Starting Your Own Business with Concept Design and Plan Development | Mark J Kohler

Hey everybody, Mark Kohler here with an important Facebook Live, YouTube Live and I'm gonna look cross eyed because I got two cameras going on here. Don't go anywhere yet. Let me just explain what this video is about. Maybe we'll be here 20 minutes or so at most. But I'm doing this for you live that are participating. I've got Q and A. I already got questions in the hopper. I got a client in South Carolina from Florida with his S Corp getting a 1099, wants to know what he can write off on housing and food and it's awesome. So if you're a small business owner and you want to know your best tax write offs and you got a small business that is off the ground and cranking, don't go anywhere. For those that are live, drop your question in down below and I'm going to try to hit everything I can right now on YouTube or Facebook Live. Now I'm a CPA attorney, best selling author, blah blah blah. But most importantly, I'm an entrepreneur and I love small business and I love the American dream. I'm right here broadcasting from Main street usa, hating on Wall street. Why don't you guys to live your dream and what you want. Best out of life. Now I've got a new workbook out called the 8 Steps to Start and Grow youw Business. This is what it looks like. It's pretty awesome. Eight steps to start to grow your business. This is my copy because I'm continuing to make notes in it. Then this cool. Ah, it's so awesome. Well, we're going to talk about step one on this video right here. I want to present the strategies for this. Now if you bought my workbook and you're going through the videos, I have a full hour and a half where I go through step one. That's not this video. This is more like an introduction in a sense. I'm going to get as in depth as you guys want. But step one is critical and obviously all the steps are important in my opinion. So we're going to go through this concept, design and service, product development. Now this workbook, what's cool about it is there's like 46 different videos and you can just hold your phone over a QR code, watch video, catch a webinar, listen to a podcast. You fill out this workbook and at the end, after filling out all these different little tables, it spits out a business plan and a strap plan and a marketing plan. Yes, this thing is freaking awesome. But this is not an infomercial I won't do that to you at Entrepreneur or on my own site. I'm not doing that. I want to be here with content today. If you want to learn more about this, get over to markjkohler.com it'll be in the content below. Now, Darci Myers, as usual, is over on the computer taking your live questions. Should we give her a visual? There's Darcy over there. Okay. No, we're good. Okay. All right. She's like, do not point the camera at me. So anyway, we're ready to go. So drop in your questions below. Now step one, concept design and systems and product development. And all this is so important and what I want to do, explain. Now we're going to get into technical questions. Any of you that have a question about what's the tax write off this year after the Tax Cuts and Jobs Act, Can I write this off? Do I need an llc? Do I need an S corp? I'll go into those in depth. Any question you want to ask, I'm going to hit it. But I want to introduce step one. Let me take a breath. I'm drinking my diet Mountain Dew just for you guys. Now here's the thing. If you're building a small business that you already have, you're always thinking of new ideas, new products, new services. That's like starting a business within itself, right? Because you've got to think this is going to be a good idea. Is it going to make sense? Where am I going with this? If for those of you that are just dipping your toe into entrepreneurship, you may be thinking, is this a good idea or not? And how do I, you know, kind of bring it together? Well, that's where there's three plans involved. And I have a few believer in this. There's three plans. You've got your business plan and many people think that's it. The business plan is the end. I do my business plan and that's my guidebook, guys. Your business plan is a one time event. Now, I do consultations with clients all over the country. We've got like five attorneys here, seven or eight CPAs, and an amazing support team of paralegals and accountants. We do consults every day with clients around the country and it's on a regular basis. I meet with people that are really frustrated. They started a business three years ago and they're like, if I only knew what I did now, I would have done it differently. They still would have been an entrepreneur and they would have modified the business. But they learned all these Things along the way that it puts them in a regrettable spot now. And I always ask them, did you do your business plan? Didn't you know there was a competitor across town that did the same thing or the pricing was jacked up? Well, I didn't do a business plan. I just had a good feeling and I went for it. Now guys, I bless you for your, you know, tenacity, your excitement and you take the leap of faith to start a small business. But guys, the purpose of the business plan is not to tell you whether or not to go into business, is to help you craft the right business to start. That's why so many businesses fail is because people put their ladder against the wall, start climbing and they go, oh, I'm against the wrong wall, I don't want to be here. And let's stop and think for a minute. So a business plan in my opinion is a one time event. You're going to do a business plan to determine is this business a good idea, who are my competitors, what's my pricing model, Are people going to buy this? You may even test your product out, do some surveys, get it out