Managing The Business My Welding Business
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  1. #1
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    Managing The Business My Welding Business

    I went full time self employed two years ago. I started with mobile welding then began fabricating out of my garage. I moved into a 2000sq ft lease shop seven months back. My customer base is growing rapidly. Currently I have more work than I can do. I have 0ne full time employee, 1099, helper/apprentice skill level and a part time skilled employee. My troubles are now that I'm covered up with work I don't have time to handle the business side. Following up new potential customer inquires, estimating bids, book keeping, logistics- material research, shipping, etc.. I need to hire a skilled welder/ fabricator to free up my time to grow the business but I'm not sure I could guarantee a consistent 40 hr week and would have to do the Workman's comp, payroll taxes, etc...I can't keep up with the books now. Which brings me to my question...Can any of the business owners suggest a booking keeping system that works for a small fabrication business, purchasing..materials...supplies...shipping, delivery costs...travelexpenses...invoicing...accounting... banking...etc...Currently I'm attempting all by hand myself. Not enough hours in the day. How do you established business owners handle everything?
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  2. #2
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    Re: Managing The Business My Welding Business

    A friend of mine hired a PT book keeper/ accountant to come in one or two days a week and take care of all the day to day stuff that needed to be done.
    .



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  3. #3
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    For software Microsoft money is good for a general ledger. You can also use a payroll service which should keep you out of trouble.

    I had a garage with 4 employees. I used a program called shop key that did inviting, kept track of labor and inventory. It worked well. Now I work alone and only hire CPA to do my taxes.
    Real world weldin.

    When I grow up I want to be a tig weldor.

  4. #4
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    Re: Managing The Business My Welding Business

    Hi Wagin, I know its not on topic but any chance you need any more skilled labor?

  5. #5
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    Waging,
    I have a similar issue. I ended up purchasing QuickBooks contractor edition, it tracks everything. It still takes a lot of tome so I hire a bookkeeper to access my computer via remote access. They do all of the taxes and data entry for about $150 a month. They pick up receipts once a month. The only stuff I do is estimating and invoices. I can actually "work" a lot more now. Don't be afraid to outsourced that stuff that cost you money to do. I figured I lost several times over that $150 each month doing it all myself.

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  6. #6
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    Re: Managing The Business My Welding Business

    i would like to offer you a word of caution as far as the 1099 "EMPLOYEE"....CYA and make sure they fall under the guidelines of the IRS or you could be liable for back due taxes etc. on them, as well as you still MAYBE currently liable for workers comp claims if god-forbid one were to get injured on the job....the times of using the 1099 tactic to get away with starting up your small business are mostly long over but i will let you be the judge of that.
    here is a link to the criteria that needs to be met for 1099....
    http://www.irs.gov/businesses/small/...=99921,00.html
    i have been in your shoes but have had a 20+yrs head start on you and fully understand the headaches associated with owning your own business and trying to keep the lights on and keeping the payroll current while eating ramens and not paying yourself as you are waiting for the checks that are "in the mail" etc.
    honestly the rules have tightened up so much that it is hard to stay in the game especially while burning the candle at both ends. i would suggest finding an accountant that would come in once a week or every other week depending on how often you pay your guy(s) for a few hrs to do the payroll etc....its well worth the money in my book as my time is worth more to me and after all i am the guy doing the rest of the show and not a tax professional.

    good luck!

  7. #7

    Re: Managing The Business My Welding Business

    Wow I read this and asked myself if I hAd wrote it LOL MY husband and I started out mobile while I was in nursing school and took for kids on this insane trip we have been on. I wrote a govt revolving loan to purchase a 250k propertyand I do it all and let me tell you I am losing my mind. Our home is right out the shop door. Eat sleep work play work n work together makes a marriage difficult at best. The other night husband was telling me invoice summaries in his sleep lol if I can help I am glad to or someone to scream at that knows why u are screaming

  8. #8
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    Re: Managing The Business My Welding Business

    Get a CPA pronto. Have them set you up with accounting software that they use. You or your office person just enter the receivables and payables. If you don't feel comfortable doing payroll, have your CPA's bookkeeper do it. My system is Sage Peachtree.

