Author Topic: Resources for making the most of a (very small) business?  (Read 864 times)

fallstoclimb

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Resources for making the most of a (very small) business?
« on: August 12, 2016, 07:41:49 AM »
My husband has started selling a product he makes.  This is never going to be much of a money maker, barely will even qualify as a side hustle, but I'm thrilled he's finally found a hobby that won't be a money pit, and may turn a little bit of a profit.  (Key word being little.)  He's the only one in the area doing this type of work and a bunch of local shops have already expressed interest in carrying the product.

I'd like to learn more about making the most of this business, exploiting the loopholes in true mustachian fashion.  He wants to upgrade his equipment in the next year, and I think that can be a tax write-off --- yes?  That's the sort of information we are looking for.  I've done a little research and I don't think it makes sense for us to deduct utilities, etc., but supplies & equipment seem like a possibility.  I'm torn on deducting the room he uses -- it's a multiuse room, we could probably reorganize some things so that it's a dedicated space, but that would require buying a some additional furniture so I don't know if it'd be worth it, plus I hear that deduction is an auditing red flag -- I just don't know if I want to deal with it.

I also remember there was a time where I really wanted to sign up for Chase Ink, although I no longer remember why.  We already have Chase Freedom and Chase Sapphire Preferred.  I see that the Chase Ink comes with some bonus miles, although I'm not keen to sign up for a second credit card with an annual fee.  If we do, though, can we use personal spending to hit the minimum spend requirement? 

Does anyone know of any easily digestible, helpful books or other resources for this type of information?  I've done a little searching around and most books on starting a business talk about hiring employees, scaling up, etc -- this will solely be a small side hustle.

Gerard

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Re: Resources for making the most of a (very small) business?
« Reply #1 on: August 13, 2016, 07:10:15 AM »
I am a random stranger on the internet who claims to have run a side hustle that eventually got bigger. I can't give a *lot* of advice without knowing more about the business, but:

1. Definitely apply for business credit cards, partly to keep spending separate (and easy to find if audited), but also for sign-up bonuses.

2. As it's not going to be a big money maker anyway, work extra hard on being ethical and giving back to the community whenever possible. Whatever that means in your situation: better sourced raw materials, donations, transparent advertising or support materials, mentoring, etc.

3. Stick with it for a long period of time. The reputation payback takes longer than you'd expect.

4. Understand the tax rules on the differences between things you can write off right away and things that you have to write off over multiple years.

5. Treat the fact that you have another income source as the business equivalent of "FU money". Don't get into deals that you're uncomfortable with, just because you need the cash flow.

6. Do not even think about renting office or workshop or whatever space until the business has become so successful that it's absolutely necessary. This is the huge one that I've seen kill small businesses. Seriously, until you're turning back the covers at night and finding drills or chinchillas or clients in the bed, you can continue to run the business out of your home.