on social media, tell people your idea. Now there might be some confidentiality or if you're inventing something, you want to be a little more private about that. But get out and test market in a small pool and see what's going on. That's what a business plan is all about. So in my step one of the book, I go through and ask you questions to help you craft it. Now the other two plans which you're going to love come out of the business plan. This is your strap plan or strategic plan and marketing plan. Now the marketing plan and your strategic plan, those live on, those go with you everywhere you go. I've got money right here over on the table. I'm not kidding. I take it home with me at night. It's next to me by my bed. When I have an idea, I put it on my strap plan or marketing plan. A business plan helps you design how you're going to market your business. It also gives you the roadmap. 3 months, 6 months, 12 months, 5 years. How is my business going to come alive? Well, that's the Strat plan. So in your concept design I'm going to go through a few important tips. Now start writing your questions down below on some tax and legal questions we've got. I forgot his first name on his South Carolina, Florida question. We're going to come to that. Let me just take you through a Few of the questions that I think are so important. And in this first step, a lot. Do you know, I had a client literally text me this morning at 7:30. Great guy. I almost get emotional when I start talking about it. He's trying to reinvent his life and he's looking to start a new business, but he doesn't know what to start and he's really frustrated. And so some people out there, you got your day job but you hate it. So you want to start a small business on the side. Don't give up. Take your time though. And one of the first things I go through is I'm asking you, what are you passionate about? What are you good at? Would you have a business partner? Who would you choose if you wanted to have a business partner? I want you to come up with 5, 6 ideas of small businesses and start thinking about them and developing what they might look like. What is your niche? What's going to make you different? We start talking about your business plan, layout, and who's your competition? I want to ask. Find your top three competitors. What are their strengths and weaknesses? What would your strengths and weaknesses be? Why you're going through this is I want you to start a business you're just excited about. Why not wake up every day doing something you love and making money at it? That's legal, mind you. I just want to point that out. So make sure that you're out there. Build a dream about what you love to do. I'm going to give one other example. I've got a guy, he started out in corporate America, hated it. Every night he couldn't wait till 5 o' clock to hit the road. My camera guy, he knows him right now. Cory, right? Five o' clock. He was fly fishing. That was his dream. He could not wait to get out of the office and he finally said, you know what, why am I doing this now? He built some relationships with some of their fly fishing guides on the side. He was saving his money, buying in his own float boat, buying himself a truck, getting a trailer. Remember all this, Cory? Yeah. And he would talk about, man, I can't wait to go fly fishing this weekend. But then all of a sudden the light went on and he said, I'm going to start my own fly fishing guide business and I'm going to do what I love. Even if I'm living month to month, at least I wake up doing what I love. So, so, so important that we have a business that we're building around a concept and a thing that we love. So, so, so, so important. Okay, now I'm just going to wrap this up and then we're going to do some Q and A and I'm here for you. Write your questions down below. On any tax strategy, legal, structuring, S Corp llc. We're going to break it down in the final break takeaways of Section 1 of my how to start a small Business. I want you to think of an executive summary. That elevator pitch, which I love, that entrepreneur does everybody. You got to be on Facebook Live on Wednesdays on Entrepreneur to catch Elevator pitch because you want to be able to describe your business on an elevator ride. Start working towards that and talk about what you're passionate about, who your competitors are and who's your different. That's why you're different. That, my friends, is step one of how to start a small business or grow your business. Alright, now we're going to hit some Q and A and I'm all here for you. And I wanted to suggest to all of you, if this is ringing an accord, please get over my site, check out my little workbook. You can do it online, you can do it in print, whatever you want, you can start doing it immediately. I'm going to tell you the eight steps because I'm going to do eight videos on this and hopefully you can watch some of them. Number two is building your financials and raising capital. So step three, maintaining a strategic plan that's building this piece of it and then a whole section on banking and bookkeeping. I have plans called creation. I set up my bank account for my business utilizing a marketing plan so that you have your brother and sister there. Legal structures and procedures, tax planning, my favorite, writing off expenses. And then finally systemizing the business and reducing overall expenses. Those are my eight steps. Guys, I've been doing this for 20 years. I know I look like a millennial, but really I've been doing this for 20 years and I'm helping people build their business every day. This seems like 99 bucks. You can access it right away. So get over to markjcohler.com and check it out. Alright, now, questions. Alright Darcy, should I get yours first? You ready to roll or should I got two?

