Business Start-ups

The price of goods or services is based on three basic production costs: direct materials, labor and overhead. After you determine this unit cost, you will need to determine a unit price to cover your production costs and achieve your desired profit margin. This amount should be acceptable in the marketplace. It must be profitable and competitive. The basic economic concept of supply and demand should also be considered in the pricing equation. Speak to your local CPA about your pricing strategies.

There are four basics of marketing. (the four P's) Product is the item or service you sell. Price is the amount you charge for your product or service. Promote are the ways you inform your market as to who, what and where you are. Provide are the channels you use to take the product to the customer. A major part of marketing invovles researching your customers to find out their need, and then fill it. Also, discover what your cusomers want and what they will be willing to pay for it.

Staffing is a common problem for businesses and your local CPA is in a excellent position to offer Human Resource consulting. In addition to your local CPA, you may contact The American Staffing Association at 703-253-2020, asa@staffingtoday.net or The Society for Human Resource Management at 703 548-3440, shrm@shrm.org.

Some advantages are: it has minimum legal restrictions; and is easy to discontinue. Some disadvantages are: unlimited liability; your income tax cannot be deferred by retaining profits; and you may not bring in new owners or outside capital contributions. Speak to your local CPA to determine the best entity choice for your needs.

Some advantages are that it avoids certain S corporation restrictions. It also avoids double taxation of profits. Some disadvantages are that it is currently considered a relatively new business entity with little case law or regulatory law currently available. There is inconsistent treatment from state to state. The entity must have at least 2 owners. Speak to your local CPA about determining the best entity choice to fit your needs.

Some advantages are: you have limited liability; there are easy ways to transfer ownership; there is a perpetual life and the corporation has the ability to raise capital through the issuance of stock. Some disadvantages include: there is a double taxation of profits; the entity is subject to various state and federal restrictions; and a corporate charter may restrict the types of business activities. Speak to your local CPA to determine the best entity choice to fit your needs.

Some advantages are: there is limited liability; and the entity avoids double taxation of profits as is the case with C Corporations. The profits that are passed through to the shareholders are not subject to SE tax as in a partnership. Some disadvantages are: that the shareholders pay tax on earnings even if they are undistributed; the contributions limits to a qualified retirement plan are based on shareholder/employee wages, not the overall profits as with a Sole proprietorship; and it is less flexible in choosing a tax year.

For information on worker classifications and other labor questions, contact the Department of Labor at their web site: http://www.dol.gov/dol

Although the 2012 federal minimum wage will remain unchanged at $7.25 per hour, six states have announced that their minimum wage will increase on January 1, 2012.
Arizona: announced a 30-cent per hour increase, from $7.35 to $7.65 per hour; an employer can pay a tipped employee a wage up to $3.00 per hour less than the minimum wage – $4.65 per hour.
Florida: announced a 36-cent per hour increase, from $7.31 to $7.67 per hour; tipped employees must be paid at least $4.65 per hour. The minimum wage was previously increased six cents per hour on June 1, 2011.
Montana: The announced a 30-cent per hour increase, from $7.35 to $7.65 per hour.
Ohio: announced a 30-cent per hour increase, from $7.40 to $7.70 per hour; the minimum wage for tipped employees increases 15 cents per hour, from $3.70 to $3.85 per hour. Additionally, employers can pay the federal minimum wage to minors ages 14 & 15-years old, and adults if the business’s gross revenue is $283,000 per year (previously $271,000).
Oregon: announced a 30-cent per hour increase, from $8.50 to $8.80 per hour.
Washington: announced a 37-cent per hour increase, from to $8.67 to $9.04 per hour.
Missouri: announced that the state minimum wage will remain unchanged at $7.25 per hour.
The rate increases are for the “regular” minimum wage. Under federal minimum wage law, states may permit employers to pay a lower hourly rate, sometimes referred to as a subminimum wage, based on certain factors; examples include age (minors), tips, commissions and employer gross revenue.