Personal Finance lessons

Lessons 75-85

Business plans

Everyone needs one. You can go to,, and others, for a business template. A few things you need are:

1.1 Objectives
1.2 Mission
2.1 Company ownership
2.2 Start-up summary

A full list is on

Entrepreneur spotlight: John Mackey

John Mackey was the founder of Whole Foods. He took a more capitalistic, and libertarian world-view. He loved the works of Ludwig Van Mises, Friedrich Hayken, and Milton Friedman. He was a big opposer of ObamaCare, saying:

“Technically speaking, it’s more like fascism. Socialism is where the government owns the production right. In fascism, the government doesn’t own the means of production, but they do control it. That is what is happening to our health care programs and these reforms”

John Mackey

He reduced his own salary to $1 a year, and set up an emergency fund for employees having personal issues. He co-founded “Conscious Capitalism”

Mackey says “Every Business has the potential to have a higher purpose than just making money. Not that there is anything wrong with making money, but that doesn’t have to be its purpose”

Basic Corporate Forms

Catagorys of ownership.

-Sole Proprietor
-Single ownership
-Direct control
-Unlimited liability
-Vast majority of the firms in the US are sole proprietors
-Can have problems raising capital

-Two or more co-owners
-Joint unlimited liability
-Often doctors in a practice, or accountants, or lawyers
-Fewer problems raising money

-Divided ownership into shares
-Limited liability
-Fewer problems raising money
-Continuity. Firm doesn’t die with share holders

Types of Firms

-Residential claimant exists

-No residential claimant
-Churches, Charitys, Country clubs, Colleges

Publicly owned
-Often have monopoly power
-Loss of profit motive
– Utilities usually

Sole Proprietor
-Very common
-You get all profits
-You’re responsible
-Simple. Often not expensive
-Licence or permit might be needed
-Banks are reluctant

LLC = limited liability companies

-LLCs have some advantages of a corporation
-Owners of an LLC are called “members”
-Profits and losses pass through to the members
-State laws very

Starting a Business: Part one

Once you’ve created a business plan, and chosen a business structure it’s time to start the other aspects

A few steps from

-Do you have a company name?

-Is that name available?

-Is the URI available?

-Find the right state to register in

-Have a logical domain name

-If you say the address, will people know how to spell it

-Check if you have the right permits

Starting a Business: Part two

Do you need an EIN? All c-corps and s-corps need one, all general partnerships and limited partnerships need one, while some one-membered partnerships need one LLCs can get by with using their own social security number for IRS purposes if your LLC will higher employees-or if it will have multiple members-you need to apply for an EIN or the LLC

Zoning restrictions
-Limit the kinds of business in residential areas
-Limits signs, storage, parking
-Limits noise or smell
-Limits hazardous materials
-Limits Visitors/employees

Sales Tax

Is it a business or a hobby

-Has the taxpayer changed methods of operation to improve profitability?
-Does the taxpayer have the knowledge needed to carry on the activity as a successful business?
-Has thee tax payer made a profit in similar activities in the past?

Business bank accounts

When you open a bank account for your business you should open it in your DBA name or your corp name. If you have a business tax number, use that instead of you social security number.

Even if your business is incorporated in your name, without a DBA, it might be a good idea to have a separated account so that you can keep track of you business finance more easily.


The bookkeeping methods involved in making a financial record of business transactions and in the preparation of statements concerning the assets, liabilities, and operating results of a business.

The task of recording the amount, date, and source of all business revenues and expenses.

A written record of a transaction.

A physical collection of related financial information, such as revenues, expenditures, accounts receivable, and accounts payable.

A collection of financial information.

A formal written summary of unpaid invoices.

Proof of payment.

-Balance Sheet
A statement listing a business’s assets, liabilities, and net worths, or equity.

-Net Income
Profit after expenses reduced each year.

Getting fired or quitting

Being fired does not mean it was a waste.

You need to say to your boss in a sincere “thank you for the opportunity” then ask for a recommendation

The employer is not the employees lord, but he is the buyer of a service. Gary North said that being fired twice in one year was the best thing that ever happened to him. Getting fired can be bad, but you ned to commit. This is a big economy. Someone is looking for you.

Panic is never a wise response. Put in a few hours of your day aside to look for work.


Have a thought threw resume. Change it to suit each job application. Make sure most of the info is at the beginning. Offer being an apprentice or internship. Don’t just think of the money, think about the people and experience. And lastly, be polite when fired it could get you a reference or a job.

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