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Expenses in starting a LLC...
Posted on 6/20/12 at 11:15 am
Posted on 6/20/12 at 11:15 am
The wife and her two sisters are starting an LLC that would be in the baby boutique classification. The main disagreement that has come up is whether or not to do a store front immediately. They have zero cash and all start up expenses would be based off of a loan that sister B wants to take out. (Same one that is pushing the storefront)I am trying to convince sister B that they are going to lose their asses if they jump into this with no concrete plan, no clientele, no suppliers lined up, and not even an agreement with what exactly is going to be sold. (They do have a good idea on the products, it's just not finalized) Being it's family I don't want to just come out and say, "don't be an idiot". I want to break it down where she can understand that the expenses go far beyond just monthly rent, utilities, and material for the things they will be making by hand. Anyone that has experience with an LLC care to give some good advice?
8
Posted on 6/20/12 at 11:25 am to Mr. Wayne
No one is going to loan them 100% so you don't have to worry
eta: and they will need all that stuff you listed and then some to get an 80% loan on any assets they buy
but she is in fact an idiot
eta: and they will need all that stuff you listed and then some to get an 80% loan on any assets they buy
but she is in fact an idiot
This post was edited on 6/20/12 at 11:37 am
Posted on 6/20/12 at 11:34 am to Mr. Wayne
quote:
The wife and her two sisters
can you post some pics of their asses so when they lose it, i can look around?
Posted on 6/20/12 at 11:51 am to yellowfin
While that seems to be the case , she and her husband have excellent credit and I had to just stop them from actually taking out the loan. (bank was in fact granting it to them) She is not even taking into account shelves for the store, cash register, credit card machine, even the freaking open and close sign. I am suggesting they start off by selling the products they are making for the time being and once they have that rolling, look into a building and buy/resell products. I understand it doesn't always pay to be conservative, but the jump in blindly strategy doesn't exactly scream success to me.
On a side note: Sorry no arse pics. But my wife's is the nicest if that helps...
, she and her husband have excellent credit and I had to just stop them from actually taking out the loan. (bank was in fact granting it to them) She is not even taking into account shelves for the store, cash register, credit card machine, even the freaking open and close sign. I am suggesting they start off by selling the products they are making for the time being and once they have that rolling, look into a building and buy/resell products. I understand it doesn't always pay to be conservative, but the jump in blindly strategy doesn't exactly scream success to me. On a side note: Sorry no arse pics. But my wife's is the nicest if that helps...
Posted on 6/20/12 at 11:52 am to Mr. Wayne
Telling her "don't be an idiot" now is better than telling her "that's why you're filing bankruptcy" in two years.
BTW, all this has nothing to do with starting an LLC. They're starting a retail business.
BTW, all this has nothing to do with starting an LLC. They're starting a retail business.
This post was edited on 6/20/12 at 11:53 am
Posted on 6/20/12 at 11:57 am to VABuckeye
quote:
BTW, all this has nothing to do with starting an LLC. They're starting a retail business.
Correct.
Starting an LLC in Louisiana requires a form and $100 I believe.
I could start one right now if I felt like it.
Posted on 6/20/12 at 11:59 am to Teddy Ruxpin
It's $70 actually
Posted on 6/20/12 at 12:00 pm to VABuckeye
I realize that. They are just setting the retail business up as an LLC Partnership. I'm trying my hardest to list facts of why they are doing it wrong without calling them r-tards.
Posted on 6/20/12 at 12:05 pm to Mr. Wayne
they must be doing a home equity loan or something like that which is also idiotic
Posted on 6/20/12 at 12:08 pm to Mr. Wayne
She is crazy to do this without a well thought out Business Plan. She should contact her local SCORE. If you are in Baton Rouge, they have a workshop on June 30th, "Starting and Managing Your Business." Here is there web site. They have chapters all of the USA.
LINK
Edit: I copied this from the web site
Starting and Managing Your Business Seminar
When
Jun 30, 2012
8:00am - 4:00pm CDT
Location
7249 Florida Blvd.
Baton Rouge, LA
This is an all day seminar consisting of a faculty of business specialists in their fields. Topics include Introduction to the business plan, Business taxes, Legal aspects of your business, Technology for business, Advertising & Marketing, Insurance necessary for your business, Banking Requirements and Insurance required for your business.