Mark Green on Facebook is asking can you talk about how to get money as a profit company by setting up arm length contracts with nonprofits for events.

Oh my gosh. So Mark says he's got a business. All right, so we're going to assume this is an operational business. And remember today we can talk about anything you want. You're going to put operations on this side, you're going to put your assets on this side. So over here might be rental property, your Airbnb, your VRBO rental. You're going to put your investments, your holdings, your notes, you're going to put your home. Over here, your life insurance, your 401k, your IRAs. This is all your assets. What Mark's asking is, he says he's got a business, so an operational business and he wants to go out and work with non profits. So think of this like I guess, United Way. He's going to go to United Way and say, I can do something for you, United Way and I want to have a contract with you and to build my business. And think about that. I mean, I'm not opposed to what Mark's talking about. Does United Way buy water bottles to go off and give away to people in a hurricane damaged area or Salvation Army? Right, sure. So they're going to buy products from someone. Not everything is going to be donated. So I guess what I'm assuming Mark's talking about is in your business, which might be an LLC or a corporation and this is for profit. So you're wanting to make money. This is your business and you own it. Can you sign contracts with nonprofits that help buy your, build your business? So you're going to sell products to a nonprofit and the answer is yeah, you can do it. Just treat them like any other for profit. Darcy, next question on YouTube.

I don't know his name, but his YouTube channel name is get what you want consulting. He says, hey Mark, thanks a ton. Question. Two rental investment properties, living in one. Two consulting companies, a therapy business and two books to publish in the near future. How should we structure Boy?

So what's his handle?

It's get what you want consulting.

Get what you want consulting just asked me a huge question. He's trying to get what he wants. I appreciate that. I'm going to call you John Doe. I said it could be Mary Jane, but John or Mary. Let me just say this, you need consultation. But. So let me throw this out though, for everybody. He said, mark, I've got two rental properties. I'm going to try to remember this, Darcy, Two rental properties, he lives in one of them. So the other one he's renting out rooms or doing an Airbnb vrbo. Then he's got his. He says he has two businesses, consulting

