high growth start-up. bad credit.

[TheRiskTaken]

My goal with this thread is to find the best alternative financing and/or investors for my start-up. I'm 24, single, rent, and have no loans whatsoever. My monthly living expenses are about 950/mo. My credit SUCKS. What I do have, is time. Time is my most valuable assett. I was laid off last May.

I bootstrapped an internet advertising sole proprietorship last August. I do mostly ppc, with some seo, sem, and mobile marketing as well. I didn't break profit until the start of 2010. 2 months ago, after 70 hrs/wk of bootstrapping, I was achieving gross revenues of 1400/wk. Yes, you read that right. Those in the business will know this industry is pretty volatile although that is the beauty of it somewhat and, just two weeks ago, my gross profit was approximately $300.00/day with gross revenue of 750/day. The problem with this situation is the companies that pay me still only pay net 30. I can't sustain spending 4900/week any longer and have thus had to slow down my business' expenditure. I really see no ceiling to how much can be made here and I'm feeling stifled at this point. There is so much money to be made and work to be done, I'm just frustrated being held down by financing.

Also, I'm looking to form an s-corp asap as I'd like to limit my personal liablity as well as reap the benefits of not having to be paid a fair market salary as I would be If I were to form an LLC. Can you advise me the best path to forming my s-corp successfully, securely, as well as any and all costs to expect as well? Anyone? And ftw, how about some professional advice as to whether the best new hire would be contract, part time, full time etc. Anyone in this field, I'd love to speak with you. THANKS

 

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[Runum]

I'm going to try to be nice here. You don't come into someone's neighborhood, ignore the rules of the house, drop short, crappy threads around that we have to clean up, get your post count up, and then make your pitch asking for help. Sorry, you have a lot of learning to do in order to make sales. Why don't you stick around and read and learn for a bit before you begin asking for help for your project?

also, moving this thread to the intro section. Good luck.

 

[GlobalWealth]

My goal with this thread is to find the best alternative financing and/or investors for my start-up. I'm 24, single, rent, and have no loans whatsoever. My monthly living expenses are about 950/mo. My credit SUCKS. What I do have, is time. Time is my most valuable assett. I was laid off last May.

I bootstrapped an internet advertising sole proprietorship last August. I do mostly ppc, with some seo, sem, and mobile marketing as well. I didn't break profit until the start of 2010. 2 months ago, after 70 hrs/wk of bootstrapping, I was achieving gross revenues of 1400/wk. Yes, you read that right. Those in the business will know this industry is pretty volatile although that is the beauty of it somewhat and, just two weeks ago, my gross profit was approximately $300.00/day with gross revenue of 750/day. The problem with this situation is the companies that pay me still only pay net 30. I can't sustain spending 4900/week any longer and have thus had to slow down my business' expenditure. I really see no ceiling to how much can be made here and I'm feeling stifled at this point. There is so much money to be made and work to be done, I'm just frustrated being held down by financing.

Also, I'm looking to form an s-corp asap as I'd like to limit my personal liablity as well as reap the benefits of not having to be paid a fair market salary as I would be If I were to form an LLC. Can you advise me the best path to forming my s-corp successfully, securely, as well as any and all costs to expect as well? Anyone? And ftw, how about some professional advice as to whether the best new hire would be contract, part time, full time etc. Anyone in this field, I'd love to speak with you. THANKS

Runum is correct, this is not a place for solicitation. We ask that you hang around for a while and contribute and ask for help in finding solutions, but not solicitations.

With that said, I can address your second question, as this is my business. You have some false information regarding S-corps. Honestly, I cannot understand why anyone choses an S-corp structure anymore, but clearly they do.

An LLC is a much better option. You can elect to have your LLC taxed as an S-corp giving you the same tax benefits without the negatives of the S-corp. As you mentioned limiting personal liability.

Most business owners forget their are 2 aspects to asset protection. 1 - protecting your personal assets from the activity of the business and 2 - protecting the business from your personal activity. A S-corp solves problem 1 and fails miserably at problem 2.

And remember, your business is your source of income, so it is critical to take problem 2 into account. If you are sued personally and your major assets are owned in an S-corp, you can lose your shares in a judgment. Not so with an LLC, assuming you properly structured the LLC. And considering you can elect S-corp tax status for your LLC, there is no real benefit (in most cases) for utilizing an S-corp structure.