    Biggest piece of info I can give is keep a HUGE eye on the banking and cash flow. Have the statements and endorsed checks mailed to a secure location for your monthly viewing. They should reconcile with your books. I won't tell you how I know this, but it was devastating.

    Insurance. Have your liability policy cover you for dishonest employee. My agent walked in two weeks after an incident with a $50K settlement. This all had to do with bookkeeping.

    Welcome to the wonderful world of small biz.
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  9. #9
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    Re: Managing The Business My Welding Business

    Resist the temptation to "do everything, control everything." Start delegating responsibility ASAP while you still have time to sleep at night!

    I'd suggest hiring two part time welders. That way, if work isn't coming in, you won't force these people to quit their day jobs.

    Many people have suggested hiring a CPA or an accounting firm to handle expenses, taxes, and payroll. Let me second that suggestion.

    If you see your business continuing to grow, see your responsibilities increasingly as doing three things 1) managing employees, 2) selling your services to customers, and 3) working ways to improve your company. See your responsibilities shifting away from doing piece work in the shop. As the owner that is increasingly not a productive use of your time. Management and customer interaction are much more valuable to you, and to everyone else involved.

    Write a mission statement for your business.

  10. #10
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    Re: Managing The Business My Welding Business

    Quote Originally Posted by CherryBrosRC View Post
    Waging,
    I have a similar issue. I ended up purchasing QuickBooks contractor edition, it tracks everything. It still takes a lot of tome so I hire a bookkeeper to access my computer via remote access. They do all of the taxes and data entry for about $150 a month. They pick up receipts once a month. The only stuff I do is estimating and invoices. I can actually "work" a lot more now. Don't be afraid to outsourced that stuff that cost you money to do. I figured I lost several times over that $150 each month doing it all myself.

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    this is the guy you should be paying attention to. you don't need a cpa or theft insurance. you are too little to bother with that. set up an S corp, (it's cheap and easy.

    with yourself and 1.5 employees you can practically do it in your head; i'm not advising that you do that; but reduced to its simplest form you have 1. revenue 2. expenses 3. payroll and associated taxes.

    a 100 dollar tax program; turbo for business (llc's and s corps) and you can skip the accountant.

    if you continue to get bigger then add services as required, not before.

    work can disappear as fast as appeared, keep that in mind. there are a lot of businesses hanging on by a thread and they will use and abuse you if they can.
    Last edited by fdcmiami; 03-26-2012 at 02:04 PM.

  11. #11
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    Re: Managing The Business My Welding Business

    Quote Originally Posted by fdcmiami View Post
    this is the guy you should be paying attention to. you don't need a cpa or theft insurance. you are too little to bother with that. set up an S corp, (it's cheap and easy.

    with yourself and 1.5 employees you can practically do it in your head; i'm not advising that you do that; but reduced to its simplest form you have 1. revenue 2. expenses 3. payroll and associated taxes.

    a 100 dollar tax program; turbo for business (llc's and s corps) and you can skip the accountant.

    if you continue to get bigger then add services as required, not before.

    work can disappear as fast as appeared, keep that in mind. there are a lot of businesses hanging on by a thread and they will use and abuse you if they can.

    The man is swamped, wants to hire more help, can't keep up with the books, and you advise not to get a CPA. You also advise to set up an S corp.

    That's some pretty backward advise IMO. Why would you start up a corp with 1.5 employees? 10 is more like it.

    Sooner or later all legitimate and responsible businesses purchase liability insurance. It is a once a year occurance with year long protection.