companies, two consulting companies, a therapy business,

a therapy business, and he's got two books to publish. Let's go with operations first, everybody, if you've got multiple businesses, this is very important. Many of you will find this maybe earth shattering. Anybody that's watched me before, you know where I'm going. I want you to have one parent company. I want you to have one Microsoft one, Apple one at, and T, that's yours. So, John or Mary, what I'm going to say is I want to make sure that you choose one of your companies, maybe with more of a generic name. Get what you want, consulting. Get what you want, consulting. G W, Y W, whatever. This might be your S corporation, which is typical. And then it's going to own the therapy business, it's going to own the consulting business. You might publish a couple books, you might own a URL. But the point is, I want you to bring all your operations into one parent company. This is where you're going to do your salary. K1, your W2, K1. We're going to get the new 20% pass through. I'm going to write off home, office, auto dining, computers, electronics, the kids. I mean, I want everything in your S corp to be your parent. This is where you're going to file a consolidated tax return. And this consolidated tax return will help bring together your overall business into one bucket. And you can have a partner over here. This could be a Subway sandwich shop. This could be an Applebee's. This could be a tech company. I don't care. Let them all flow in one. I'm Mark Kohler. I got multiple businesses, but I have one S Corp and it's Mark J. Kohler Inc. Right here. Then he's got a couple rentals. We're going to decide if you have one LLC. Two LLCs, are they in the same state? Do you have multiple partners? Is one a bed and breakfast and a vrbo. So there's lots of issues here, right? This is where a half hour, an hour with one of our tax lawyers. I'm going to build you a bubble chart, give you an item, task list of things to do, and we're going to bring it all together. It's not going to cost you $5,000 for some, you know, coaching program in Vegas this weekend. Figure it out. We can do it in one hour on the phone with one of my amazing tax attorneys. Give us a call, just get a quote, do an interview, interview us to see if we're a good fit. But this type of question, people, and I love this question, you got to sit down for an hour and get into the nuts and bolts. All right, now I got another good Question here, Darcy. It's okay. Yeah. Before you go, I'm going to do this one. Adrian, do you have a first name on this one? Evan. Okay, Evan, this is for you, baby. And I want to let you know Adrian has been carrying this note around for a week, making sure that when I do my Facebook, YouTube live, we cover it. Okay? So Evan, now this is good for everybody. He says, mark, currently on a job in South Carolina, already read his notes. I can do it from memory here. He goes, I'm on a job in South Carolina, but I'm from Florida. All right? And he goes, I'm going to go work up in South Carolina and get a 1099. So guys, what does that tell us? All right, so we've got his corporation. Because if he's going to get a 1099, I don't want to throw it through an LLC. LLC is do not save taxes, people. I've written books about it. I'll preach it from the rooftops. Do not think you're going to go online and set up a frickin LLC and save taxes. They don't. We're going to convert it to an S corp. Now you can have an LLC taxed as an S corp, but ultimately, Evan, you're going to be an S corp. But he lives down here in Florida. And then he's going to go to South Carolina to go make money and he's going to get a 1099. And we want that 1099 to go into his S corp. Any of you doing Internet sales, online sales, you want your revenue to go into your S corp. All right, cool. And then he's going to do his little salary dividend split. We're going to write everything up. Well, the first question, and Evan, I got to give it to you, I'm proud of you for not asking this. I thought he was going to say, hey, I'm really from Florida with no state tax. Can I get out of state tax by working up in South Carolina? But say I'm from Florida. He did not say that. I am so proud of you. Because guys, when you live in a tax free state like Texas, Washington, Florida, but you go to another state that has taxes like New Jersey, Arizona or Minnesota, when you work there, you're going to pay taxes on the proportion of income that you earn there, whether it's a W2 or a small business. Moreover, Evan, you're going to have to register your S corp and foreign in South Carolina. So even though this S corp is a Florida entity, you're Going to also register it in South Carolina and that's okay. It only costs you a couple hundred bucks. You're good to go. Call my paralegals, they'll hook you up. But you're going to have to register your company in both states because you're doing business in both states. Now here is a big question. Evan says, how can I write off my expenses when I travel? The rent and the housing? Now, I called my partner, who is amazing, Liddell Air of K&E CPAs, and I said, lidell, he's going to be in South Carolina 12 months. Can he really write off his apartment, his food, in his travel to South Carolina? Well, there's actually an IRS Revenue Ruling 9386 that says if you go on temporary assignment somewhere, you can write off all of your housing, half of your food because it's 50%, and all of your travel to and from that temporary assignment. That's pretty cool, right? So, Evan, you're in the money, but the question is, what's temporary? Well, under the revenue ruling 9,386, the IRS says if it's less than 12 months, you're in the money, you can write it off. If it's over 12 months, no write off. Evan, what me and Lidell talk about for a moment is make sure that you're traveling back and forth to Florida on a regular basis. Maintaining a residence in Florida, even if it's renting a room from someone, would help. And then finally, do not stay in South Carolina over a year. It could cost you thousands. Come back, take a break for a couple months, then go back to South Carolina. But do not work continuously for over a year or you lose the write off for all of your food, travel and housing. Evan, great question. Thank you, Adrian, for saving that. Okay, we're going to take a few more questions. I'm here for you. Darcy, what do you got?

