Penn Wealth Publishing

2018.09.02 Penn Wealth Report Vol 6 Issue 03

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6 penn Wealth RepoRt volume 6 iSSue 03 02 Sep 2018 Penn Wealth RePoRt Copyright 2018. All Rights Reserved. investment intelligence command & contRol haRvesting gold I can still picture the knucklehead standing in front of me and saying it. He was a business partner I once had; a part of one of the many life lessons which ended badly but left an indelible mark on my psyche. "You have to spend money to make money," he would emphatically say, typically to justify the ridiculous advertising purchase he had just made with our money. That was also his justification line for the fancy house he owned on a golf course, and his country club mem- bership at yet another golf course. It was his personal life motto which he proudly espoused, even after he sank into a sea of debt. Within four years he was out of the business, but I had survived. Let's face it, there is no shortage of slick marketers out there telling you why you must spend your hard- earned money (or go deeper into debt) to "invest" in what they are selling. And, more often than not, the bigger the "investment," the bigger the scam. But don't fall for it. The simple truth is, with the current state of technology, you can leverage small sums of money into powerful tools to market, advertise, and attract new clients or customers to your business like a pro. Unlike a generation ago, successfully launching and running a small business can be done using cash on hand, no matter how meager the hand you are play- ing. This is known as bootstrapping, and it can mean the difference between fumbling into quick bank- ruptcy, or laying a solid foundation for a vibrant, viable, income-producing enterprise. One that you control, not your creditors. What, exactly, is bootstrapping? It's a sad fact, but more often than not the success story you just read about in that business publication had more to do with relativity than genius. As in, who is the star of the article related to, and how much "seed money" were they given? I have seen it first hand, time and time again. Someone heralded as a wunderkind actually got their start by standing atop a launch pad paved by their parents' bank account. And that's fine; there is nothing wrong with using the advantages you were given in life. Not all of us, however, were blessed with wealthy parents. In the incredible country in which we live, however, a dynamic person with a great idea truly can build something from nothing. Specifically, bootstrapping is defined as accomplish- ing something using the existing resources at hand. As we alluded to, taking on too much debt as a young enterprise can be disastrous, and it increases a compa- ny's risk of failure immensely. Furthermore, traditional lending institutions are a lot stingier these days with respect to giving out loans to unproven entities. As Bob Hope once famously put it, "A bank is a place that will lend you money as long as you are able to prove you don't need it." That leaves most startups out in the cold. Therefore, bootstrapping may be thrust upon us, whether we intended to courageously go down that path or not. But don't despair! There are now a multitude of low- cost options you can take advantage of immediately to address nearly every facet of your nascent busi- ness—even to get it started in the first place. We have provided the hyperlink for each company discussed (just click on the respective name) so you can check them out for yourself. Corporation, LLC, "Doing Business As," sole proprietorship... don't I need a lawyer to help me make sense of all this? Yes and no. Until relatively recently, starting a company registered with the state was a costly and time-consuming undertaking. A lawyer specializing in the complexities of business law would need to be hired to do the research work and file the mountain of paperwork required. Then, certain critical actions would need to be taken every year which also necessitated an expert's help. All of that changed with the advent of the internet. A company called LegalZoom, founded in 2001, began offering to help individuals not only select the right business for their needs, but greatly streamline the entire process for a fraction of the typical legal costs. Additionally, all of this could be done without leaving the house. Packages for forming an LLC, for example, start around $100 plus filing fees, and the time com- mitment is just a few hours. You are required to have someone serving as the company's "registered agent," which LegalZoom will help you take care of for around $70 per year. Since a company is an entity and not an individual, someone (the registered agent) must be appointed to receive any important tax and legal documents and act on Bootstrapping, Part I Business Finance In this modern age of business, you don't need to go into debt to launch and market your grand enterprise

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