    Most startups don't last 3 years. Why incorporate now??? That is just money down the crapper at this stage.
    Last edited by shovelon; 03-27-2012 at 12:43 AM. Reason: spellin
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  12. #12
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    Re: Managing The Business My Welding Business

    an s corp filing will cost him, in north carolina, less than one hours time with a cpa. it is a simple process and affords him the protection of the 'corporate veil' in addition to other things. where did you pull that ten employee number from, that's ludicrous an s corp is about shareholders, an s corp can have up to 100 shareholders or just one, employees?

    a lot of smaller operations are going with an llc; can't speak to that offhand but most accountants would advise against operating a business with employees as a sole proprietorship.

    i doubt that i would be taking advice from someone that let their bookeeper give them a fifty k haircut. lol. surprised the insurance company paid since you obviously breached your fidicuciary duty. you should stick to giving advice on dynasty welders. perhaps your cpa would like to come on and help the gentlemen out. lol

    http://www.secretary.state.nc.us/cor...ons/feebc.aspx

    usually a small operator will end up with a couple of accounts that provide most of the work and revenue. the balance will be the smaller come and go bus. one thing i would advise is never doing business against a check that has not cleared or money that is due or supposedly on the way. at some point you will either get bad paper or not paid at all, no point in compounding the problem by issuing your own bad checks or purchasing something in anticipation of a payment only to find that that payment won't be coming.

    http://www.irs.gov/pub/irs-pdf/f2553.pdf

    http://sbinformation.about.com/od/ow...orporation.htm

    http://www.secretary.state.nc.us/cor...orporation.pdf
    Last edited by fdcmiami; 03-27-2012 at 05:07 AM.

  13. #13
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    My business is an LLC with an S Corp designation. It has saved THOUSANDS in taxes through the first few years of being in business. I have a CPA do my taxes at the end of the year and he consulted the Lawyer that set up my business my CPA owns the bookkeeping business that I use. It didn't cost much to set up here in VA... miss a quarterly tax filling, it will cost you more. We have three full time employees beside my brother (and business partner) and me.
    A sole proprietorship is a risky proposition in today's law suit happy world in my opinion.
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    Last edited by CherryBrosRC; 03-27-2012 at 06:41 AM.
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  14. #14
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    Re: Managing The Business My Welding Business

    fdcmiami, as far as taking a haircut, you have to have hair to get one. The thief took advantage of the dip in the economy and had our shop working balls out for little gain. Now that the thief is gone, revenues have blossomed. The losses will be posted forward for the next five years. If you knew anything about the corporate tax code, you would know this. Guess not.

    CherryBrosRC.
    I am not against incorporating. The issue here is how to handle the books. I just think that takes priority. Incorporating will come. And I agree, if the business is greatly profitable, it will save thousands. But to rely on the corp to shield you against calamity and litigation alone is insane. General and Liability insurance is not just wise, but required on some projects. And it is not that expensive. And I agree, doing all the books yourself is stupid, especially if you can spend that time producing goods and profit.

    All things will come with profit.
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  15. #15
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    Re: Managing The Business My Welding Business

    Quote Originally Posted by fdcmiami View Post
    ...

    a 100 dollar tax program; turbo for business (llc's and s corps) and you can skip the accountant.

    if you continue to get bigger then add services as required, not before.

    ...
    Quote Originally Posted by fdcmiami View Post
    an s corp filing will cost him, in north carolina, less than one hours time with a cpa.

    Advising him to not hire a CPA is the worst advice I've heard.

    If you are going to go through the process of setting up the business structure as an LLC, LLP, LLC/S-Corp, etc...and are going to be consulting a CPA about the most beneficial structure than why not hire them to handle your taxes and payroll?

    There is no way that you can begin to keep up with the ever-changing tax codes and hoops that the IRS makes you jump through.

    Even if you aren't doing anything more than running as a Sole Proprietor it is worth it.

    I am a sole-proprietor and have a business CPA/EA. The little bit of money I spend with him is bar none the best investment I will ever make for my business and couldn't ever begin to handle what he does, in the timely fashion, or thoroughness in which it is executed.

    I used to have QuickBooks when I had my big shop and a few employees (was also an LLP back then) but now I have just a few, select clients and dropped the quickbooks for a simple spreadsheet that I made for cash-flow. No employees, just me and a couple of big accounts so not too much to keep track of.