Devon Carroll. It's another kind of long question, but Devon Carroll on YouTube's asking or he's saying, I have two LLCs. One is for my primary business that files as an S corp. The other is a short term rental business. Now I expect to have around 40k this year from YouTube, etc. No idea what to do. And then should the online income go through the primary LLC or set up an additional company? First names Devin.

Devin says everybody, let me repeat this question. He says, mark, we've got two LLCs, one for a short term rental. So that's an Airbnb vrbo. Then he says, I've got a Primary llc. What kind of business did he say?

Did you. So primary business that files as an escort, gather as a short term.

So you didn't tell us what his

business is.40k this year from YouTube.

But he's also going to get 40k from YouTube. So he has his primary business, financial planning. That sounds like. Okay, so primary is financial consulting or advice. Then Devin here is going to make another 40 grand on YouTube. God bless you. That's awesome, Devin. So he's got some YouTube revenue. That's awesome. When you get your silver play button, shout out, man. We'll give you some love. I'm working on my silver play. Everybody get to my YouTube channel. Subscribe. I post YouTube videos every week. You guys would freaking love it. There's over 70 videos there. Okay, Now Devin's question was, how do I get my YouTube revenue, how do I report it and where should it go? Hands down. Hundred percent correct. Not even a guess. Devin, you want your extra revenue to go into your S corp. You do not want YouTube revenue going into an Airbnb short term rental. This is going to create passive income. I've got other videos on my YouTube channel on Airbnb, VRBO, Uber driving, all of them. Get over there. But this is passive long term. Even though you call it a short term rental, it's long term income. People. Over here is where you put your YouTube revenue. And you're selling on Etsy, you're selling as an Amazon affiliate, you're doing your primary financial. It all goes into your S corp. Then you do your tax planning here, Devin, you're off to the races. You're freaking rocking it. Couple more questions. It's up to you. Darcy.

Yeah. So I don't know this guy's name, but I'm going to try to say this right. Eroc 34444. He said, can you lease your car to your LLC if you don't own the car?

Okay. Erock 3444 says, Can I lease my car to my business? You could, but don't do that. Okay? I'm going to finish on this tip. Unless you got one more question. Okay. Darcy's throwing down. Guys, this is the year of the auto. It is amazing. There are better auto write offs right now in the United States of America than ever been in the last 30 to 40 years. If you want to buy a new car or used car new to you or, or lease this year, the write offs are better than they've ever, ever been. Now, I've got articles on my blog I've got some YouTube videos on this. Go check them out. Very, very important. Now, EROC3444 says, I've got a car over here. We can even stick with Devin's example. So he goes, I've got this car and I'm going to lease it back to my escort. No, you don't want to lease it back to yourself because the S Corps going to make a lease payment to you. So you get a write off here, but then you have income here and then how are you going to depreciate it? But you're not because you're leasing it. Don't do that. Here's the deal, guys. If you own a car already and you're starting your business, you're going to just contribute it to the business and we're going to go with mileage. Mileage is your best method when you contribute a new vehicle to the, to the business. Now you could Iraq take the car and contribute it to the business and start depreciating it. But the write off is terrible. You don't want to do that. If you. Because here's what the tax Cuts and Jobs act did with Donald Trump and Congress. They said, we're going to give you amazing freaking write offs to buy a car this year. Did you hear the word buy a car? Stimulate the economy. They don't want you. Don't stimulate the economy. When you take your Geo Metro jalopy and contribute to the business. They, they want you to go out and buy a new vehicle or even a used vehicle over at CarMax because that stimulates the economy. So EroC, if you want to go out and sell this car and buy a new one, the write offs or used the write offs this year are amazing. But if you're just going to contribute your current car to your business, don't lease it back and forth to yourself. It's a nightmare. It's not going to get you any better. Write off. Simply take mileage. It's 54 and a half cents a mile this year. Track your mileage, do your best. I've got an app on my newsletter every week. If you haven't signed up for my newsletter, get over to markjkohler.com and sign up for the newsletter. Okay, Darcy said one more question, one more. Okay, this is it, folks. You're gonna love this.

