The human approach to marketing and strategic brand consulting for solopreneurs, start-ups, and small businesses.
SMIK
The human approach to marketing and strategic brand consulting for solopreneurs, start-ups, and small businesses.
Big ideas for small teams.
When it comes to starting a business, choosing the right structure is crucial. For many entrepreneurs, Limited Liability Companies (LLCs) offer a balance of flexibility and liability protection. But how are LLCs taxed? Let's break it down in simple terms. Hear it from the IRS. According to our pals at the IRS, “the IRS will treat an LLC either as a corporation, partnership, or as part of the owner’s tax return (a disregarded entity).” If you’re a domestic LLC with at least 2 members, the IRS says you’re a partnership. Just 1 member? Then you’re “an entity disregarded as separate from its owner, unless it files Form 8832 and elects to be treated as a corporation.” Let’s talk through pass-through taxation. Anything with “pass-through” sounds like a good time. The nitty gritty — one of the key benefits of an LLC is its tax flexibility. By default, LLCs are treated as "pass-through" entities for tax purposes. This just means that the business itself does not pay taxes on its income. Instead, the profits and losses "pass through" to the owners' personal tax returns. As an LLC owner, you report your share of the LLC's profits or losses on your personal tax return. This simplifies the tax process, as you don't have to file a separate tax return for the LLC itself. **In layman's terms, you’ll pay personal income taxes for your share of the business.** Proportional taxation Your share of the LLC's profits or losses is typically based on your ownership percentage in the company. For example, if you own 50% of the LLC, you would report 50% of the profits or losses on your personal tax return. It’s important to sort this out with your partner WAY before you start making money. Things could get hairy if you wait to decide who owns what % of the business. Flexibility in tax classification Okay, so the default tax treatment for LLCs is pass-through taxation, but… LLCs have the flexibility to choose *how* they want to be taxed. They can elect to be taxed as a sole proprietorship, partnership, S corporation, or even a C corporation, depending on their specific tax situation and business goals. Self-employment taxes It's important to note that as an LLC owner, you may be subject to self-employment taxes on your share of the LLC's profits. These taxes cover Social Security and Medicare contributions and are typically paid quarterly. Talk to the pros. Navigating the tax implications of an LLC can be complex, especially as your business grows and evolves. Consulting with a tax professional or accountant who specializes in small business taxation can help you understand your tax obligations, maximize deductions, and ensure compliance with tax laws. The TLDR In summary, LLCs are taxed in a straightforward manner, with profits and losses passing through to the owners' personal tax returns. This simplicity, coupled with the flexibility to choose your tax classification, makes LLCs an attractive option for many entrepreneurs. By understanding the basics of LLC taxation and seeking expert guidance when needed, you can confidently navigate the tax landscape and focus on growing your business.
So you’ve got a great business idea and you finally decided on a name. Nice. But next, you'll need a killer domain name. This is the “front porch” of your small business or start-up — so it’s gotta be good. Follow along for 7 tips to create and secure a domain for your small business. 1. Get Creative: Think of your domain name as your digital calling card. Brainstorm some catchy, memorable ideas that capture the essence of your business. Go wild — and then reel it back in to make sure it makes sense for your business. Ask friends and family if you’re not sure if your creative idea is too much (or not enough). 2. Hit the Web: Once you've got a list of potential winners, hop onto your favorite domain registration site (we're fans of GoDaddy and Namecheap) and see if your dream domain is up for grabs. 3. Keep It Simple: Remember, simplicity is key. Avoid tongue twisters or overly complicated names. You want something that rolls off the tongue and sticks in people's minds. 4. Add Some Spice: Spice up your domain with relevant keywords that tell customers what you're all about. Just don't go overboard – nobody likes a keyword salad! 5. Be Consistent: Your domain should be consistent with your brand identity. Think of it as your online signature – it should reflect who you are and what you do across all platforms. 6. Explore Your Options: Sure, .com is the OG, but don't be afraid to venture into .net or .org territory if they better suit your biz. And hey, if you're feeling patriotic, there's always the good ol' .us extension! 7. Lock It Down: Once you've found the one, don't wait! Secure that bad boy before someone else snatches it up. Trust us; you'll sleep better knowing your digital storefront is safe and sound. So there you have it – now, you can find and secure a domain that perfectly represents your small business online. Remember, your domain is not just an address; it's the foundation of your digital presence and plays a vital role in shaping your brand's identity and success. With a little creativity and a dash of determination, you'll have your online empire up and running in no time!
Choosing a cofounder can’t be that hard, right? According to Harvard Business Review, it is — “Most early-stage startups fail due to founder disputes, not the substance of the business.” Deciding to start a business with someone is kind of like starting a marriage with someone. You’re going to spend a LOT of time with the cofounder of your small business. Multiply that by 10 if you’re starting a small business consulting firm or small agency because you’re going to be a two-man-band for a while. So, how do you do it? As co-founders of a small business consulting firm, we’ve got a few tips to help you out: 1. Find your yin and yang. Within reason. The best co-founders have a synergy without a sameness. If you’re the same person with the same patterns and ways of doing, you lack variety of ideation that is necessary for a growing start-up or small business. Find someone who matches you where it matters — - Vision - Ambition - Value alignment - Enthusiasm for the business - Leadership style But also, find someone whose complements challenge you — - Temperament (Good cop, bad cop, right?) - Knowledge and areas of expertise - Interests - Hiring philosophy - Soft skills and technical skills 2. Always prioritize someone with a stellar start-up mindset. Starting a business usually means getting in the weeds, while also thinking wide and high-level. Basically, you have to be everyone, everywhere, all at once. (Isn’t there a movie about that?) You’ll want to pick a co-founder who can jump into the “Let’s do it!” mode for your small business or start-up. They’re not below or above anything, and usually, they don’t fear anything. You’ll both have to make quick decisions and be comfortable with failing and learning from your failures. 3. Honesty and transparency are KEY. We can’t stress this enough. Starting a business is no small feat. You need someone you can communicate openly with — someone with mutual trust and strong communication skills. Before you go into your business, sit down and have a super open conversation to understand the best way to talk to each other about the business… the good, the bad, and the ugly. 4. You’ll want to work with someone you actually like. Believe it or not. You’ll spend a lot of time with this person, especially in your early days. If you hate what they stand for or you feel drained every time you leave a conversation with them, they’re probably not a great fit. Your co-founder should inspire and motivate you. You’re on the same, so you want someone who’s truly rooting for you — just as you’re rooting for them. And together, you’re rooting for the business. A good test? Go on a 1-2 week trip with your potential co-founder. If you can’t stand them after the trip, you may want to reconsider. 5. Sometimes, it’s your best friend. Don’t feel limited to your professional network. Your friends and family are incredible options for a cofounder buddy. If you have a friend you’ve always thought you’d love to work with, ask them about starting a business. You may be surprised. Good luck and happy co-founding!
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