    I can email my quarterly report to my accountant and he can advise as needed. No guessing or worrying that it wasn't handled properly.

    A good CPA is worth their weight in gold.

    Advising someone in business to not hire a CPA is the same thing as telling someone not to hire a professional welder but to just go to Home Depot and buy a machine and have at it.

    I expected more from someone who is so "Worldly".

  16. #16
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    Re: Managing The Business My Welding Business

    i suppose if you have done something enough it becomes less than it might be for someone else. last week i filed three 1120s's prepared by me. i use a .tax software, turbo tax, specifically for llc's and scorps. it does all i need and the spits out my k1's for my personal return.

    i am on a cash basis and in many ways my situation is like yours, i apologize for my remarks, the ones you are referencing too. after i read the post i could see they appeared directed at you but in fact they were not. sorry, i am actually an admirer of your work.

    as to the sole proprietorship. we do not know what structure the original op has in place since he has not been back but here is a thought. there is a reason that you rarely, unless the owner is ignorant of the potential pitfalls, will see a sole proprietorship with employees. in legalese it is known as the doctrine of respondeat superior. or vicarious liability. the fact that the owner can be held liable for the actions of the employee. the corp/llc provides protection of assets in the case of an employees negligence or possible criminal conduct during hours of employment. you have no employees, if you are married you can avoid some loss by changing the legal ownership of say, a home. that is the reasoning, and hardly mine alone, for the corp setup.

    it costs 87.50 in florida and a 150 annual fee. for the price of a drill, why wouldn't you.
    it also lends some cache to a new business; inc. and there are other benefits as well.

    if someone feels they are in need of a cpa and it gives them some peace of mind then great. the fact is, and i can tell this just from looking at your shop, that your tax return would be a few hours with tax software. however if the cost is inconsequential and you don't care to crunch some numbers then the money is probably well worth it. i meet people who have paid accountants and lawyers to set up their llc and corp, i do so frequently and i wonder, why? i am not talking about an IPO, i am talking about a small business like the op is putting together. it is really the easiest part, bringing in the work is the hard part.
    Last edited by fdcmiami; 03-27-2012 at 09:11 PM.

  17. #17
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    Re: Managing The Business My Welding Business

    ok, here would be the difference between a regular return for a small business and a situation like that of shovelon, after reading his post i had these questions in my mind.

    1. if you are the owner how does this happen?

    2. if the embezzler was prosecuted and a final determination of the money was ascertained, was any attempt made at restitution. if there was restitution how would that be entered, and when?

    3 again, if a determination was made as to the amount of money stolen did the company issue a 1099 in the name of the employee to the irs.

    4. was, and it seems it should have been, necessary to restate the earnings of the company for the period that the embezzlement was taking place.

    5. if they did then what did the do with the fifty thousand dollar insurance settlement; also, i would have to assume if there was a five year carryover that the fifty thousand only partially covered the loss.

    these are some questions that immediately came to mind when i read the post; and i have more but that's enough. in this circumstance i would be looking for some help at the cpa level. most often though it's pretty simple.

  18. #18
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    Re: Managing The Business My Welding Business

    Quote Originally Posted by fdcmiami View Post
    i suppose if you have done something enough it becomes less than it might be for someone else. last week i filed three 1120s's prepared by me. i use a .tax software, turbo tax, specifically for llc's and scorps. it does all i need and the spits out my k1's for my personal return.

    i am on a cash basis and in many ways my situation is like yours, i apologize for my remarks, the ones you are referencing too. after i read the post i could see they appeared directed at you but in fact they were not. sorry, i am actually an admirer of your work.

    as to the sole proprietorship. we do not know what structure the original op has in place since he has not been back but here is a thought. there is a reason that you rarely, unless the owner is ignorant of the potential pitfalls, will see a sole proprietorship with employees. in legalese it is known as the doctrine of respondeat superior. or vicarious liability. the fact that the owner can be held liable for the actions of the employee. the corp/llc provides protection of assets in the case of an employees negligence or possible criminal conduct during hours of employment. you have no employees, if you are married you can avoid some loss by changing the legal ownership of say, a home. that is the reasoning, and hardly mine alone, for the corp setup.

