I figure any classes I take after grad school are going towards my doctorate, right??? Right! So pretty soon I’m going to go by Dr. Tracy, or Dr. T for short.
I’ve been taking free business classes at the NYC Business Solutions Center in Jamaica Queens (there’s a center in every borough, and if you’re not in NYC I’m sure your city has great resources too. If not, move here!). Although the information is daunting, and hard to wrap my brain around some times, I’m learning a boat load. For instance, an LLC is more expensive to set up than a sub chapter S Corp, but you don’t have to pay city taxes on the first $100,000 of profit each year. That’s about a huge savings every year. Also, if you have any full-time employees you need to have workman’s comp – even if you’re running an internet business and the only inherent danger is a broken nail.
The hardest thing to accept is that my original budget was completely unrealistic. I can’t believe a random number I guessed without doing any research could be unrealistic, but such is life. I was figuring my prototype would cost $500-$1000. Ha! I’m meeting with the engineers this Thursday and just the initial consultation is $500. They said that prototype development usually starts at $5,000. Eek! I know I can find a cheaper place, but I can’t find a single bad word written about this place, it’s relatively close, and they focus on making prototypes that are ready to be manufactured – that means I won’t have to start over again when I find a manufacturer.
I figured I would be able to do all the accounting with Quickens, but now that I learned payroll tax, unemployment tax, sales tax, and metro tax are all on top of city/state/federal taxes, and they all have different deadlines I’m realizing it’s not worth the time to become an expert, and the potential for making mistakes are too high. But fortunately I met a great CPA at business school and she’s helping me out.
I figured I wouldn’t need a lawyer since I’m working alone, and I’m not going to sue myself. However, there are so many gray areas of the law that I don’t understand, and I can end up paying a lot more in the long run if I don’t have someone to help me dot my legal i’s.
Originally I laughed at the guy who wanted to sell me my domain name for $1,800, but now that I’m seeing the costs of everything else it seems silly to lose out on the perfect marketing name just to save a couple hundred dollars.
At first I was budgeting $10,000 to have the prototype, LLC status, website, and first order of inventory. Now it seems like $20,000 at minimum (I’ll explain where this money will come from in a later post). At first this number made me gag, but then I looked at it in another light. I wouldn’t balk at paying $20,000 for business school if I really thought I needed it. But now I’m going through the Tracy Business School (TBS -characters welcome), and better yet, once I graduate I will have a fully running business. OR I will have a big expensive failure. But even if it’s a failure I will still be exactly where an MBA grad is – looking for work.