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Category: Startup Ideas

  • You need a Side Hustle

    Some people are able to enjoy their life with only one job, but most of us need at least two jobs to make ends meet. A side hustle is an additional source of income that can help supplement the bills. Even if you are comfortable with your primary income, having your own business provides huge tax benefits. The beauty of a side hustle is that it gives you autonomy over your time and what you’re worth. I just want to share a few of the key benefits of having a business on the side.

    One key thing to note is that when we are talking about a side hustle we are not talking about a second job.  Working as a teacher during the day and then as a cashier at a store in the evening and on weekends will not provide the benefits we are looking for. The key to success in this endeavor is to own a business that you can build and get the associated tax benefits from.  This doesn’t necessarily mean you need to start a business from the ground up because there are many opportunities such as delivery driving or gig work that will meet these standards.

    One of the greatest things about owning your own business is that you’re in control.  Well, that’s not entirely true depending on the nature of your business.  If you doing delivery driving or gig work you do have a lot of control over when you work and how much you work, however, many businesses have a little more control over your schedule than you would expect.  For example, I have a few rental homes, and in general, I can schedule maintenance around my schedule and things run pretty smooth.  This is not always the case, We had a tenant that moved out to avoid eviction and left the place in shambles.   My family and I spent almost all of Christmas Break that year cleaning out, repairing, and remodeling to get it to rent-ready without losing too many months’ rent.  The point is that when you provide a service that customers count on, you will be accountable to the customers and when the service is needed.  Disasters aside you still maintain a large amount of autonomy and control over your schedule and work environment.

    Another key benefit is that your efforts build your personal equity.  We often talk about the benefits of building equity in a home, but building equity in yourself is equally important.  When we run a business we are building relationships, reputations, and experience that we can leverage for even greater success. Even if the initial business does not succeed, the relationships, reputation, and experience are there to help give us a head start in the next venture. In addition to the intangibles, many businesses generate income and assets that heal to build our wealth over time.

    Finally one of the great benefits of owning a business relates to the tax benefits.  Did you know that you are able to write off a portion of your home for a home office, many vehicle expenditures, travel, and vacations, as well as the obvious business expenses?  You are also able to self-direct some of your retirement funds

    This is a photograph of The Tax and Legal Playbook by Mark J Kohler

    and invest in your startup. The tax benefits are huge, but you need to be careful to make sure you are doing everything right. and that is beyond the scope of this post.  The best resource I’ve found is Mark J. Kholers book “The Tax and Legal Playbook” If you are starting a business or already have a business this book is a must-read to make sure you are getting the most benefit from your business.

    In conclusion, owning your own business is a great way to make more money and control your own destiny. You can also enjoy tax benefits that you wouldn’t have with a normal job. Now’s the time to start thinking about how you can get in on the action!

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  • What is Business?

    A business is any activity that provides goods or services to consumers for the purpose of making a profit. When Steve Jobs and Steve Wozniak created Apple Computer in Jobs’s family garage, they started a business. The product was the Apple I, and the company’s founders hoped to sell their computers to customers for more than it cost to make and market them. If they were successful (which they were), they’d make a profit.

    Before we go on, let’s make a couple of important distinctions concerning the terms in our definitions. First, whereas Apple produces and sells goods (Mac, iPhone, iPod, iPad), many businesses provide services. Your bank is a service company, as is your Internet provider. Hotels, airlines, law firms, movie theaters, and hospitals are also service companies. Many companies provide both goods and services. For example, your local car dealership sells goods (cars) and also provides services (automobile repairs).

    Second, some organizations are not set up to make profits. Many are established to provide social or educational services. Such not-for-profit (or nonprofit) organizations include the United Way of America, Habitat for Humanity, the Boys and Girls Clubs, the Sierra Club, the American Red Cross, and many colleges and universities. Most of these organizations, however, function in much the same way as a business. They establish goals and work to meet them in an effective, efficient manner. Thus, most of the business principles introduced in this text also apply to nonprofits.

    Business Participants and Activities

    Let’s begin our discussion of business by identifying the main participants of business and the functions that most businesses perform. Then we’ll finish this section by discussing the external factors that influence a business’s activities.

    Participants

    Every business must have one or more owners whose primary role is to invest money in the business. When a business is being started, it’s generally the owners who polish the business idea and bring together the resources (money and people) needed to turn the idea into a business. The owners also hire employees to work for the company and help it reach its goals. Owners and employees depend on the third group of participants—customers. Ultimately, the goal of any business is to satisfy the needs of its customers in order to generate a profit for the owners.

    Functional Areas of Business

    The activities needed to operate a business can be divided into a number of functional areas: management, operations, marketing, accounting, and finance. Let’s briefly explore each of these areas.

    Management

    Managers are responsible for the work performance of other people. Management involves planning for, organizing, staffing, directing, and controlling a company’s resources so that it can achieve its goals. Managers plan by setting goals and developing strategies for achieving them. They organize activities and resources to ensure that company goals are met. They staff the organization with qualified employees and direct them to accomplish organizational goals. Finally, managers design controls for assessing the success of plans and decisions and take corrective action when needed.

    Operations

    All companies must convert resources (labor, materials, money, information, and so forth) into goods or services. Some companies, such as Apple, convert resources into tangible products—Macs, iPhones, iPods, iPads. Others, such as hospitals, convert resources into intangible products—health care. The person who designs and oversees the transformation of resources into goods or services is called an operations manager. This individual is also responsible for ensuring that products are of high quality.

    Marketing

    Marketing consists of everything that a company does to identify customers’ needs and design products to meet those needs. Marketers develop the benefits and features of products, including price and quality. They also decide on the best method of delivering products and the best means of promoting them to attract and keep customers. They manage relationships with customers and make them aware of the organization’s desire and ability to satisfy their needs.

    Accounting

    Managers need accurate, relevant, timely financial information, and accountants provide it. Accountants measure, summarize, and communicate financial and managerial information and advise other managers on financial matters. There are two fields of accounting. Financial accountants prepare financial statements to help users, both inside and outside the organization, assess the financial strength of the company. Managerial accountants prepare information, such as reports on the cost of materials used in the production process, for internal use only.

    Finance

    Finance involves planning for, obtaining, and managing a company’s funds. Finance managers address such questions as the following: How much money does the company need? How and where will it get the necessary money? How and when will it pay the money back? What should it do with its funds? What investments should be made in plants and equipment? How much should be spent on research and development? How should excess funds be invested? Good financial management is particularly important when a company is first formed because new business owners usually need to borrow money to get started.