    it costs 87.50 in florida and a 150 annual fee. for the price of a drill, why wouldn't you.
    it also lends some cache to a new business; inc. and there are other benefits as well.

    if someone feels they are in need of a cpa and it gives them some peace of mind then great. the fact is, and i can tell this just from looking at your shop, that your tax return would be a few hours with tax software. however if the cost is inconsequential and you don't care to crunch some numbers then the money is probably well worth it. i meet people who have paid accountants and lawyers to set up their llc and corp, i do so frequently and i wonder, why? i am not talking about an IPO, i am talking about a small business like the op is putting together. it is really the easiest part, bringing in the work is the hard part.

    Any and all of that time that you spent filling out those 1120's and verifying info, checking numbers, etc...is time that I, and every other business person with a CPA, can and will spend either making money or handling some other aspect of the business that needs to get handled.

    You say that my tax return would only take a few hours...

    My CPA does all that I need him to do for $250 a year...ya, that's right $250 a year. I can make that up really quickly..in fact, could probably make that in about the time that you spent filling out those 1120's or trying to do my tax return.

    Trying to handle all the Tax code and BS on your own is penny foolish. For someone that seems to be so hung up on "corporate veil" business structures it seems ridiculous that you would suggest taking on the burden of taxes and payroll for yourself.

    Apparently Wagin has no problem with getting work and neither do I. What I can't make is more time and as others said before learn to delegate responsibilities so that you can move on to other things.

    Why would I attempt to do a job or task that will keep me from doing others when I can delegate that to a professional for a very reasonable (and tax deductible) cost that will be repaid faster than the time it would have taken me to do it myself.

    Not only will I generate more revenue for my business but I will let a professional do what they know how to and contribute to another small business by doing so.

    BTW, if getting work is the hard part of your business than I would have a serious look at your business plan and the quality of services you provide.
    Last edited by ZTFab; 03-27-2012 at 11:11 PM. Reason: spelling

  19. #19
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    Re: Managing The Business My Welding Business

    sorry, i did not mean to offend. lol i'm happy for you. and i apologize for the big words and abstract concepts. i didn't mean to address you in a professional manner, that was foolish and insulting to you obviously. guess i'll have to discuss this with someone that can add and subtract and stop slumming here.

    yes, you are a welder, no doubt about that. now why don't you go pull fingers and fart with your friends. as to work, it is more hobby than income anymore.

  20. #20
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    Re: Managing The Business My Welding Business

    No need to apologize.

    Too bad common sense isn't in that vast vocabulary of yours.

    Hobbies are activities pursued for pleasure. If bookkeeping/taxes are your hobby that is great but it is vastly different than the demand it puts on a business owner.

    ..and I will never apologize for being a welder. I grew up in a very scholastic based family with Grandfathers, Grandmothers, Aunts, Uncles and cousins that were Superintendents of school districts, teachers, and mentors. My father is also a tenured professor at PCC, Cal State LA, and USC.

    I chose the path I am on and am very proud of what I have made of myself, which you know nothing about.

    Keep your insults about my lack of culture, education, and global interests to yourself as you know nothing about me. If you can't handle a simple debate without resorting to personal insults or name calling than you lack more education than you claim that I do.

  21. #21
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    Re: Managing The Business My Welding Business

    Quote Originally Posted by fdcmiami View Post
    ok, here would be the difference between a regular return for a small business and a situation like that of shovelon, after reading his post i had these questions in my mind.

    1. if you are the owner how does this happen?

    2. if the embezzler was prosecuted and a final determination of the money was ascertained, was any attempt made at restitution. if there was restitution how would that be entered, and when?

    3 again, if a determination was made as to the amount of money stolen did the company issue a 1099 in the name of the employee to the irs.

