be necessary to have an LLC, after all, you can just record your income on the 1040 as “Other Gains” (Line 14). If you have income from a variety of sources as well as expenses (like postage, computer costs, freelance help), then the LLC is probably a good idea. If you have neither income nor expenses, but would like to add some legitimacy to your fledgling business, then the LLC is also a good idea.

*It is highly recommended that individuals seek assistance from qualified legal or tax representation when considering the advantages and disadvantages of LLC formation, as each business operates and performs differently.


Online Investment is a new investment platform where individual investors lend directly to individual borrowers. Dubbed "Peer-to-Peer" lending, Prosper, which has been around for several years and has an almost cult following, is a great way to put your money to work if you don't like the idea of having it sit in the bank. Investments of as low as $25 or as high as $25,000 can be made on each loan, making it accessible to individuals with a wide range of investment capability. Investment return depends on the individual portfolio, and the investor assumes the risk of the borrower defaulting, but Prosper has done a great job of having stringent borrower requirements, which helps to lessen the risk.

Sunday, March 7, 2010

Q-Tip #1 - Static Advertisement Layout

A "static" advertisement is an non-moving advertisement, like most highway billboards. However, business cards, brochures, and most webpages are static advertisements as well. Key to static advertising effectiveness is the layout.

Get the most out of your static advertising spaces by following this simple guide, from Western Illinois University.

Saturday, March 6, 2010

Zecco Trading Accounts and Residual Income Opportunities

I know most "home based income" blogs really focus on affiliate, advertising, and referral revenues, but I think its important to continually diversify your investments, including the use of financial investment platforms. Currently I use to complete my market trading activities. It is $4.50 per trade, not bad when you consider that most other online trading companies charge $10+ per trade. Zecco is able to keep its costs down by having a "no-frills" website. Although, I kind of like the simplified userpage (see picture). Some websites, like Sharebuilder and E*Trade, have different pages for buying, selling, research, portfolio analysis, account review, and order status'. Zecco makes it easier by putting it all on one page. This is especially handy if you aspire to be a day trader. You don't have to waste time by flipping between a dozen different webpages.

The best thing about this website is that there is no minimum investment. This means that the beginner investor can start with $50 or $100 bucks (or less I guess) to begin their investment portfolio.

I'm not even going to begin to explain investing strategies, since I don't want to be the cause of anyone's demise, but if you are interested in learning how to or which companies to invest in, check out a reputable site and read up on the latest market trends. CNN'S market news site is a pretty good source.

If you are wondering how the "residual income" aspect of investing comes in, start your market research by looking at high yield income funds. HYIF's offer stable monthly dividend payments, which is like a paycheck for letting them invest your money. So, you would own stock in the fund, and the stock's value can go up and down, but regardless of if it goes up or down, you would still get a monthly dividend payout. Like I said, I don't want to point you to any specific financial investments, but HYIF or high yield income bonds (HYIB), can offer a good starting point for beginning investors.

Now for the famous disclaimer:

*Investors should consider the investment objectives, risks, and charges and expenses of a mutual fund or ETF carefully before investing. A mutual fund/ETF's prospectus contains this and other information, and should be read carefully before investing.

Investors should consider market, maturity, and interest rate risks before investing in fixed income products. It is the responsibility of the client to understand the terms, conditions, risks and rewards of fixed income products as risks can be substantial.

Thursday, March 4, 2010 Earnings Observations

I have really started to turn my attention to, a website which allows you to publish and be paid for written content. It is very similar to eHow. I have been on the website for about four months and currently have 54 articles, although I expect to be up to a couple hundred by the end of this month. One major difference that I noticed between firehow and eHow is that it appears as if you get paid based on "hits" or views, instead of advertising clicks. Many people have noticed that they have 50, 100, or even more views on their eHow articles, but have no earnings. On Firehow, for every 2-3 views you earn 1 penny. Its not much, but it adds up over time. Based on my data, I believe that you get paid about $0.0037 for every hit; or roughly one dollar for every 270 hits. I hypothesize that the payment system is based on views and not hits because I am consistently earning, even with very few views. It is highly unlikely that out of 3 views there will ALWAYS be one person that will click on an advertisement, generating 1 cent in earnings. My articles, with very little advertising effort, on average generate between 2-5 hits per day, or 1-2 cents. Obviously, this is only an estimate, but I have noticed this trend to be VERY consistent. My articles, on average, earn about 1.3 cents per view. This means that Firehow pays out at roughly 28.4% of eHow, when comparing the per-view payout rate. Of course, these are generalizations, as some people have higher or lower earning articles. But I have a eHow sample pool of 618 articles, with individual articles earning as high as $70+ per month and as low as, well, nothing. So I believe it to be a good range of data.

I plan on posting a more exhaustive review of eHow data that I have been collecting over the past 9 months if anyone is interested.

What has your experience been with Firehow?