Okay, so Guillermo on YouTube is asking. I run, I run LLC classified as an S Corp. I understand the benefits of an S Corp status, but why not just register the business as an S Corp? What's the difference between LLC with S Corp status versus S Corp?

Okay, good question. And this is Guillermo. He says, mark, I've got an LLC taxed as an S Corp. Why don't I just get an ink? I'll just be Guillermo Enterprises, Inc. Why am I, Guillermo LLC taxed as an S Corp? Here's the reason why. Okay, I got Shelby on a camera right here. If Shelby came to me and says, mark, I'm starting this new business, I'm going to start selling clothes online. I've got a great website. I'm setting up affiliate relationships with Target, that's Target for some of you, and Amazon and all these great places. And I'm going to sell clothes online. I'll say, how much money you going to make? Well, the first year I might make 20 grand. 30 grand. 50 grand. Okay, cool. That's great, Shelby, go out and let's start your business. But. But what is Shelby going to want to be in the long run? If she's selling a product or a service and she's going to make 50 grand or more, that's her goal. What type of entity does she want to be? Darcy. What does she want to be in the long run?

S Corp. That's right.

S Corp man Darcy rocked it. So in the long run, Shelby's going to want to be an S Corp. But Guillermo's saying, well, Mark, I don't know if I want to be an S Corp right out of the gate because I'm going to have to file a corporate return. Your company maintenance is going to be the same. Your asset protection is going to be the same. Your filing fee to set it up is going to be the same. Don't think an LLC is cheaper. But the question is, in the long run, we know we're going to be an S Corp, but this is the beauty, Guillermo, of an LLC taxed as an S Corp. Because Shelby can start her online business now. She starts it as an llc. She gets her tax ID number, she gets her banking set up, her merchant account. She starts building corporate credit. She starts running her business. She's rocking it. Oh, but she didn't make a 50 grand this year. That's okay. She still gets her write offs and she's still a small business. But once she starts making more money, then we want to make the conversion to an S Corp boom. I can't go back in time and turn you guys into an S Corp. It is now October 2018. If you want to be an S Corp, we might wait until January 1st where you're going to only be an S corp for the rest of this year for maybe three months. But any of you that had an LLC this year and you realize an S corp is what you really needed, I can go back in time and turn it into an s Corp. As is 11 18, Guillermo. The LLC gives you the flexibility to go back in time and turn it into an S corp. I can't go back in time and make you an ink. So last point. If any of you already know you're going to make 50 grand or more and you're going to get out there and kill it, and we already know Shelby's going to make a ton of money, then I'm going to go straight to an S corp. But if I need the flexibility and the time to see how it matures, I do an LLC taxed as an S corp when the time is right. Now remember, your LLC for your rental property is going to be a different type of llc. They're going to be Brother Sister. This is the LLC for the rentals. This is the LLC that's going to become an S corp for your operations. There are two different types of LLCs. See what I'm saying? Anyway, guys, thanks so much for being here. I love owning a small business. I want you to at least own one on the side. It's going to allow us to save taxes and build more wealth. My step one of how to start and grow a business is just that. Start, grow, and grow. Every one of those steps will help you at any point you're at. Thanks for letting me be here. I'll be here next week doing step two, and over the next eight weeks, if I can stay committed to Darcy, she's going to hold me to it every week. I'm going to try to do another step and make sure it's here on YouTube and on Facebook. Everybody, keep living the dream. Don't give up.