    4. was, and it seems it should have been, necessary to restate the earnings of the company for the period that the embezzlement was taking place.

    5. if they did then what did the do with the fifty thousand dollar insurance settlement; also, i would have to assume if there was a five year carryover that the fifty thousand only partially covered the loss.

    these are some questions that immediately came to mind when i read the post; and i have more but that's enough. in this circumstance i would be looking for some help at the cpa level. most often though it's pretty simple.
    Answers:
    1. It happened because I trusted my employee to handle the finances. The books were altered to reflect disbursements in small amounts to vendors by checks written and signatures forged out of sight. This is as much as this employee's attorney knows and is all I can say about it at this time. An investigation is currently underway by the commercial crimes division of the Los Angeles Police Dept. They are swamped by the same type of crimes, so it will be a while until they make a move, if ever.

    2. No arrest has been made yet. The detective in charge is still compiling evidence. The statute of limitations has not expired for felony check forging. If any funds are recovered they will be handled by my CPA to determine if there is insurance refund due. A special account has been entered to deal with repercussions and expenses of this event.

    3. No, It is still to be determined if this is a case of tax evasion by this employee.

    4. That is correct. I should be so lucky. This would offset the losses forwarded probably, I don't know.

    5. Don't know at this point. That is what I have a CPA for. My best guess is that a theft has been substantiated. A claim filed. The $50k approved, issued and, signed for. Any funds that are returned will be entered into this account and dealt with later.

    This person was considered family friend for over 17 years. Thankful it does not affect ongoing operations.
    "Nothing welded, nothing gained."
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  22. #22
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    Re: Managing The Business My Welding Business

    Quote Originally Posted by ironlion View Post
    i would like to offer you a word of caution as far as the 1099 "EMPLOYEE"....CYA and make sure they fall under the guidelines of the IRS or you could be liable for back due taxes etc. on them, as well as you still MAYBE currently liable for workers comp claims if god-forbid one were to get injured on the job....the times of using the 1099 tactic to get away with starting up your small business are mostly long over but i will let you be the judge of that.
    here is a link to the criteria that needs to be met for 1099....
    http://www.irs.gov/businesses/small/...=99921,00.html
    i have been in your shoes but have had a 20+yrs head start on you and fully understand the headaches associated with owning your own business and trying to keep the lights on and keeping the payroll current while eating ramens and not paying yourself as you are waiting for the checks that are "in the mail" etc.
    honestly the rules have tightened up so much that it is hard to stay in the game especially while burning the candle at both ends. i would suggest finding an accountant that would come in once a week or every other week depending on how often you pay your guy(s) for a few hrs to do the payroll etc....its well worth the money in my book as my time is worth more to me and after all i am the guy doing the rest of the show and not a tax professional.

    good luck!
    Thanks for the link. The laws state If a workers actions are supervised, instructed or directed by you, the worker is not a sub-contractor but has employee status. Oops.
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  23. #23
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    Re: Managing The Business My Welding Business

    apologies for the lapsed reply time. as stated, I'm currently setting up with a CPA. I'm still a sole proprietor but have carried 2 mil. general liability and aigrette coverage, from inception. I have established accounts with vendors that handle logistics, delivery and billing, versus chasing supplies and materials myself. I have found a few, "on call", persons that will pick up and deliver work to clients. I'm considering hiring a couple of fabricator welders but will have to become a LLC and endure all the tax and comp. INS. hassles. My fear is if I go LLC and take on the added tax expenses and workmans comp...ect...Work may again fall off, and it will at times, and I have added uneasier overhead to my operations. I've heard many times of small business owners having to borrow form the bank just to cover payroll.
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  24. #24
    Join Date
    Dec 2010
    Location
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    Re: Managing The Business My Welding Business

    [QUOTE=wagin;979681I've heard many times of small business owners having to borrow form the bank just to cover payroll.[/QUOTE]

    That's the fact. Been in that jam many times. A bank LOC it what I did for many years.
    "Nothing welded, nothing gained."
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