Your Questions About Internet Business Plan

Jere answers:

You should sell products that are in demand and something that you have more knowledge of. Make a marketing plan and conduct a feasibility study.

Then learn internet marketing methods by searching online and be updated by good tactics. Remember there is no easy or fast way to earn money, you should put time and effort into it.

Jere answers:

There is a wealth of information on the u s small business administration website www.sba.gov

Jere answers:

You can purchase an actual restaurant business plan at http://www.BusinessPlanWorld.com/restaurant. The business plan is based on a plan from a real business owner who opened a restaurant and obtained funding from a financial institution. Also on the site, you can hear an interview with the owner giving advice from his experiences as a restaurant owner.

While you will have to customize the business plan to suit your own needs, I think a plan that has actually been used in real life is better than a generic one.

Jere answers:

It depends on how much money the business would generate and how confident you were that the business would be successful.

In finance, your confidence is measured by the rate of return you could get investing the money elsewhere (or your cost of borrowing). This is called your “Discount Rate”

For example, if you know you could borrow the money to start your business at an interest rate of 10% (say from a credit card), then you had better make sure you can earn at least a 10% return from your business in order to break even.

Price = Payment / Discount Rate

If you expect to earn $100,000 per year from your internet business, and you would have to borrow money at a rate of 10%, then:

Price = $100,000 per year / 10% annual interest

Price = $1,000,000

You should invest no more than 1 million dollars in this business (example). Otherwise you are running a loss.

To be safer, you should probably set your discount rate higher (perhaps 50%).

Price = $100,000 / 50%

Price = $200,000

At a price of $200,000 making $100,000 per year, you would earn a 50% rate of return. Which is more than enough to both cover your borrowing cost, and earn a profit for yourself.

If you are not confident in your business being successful, you should demand an even higher discount rate, or assume lower income. This is how you would determine how much you should be willing to invest.

If you are very confident that you can get the business going successfully, but don’t have any cash, write a detailed business plan and present it to a bank. If your venture has a lot of potential, the bank will give you a business loan.

Jere answers:

It’s hard to give a perfect answer…..Some of it can depend on how much income you have from all sources, internet business and anywhere else.

For your self-employment taxes, you will need to set aside up to 15.3%.

For your federal income taxes you will need to set aside an amount based on your estimated tax bracket – anywhere from 10 to 35%.

For your state income taxes you will need to set aside up to 9.3%.

I have talked to self-employed persons who try to keep roughly 30-35% aside for taxes.

I would always recommend reviewing the situation throughout the year, to see how much money you are making and spending and see what is likely to be the taxable amount. So a monthly or quarterly review to “estimate” what your tax situation is looking like, and plan and adjust accordingly.

Shannon C.