 

[EastWind]

My goal with this thread is to find the best alternative financing and/or investors for my start-up. I'm 24, single, rent, and have no loans whatsoever. My monthly living expenses are about 950/mo. My credit SUCKS. What I do have, is time. Time is my most valuable assett. I was laid off last May.

I bootstrapped an internet advertising sole proprietorship last August. I do mostly ppc, with some seo, sem, and mobile marketing as well. I didn't break profit until the start of 2010. 2 months ago, after 70 hrs/wk of bootstrapping, I was achieving gross revenues of 1400/wk. Yes, you read that right. Those in the business will know this industry is pretty volatile although that is the beauty of it somewhat and, just two weeks ago, my gross profit was approximately $300.00/day with gross revenue of 750/day. The problem with this situation is the companies that pay me still only pay net 30. I can't sustain spending 4900/week any longer and have thus had to slow down my business' expenditure. I really see no ceiling to how much can be made here and I'm feeling stifled at this point. There is so much money to be made and work to be done, I'm just frustrated being held down by financing.

Also, I'm looking to form an s-corp asap as I'd like to limit my personal liablity as well as reap the benefits of not having to be paid a fair market salary as I would be If I were to form an LLC. Can you advise me the best path to forming my s-corp successfully, securely, as well as any and all costs to expect as well? Anyone? And ftw, how about some professional advice as to whether the best new hire would be contract, part time, full time etc. Anyone in this field, I'd love to speak with you. THANKS

Well that's the thing with bootstrapping, you effectively start out with no cash. It's hard, but keep at it. Just try to have a positive cash flow and grow it up each month. On investors, start with your family, friends and people you know. On a new hire, I would start out part time. 8-10hrs a week, college student perhaps. Where you don't have to worry about providing benefits, paying unemployment "tax" or spending a lot of money. Make sure you get your solid 8-10hrs each week from em.

 

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[TheRiskTaken]

Runum is correct, this is not a place for solicitation. We ask that you hang around for a while and contribute and ask for help in finding solutions, but not solicitations.

With that said, I can address your second question, as this is my business. You have some false information regarding S-corps. Honestly, I cannot understand why anyone choses an S-corp structure anymore, but clearly they do.

An LLC is a much better option. You can elect to have your LLC taxed as an S-corp giving you the same tax benefits without the negatives of the S-corp. As you mentioned limiting personal liability.

Most business owners forget their are 2 aspects to asset protection. 1 - protecting your personal assets from the activity of the business and 2 - protecting the business from your personal activity. A S-corp solves problem 1 and fails miserably at problem 2.

And remember, your business is your source of income, so it is critical to take problem 2 into account. If you are sued personally and your major assets are owned in an S-corp, you can lose your shares in a judgment. Not so with an LLC, assuming you properly structured the LLC. And considering you can elect S-corp tax status for your LLC, there is no real benefit (in most cases) for utilizing an S-corp structure.

THANKS! I + repped you. Also, what kinda fees am I looking at, more or less?

 

[andviv]

Welcome to the forum.

You have a good problem, in my opinion.

We have discussed those topics here at length, do a search and you will see threads about how to hire the right employee, how to setup a corporation (although Global's reply is right on point), how to raise capital, etc.

For example, what if you charge your customers 50% up front, 50% after? If the results are there then everybody will sign up for that and will happily pay half up front. Have you tried that route?

Why is your credit bad? What type of defaults/collections do you have?

 

[MJ DeMarco]

Welcome sir, problems of growth are great problems to have although your numbers seem screwy. Your identical posting over on FatWallet also raises concern but we will play.

 

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[MJ DeMarco]

Most business owners forget their are 2 aspects to asset protection. 1 - protecting your If you are sued personally and your major assets are owned in an S-corp, you can lose your shares in a judgment.

I don't think you are correct on this ... although I'm open to be informed otherwise. If you have any links or documentation supporting this, please post them.

 

[GlobalWealth]

I don't think you are correct on this ... although I'm open to be informed otherwise. If you have any links or documentation supporting this, please post them.

I have no data. I am basing this own my own experience in dealing with my clients.

Nearly all of the entrepreneurs that call me asking for consultation have not considered problem 2. Nearly all of them think that because they have placed their business within a corp, they are well protected, which is not the case. I have worked with guys with 10s of millions in RE who were extremely vulnerable.

Even the ones that think they are in good shape because they have their RE in an LLC, are rarely protected due to the structure of the LLC. In most cases they form the LLC in their home state, which is almost never a good idea for holding assets. In many cases when I review operating agreements, they offer very little protection for the members in the event a member is sued personally.