Your Questions About Internet Business For Sale
Paul asks…
How can I sell my business?
I own an internet business. We sell subscriptions. The rough monthly numbers are:
Sales: 10k
Direct costs: 4.5k
Admin: 2k
SW development: 1k
Marketing: the balance.
The business is growing at a rate of around $1200 in sales per month, and I expect it to ramp up as we increase marketing. I am considering selling. Any idea of what is it worth? How would I go about selling it?
Jere answers:
Find a CPA that does valuations. Then, go to a business broker, they are listed in the yellow pages. They operate much like a real estate broker, bring buyer and seller together and getting commission on the sale of the business.
Thomas asks…
Forbes 500 did a study that was posted on Yahoo, There were 3 legit online Internet home businesses.What were?
This article was posted about 3 to 4 weeks ago on Yahoo. It consisited of a study by Forbes on home internet businesses. 3 of these businesses prooved to be legit. Can someone please send me a link to this article? Your help is greatly appreciated!
Jere answers:
Email me direct and I will give you the site of one of them with alittle history. They are BBB rated, ranked by Forbes as one of the top 25 fastest growing companies in the world, have the highest rating by Dunn & Bradstreet and are getting ready to break Microsoft’s record of reaching 1 billion in sales. Check out my profile also if you would like.
Val
fortunehtm@hotmail.com
Nancy asks…
What is the average home business liabilitly insurance monthly premium?
This would be an internet based business run out of my home, with $2000 in sales a month.
More specifically, this would be for a home based internet business that does $2000 a month in sales, in Illinois and makes no original products, but resells them. I have heard that companies who manufacturer the products hold the liability, not the reseller, is that true? Does it reduce my liability that I do not make the product I am selling?
Jere answers:
It is absolutely not true that the manufacturer holds all the liability. If you sell the product that caused an injury, you are going to be just as liable as the manufacturer for the injury.
Lawyers are going to try to find as many deep pockets as possible, so they will do after you and whatever you have and your insurers.
So be sure to buy plenty of liability coverage.
Ken asks…
Do you think I can start a business while in school?
I make beautiful intricate hand-beaded jewellery as a hobby. How can I translate this into an income while studying at University in the US? Do you think an internet business would work for me? And what would be a good structure for such a business? Just trying to get ideas here. The broke student gig isn’t going to work for me for the remaining years.
(P.S. I’m not a US resident so I can’t get a job off campus. I need to be creative but legal here.)
If you have experience with internet business or any other type of small business please give a little advice that would help me get things off the ground. Thanks.
Jere answers:
Doing business on the internet requires cooperation. (as in any walk of life except selling your wares on the street).
You might use the internet as a good way of displaying your product, and give some people who you talk to a business card. Sales are best conducted in person, as most women will know.
I suspect it is legal to host the products on a website abroad. What might be illegal, would be tax avoidance. If you do not think tax will be an issue, then I cannot see what is illegal.
You may find that your visa is cut short however, if you transact business which is not deemed legitimate. The best way to find out about legality, is trial and error.
James asks…
How would I go about filing for taxes for my new internet business?
I have a Facebook like page which has over 100k likes. It’s all about fashion, make up, jewelry, pastry etc. Small & sometimes large business always contact me about promoting their page on my page. My charges are
1 post every 3 days for 1 month – $75
1 post every 2 days for 1 month – $100
1 post every day for 1 month – $125
1 post every day for 1 month + being featured on my website & blog – $150
I also get paid money from goodadsense pay per click on my website and blog. I get money from that as well.
I haven’t spent any money yet & I’ve been doing this for almost a month. My paypal account is STACKED with cash. I wanna transfer to my bank account but I wanna know if there’s anything I should know before I do that. I want to buy my baby some stuff.
Also aside from the internet business I got going on, in my daily like I’m a nurse & a student. My child will be born in October on this year so I wanted to know that when I claim her, would that make how much taxes I owe go down? Or what happens?
Jere answers:
If in 2012 you had no dependent (your daughter), and in 2013 you have a dependent, you will have a child credit. So if all other things remain equal, then you should expect to owe less / get back more (whichever way applies to you) in 2013. By all other things remaining equal, I’m referring to earned income, passive income, deductions, and filing status — these things do not change.
What you are referring to, here, is passive income. If you are a nurse, then you have earned income. This side venture is just that — something on the side (passive). You will need to make quarterly estimated tax payments on your earnings (net income) from this passive venture. That’s the easiest way to avoid penalties. You say you haven’t spent any money yet, so sales (gross income) IS net income. How much do you need to pay quarterly?
As a general rule, look at your last two years’ tax returns, and determine your average effective tax rate. Take into account if this extra income from the passive venture will increase your effective tax rate. If you aren’t familiar with what effective tax rate means, I’ll give you some info and then a personal anecdote.
If you are single, then whether you make $100,000,000 per year or $1,000 per year, you will owe the same percentage on one tier of earnings. Then there are several other tiers. These are called marginal tax brackets. These marginal tax brackets are different if you are married filing jointly.
In any case, let’s just use John Doe as an example, and I’ll do my best to remember the brackets (but the numbers don’t really matter — just see the method). John makes $30,000 this year (after all tax credits and deductions) — e.g., his tax basis is $30,000. The first $8,700 of his adjusted income is taxed at 8%. The amount between $8,701 and $15,700 is taxed at 10%. The amount between $15,701 and $30,000 (ends there not because of the tax code, but because that maxes out his taxable income) is taxed at 15%.
In accounting and finance this is a problem of weighted averages. Out of that info, how do you determine the average income tax rate John Doe pays?
($8,700/$30,000 * .08) + [($15,700-$8,701)/$30,000 * .10] + [($30,000-$15,701)/$30,000 * .15] = 11.8%
John Doe pays an effective tax rate of 11.8%. Your tax preparer, CPA, or TurboTax — they can tell you what your effective tax rate was for 2012. If you do not want to be any more sophisticated than that, then (if you are John Doe), and you add passive income to the equation, make sure you remit 11.8% (your prior-year’s effective tax rate) of your passive income each quarter to the IRS.
It’s more complicated than this. Since you have no expenses and you can claim no deductions, you should probably go with a higher percentage. So, let’s say your effective tax rate was 8.5%. Add an extra 20% onto that (.085*1.2 = 10.2%) — so remit 10.2% of your passive income back to the IRS quarterly.
That’s a big generalization, but the tax code is so hard for many people to understand — it’s the best I can do on yahoo answers.
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