LINK
Edit: I copied this from the web site
Starting and Managing Your Business Seminar
When
Jun 30, 2012
8:00am - 4:00pm CDT
Location
7249 Florida Blvd.
Baton Rouge, LA
This is an all day seminar consisting of a faculty of business specialists in their fields. Topics include Introduction to the business plan, Business taxes, Legal aspects of your business, Technology for business, Advertising & Marketing, Insurance necessary for your business, Banking Requirements and Insurance required for your business.
This post was edited on 6/20/12 at 12:11 pm
Posted on 6/20/12 at 12:11 pm to TigerAlum1982
She is actually meeting with one of these organizations in Lafayette today. I am hoping and praying they set her straight/laugh her out the building.
Posted on 6/20/12 at 12:20 pm to Mr. Wayne
So who exactly is taking out the loan? B or the partnership?
Posted on 6/20/12 at 12:56 pm to reb13
Sister B in her own name which is all fine and dandy. My issue is them getting into an expensive lease and the business failing almost immediately due to lack of funds and a proper business plan. That would be on the partnership, not Sister B who is pushing so hard for the store front.
Posted on 6/20/12 at 12:57 pm to Mr. Wayne
There is so much fail in this.
Do they have any sort of track record with their products?
Do the "partners" have any sort of agreement?
With the amount of planning you've conveyed, it's not a matter of if they fail, but when.
If the loans are in her name, how are the "partners" liable? I surely wouldn't let your wife sign a lease with this crew.
Do they have any sort of track record with their products?
Do the "partners" have any sort of agreement?
With the amount of planning you've conveyed, it's not a matter of if they fail, but when.
quote:
Sister B in her own name which is all fine and dandy. My issue is them getting into an expensive lease and the business failing almost immediately due to lack of funds and a proper business plan. That would be on the partnership, not Sister B who is pushing so hard for the store front.
If the loans are in her name, how are the "partners" liable? I surely wouldn't let your wife sign a lease with this crew.
This post was edited on 6/20/12 at 1:01 pm
Posted on 6/20/12 at 1:08 pm to CoolHand
quote:
If the loans are in her name, how are the "partners" liable? I surely wouldn't let your wife sign a lease with this crew.
Based on this alone it sounds like they're doing this crazy wrong. Is sister B going to take out the loan and then loan those proceeds to the LLC? Would she invest it in the LLC as equity? what kind of collateral is she using to take out the loan?
Posted on 6/20/12 at 1:08 pm to CoolHand
quote:
If the loans are in her name, how are the "partners" liable? I surely wouldn't let your wife sign a lease with this crew.
Exactly what I was wondering. Is she loaning it to the partnership or is she making a capital investment? How do they share the profits and losses? Who will make the next "loan" when the time arises? All these things need to be figured out BEFORE you get a loan.
Posted on 6/20/12 at 1:09 pm to Mr. Wayne
your wife needs to stay far far away from this
Posted on 6/20/12 at 1:10 pm to GeauxColonels
quote:
Based on this alone it sounds like they're doing this crazy wrong. Is sister B going to take out the loan and then loan those proceeds to the LLC? Would she invest it in the LLC as equity? what kind of collateral is she using to take out the loan?
Beat me to it
Posted on 6/20/12 at 1:11 pm to yellowfin
quote:
your wife needs to stay far far away from this
If she likes her family at all, yes. But if she's a cruel greedy bitch then she should jump on this no risk situation, NOW.
Posted on 6/20/12 at 1:19 pm to reb13
quote:
Exactly what I was wondering. Is she loaning it to the partnership or is she making a capital investment? How do they share the profits and losses? Who will make the next "loan" when the time arises?
The lease agreement would be in all 3 sisters names, do not want. She is taking out the loan for initial funds. Loan payment would be taken out of income first, then they have a profit share set up based on amount of hours being worked. (Profit share is the only plan that I think is well thought out, but there won't be any profit so it's a moot point) I am trying to encourage them to run the business out of our homes for now, selling the products they make as they are getting good feedback on them. My wife graduates in December and then can invest all her time to the business. I am suggesting they wait at least until that time so they can be getting their name out there, research into additional products (whether they are making them or buy/resell), put some cash aside, put together a well thought out business plan, and possibly attract an investor or two.
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