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Hey… just got back from city hall, paid my business license for the year.
Wait, let’s back up. You have probably been reading all sorts of rants about “treat your blogging as a business!!!”
But that’s the extent of it: rants. No actionable information. Nothing about how to actually operate as a business. NO NUMBERS! As usual, I don’t have any interest in ranting, but I’ll be happy to let you take a peek into one of my actual business processes.
So let’s be about it.
This Website In A Weekend thing isn’t free for me.
You might not be paying anything at all to read Website In A Weekend. But I’m paying for the privilege of presenting it.
As soon as I:
- Offer an affiliate link, say for Bluehost, I need a business license.
- Offer a product for sale, perhaps a blog post ebook or wordpress whitepaper, I need a business license.
- Offer a service, perhaps doing an SEO due diligence, or a totally custom designed website using WordPress and Thesis, I need a business license.
If you do any of the above, you probably need a business license too.
Let’s look at some real numbers.
Business license is 180 bucks:
49 cents a day doesn’t sound too bad, does it?
Maybe, maybe not.
Let’s see what that is in terms of Whitepapers. Last I checked, Paypal takes a percentage and $0.34 off the top of the sale. I don’t recall the percentage, let’s make it easy:
I need to sell 109 whitepapers per year, say about 9 per month, just to cover my business license. Bummer. And that doesn’t include taxes due. Bigger bummer. Probably need to sell about 140 per year to cover taxes.
So there’s the reason I’m not writing very many Whitepapers: There’s no good market for them. Given it takes me roughly 2 (full) days to produce one (anyone who has purchased one will testify to the quality), my return is too low. I could cut the time down to 1 day after the next half dozen, but that’s still too long.
Being more specific:
-
I like “perfection.” Only I don’t call it “perfection.” I call it “professionalism.” These Whitepapers are daggone close to perfect; they are the same quality as reports I submit to clients in my consulting business.
In fact, I use them myself.
- There’s one more thing here, it’s really important but I left my email open and got distracted. You know who you are.
Aha… Keith’s comment just clicked it in: My conversion rates on the Whitepapers are very good, exceeding 10%. This means I’ve sold about as many as it’s reasonable to sell given my traffic and list size. I need to either write a lot more of them (as Keith suggests), or grow traffic, a lot.
Which is a pity, because I really like the format, and I would love to write 2 or 3 whitepapers per week.
Tell us about your business. How much is your business license? How are you covering it?
[Update: I just started a public business spreadsheet which I'll be adding to over many future articles. If you would like to have your business and link, leave a comment and say so.]
I currently have more than one company, but am in the process of consolidation them all into one “parent” (Logix Media Group) which I hope will reduce my costs for all of my sites over the long haul.
An LLC in this state is roughly $200 per year. Then add other fees like local business licenses, accounting fees, (accounting software if you do most of it yourself and then just turn it over to a CPA at the end of the year), software upgrades, internet, phone, fax, paper, ink, etc… The list goes on and on.
Maybe you should re0figure how many whitepapers you need to write! :)
.-= Keith´s last blog ..Community VS SEO =-.
LLC is $800 + $75 in processing fees in California.
This was just the city license.
So, yeah, as soon as I post something for a buck, I’m due a grand in fees.
This is why, ultimately, free will not last. Free has no value.
.-= Dave Doolin´s last blog ..Doing It By The Numbers – Blog Post Engineering =-.
Interesting discussion. Here in the UK it’s a little different. I’ve had a change of heart about Dim Probs (GAB is what I love doing so I’m working to build that into something so amazing I’ll be worth every penny of a small salary) but before I did so, I spoke with my local business manager about getting started. I could have had 12 months free banking with the price going up to £5.99 per month after that. So having first started writing this comment thinking that we don’t have the same issues here, thanks to the power of online currency convertors, I know that £5.99 per month is equal to about $110. Add in business insurance (never got as far as getting a quote) and I imagine costs here are pretty similar.
Before my change of plan, my way of covering these costs was to use the free 12 months banking to build the business up to prove that I could make a profit. After that, I’m out ;)
.-= Eleanor Edwards´s last blog ..Thoughtful Thursday: This is why I love my job! =-.
This is really good.
In fact, you just gave me an idea Eleanor…
https://spreadsheets.google.com/ccc?key=0Aq9wab8Z3WTWdDV3QUphT0pDU095QlFSZDdPbWpBTlE&hl=en
.-= Dave Doolin´s last blog ..Stop Crying and Do It! =-.
I guess I’m lucky here in Australia. You can register as a Sole Trader and get an Australian Business Number which lets you trade under your own name for free.
Last time I checked registering for an actual business name is only about $160AUD (around $180US?)
.-= Josh Kohlbach´s last blog ..How Are You Adding Value? =-.
I think there’s a county fee here for registering what we call a fictitious business name. Something I need to check into shortly.
A vast number of California businesses “offshore” their business headquarters to Nevada because of the cost of doing business in California. As it turns out, California also has a unitary tax, so no matter where your business is based, you still have to pay almost the same amount if you trade in California. Basing in Nevada probably saves a lot of other costs, I’m not big enough to make it worthwhile. Yet.
.-= Dave Doolin´s last blog ..The Fear – And Consequences – Of Failure =-.
The little hill is pricey. My SF business license is only $25 per year.
I need to get my Fictitious Business Name worked out too. I started the process a while back, but never followed through. More hoops for the DBA than the license.
.-= Sean *Deacon* Neprud´s last blog ..Dispatch: The Living Deadline and The Sea Of Lonely =-.
Don’t say that too loud, or the Stupes will raise it a couple of hundred bucks!
.-= Dave Doolin´s last blog ..Road Ahead – David Risley got me to spill the beans =-.
Holy Moley! Your business license is expensive! My county and city business licenses together were only $55. In Tennessee, we don’t have a state business license.
I am at a point now where I need to pony up the $300 to incorporate. I technically don’t have to as I run as a sole proprietor but I will for legal reasons.
Yeah, you need to incorporate.
Need anyone for board of directors?
Heh…
.-= Dave Doolin´s last blog ..Doing It By The Numbers – Blog Post Engineering =-.
You are high on the list. One funny tidbit, my 3 year old is listed as partial owner and HR manager on my business. In Tennessee, if you are sued the minor is not liable so in the event I was sued I wouldn’t loose everything.
*mutter* First freelancing tutor… now you… and conscience…
Guessing I’ll actually have to do something about this now. I think what my tutor said was that taxes are paid two years behind the year you’re currently on (that’s a little bit of a load off) but I’m not sure about the cost of the licence itself yet. Will have to get back to you.
When I find out you could add me to your spreadsheet though; Scotland ;)
.-= Heather´s last blog ..Results and some Waffle =-.
You’re on it, check your email.
.-= Dave Doolin´s last blog ..Building Outposts: Amplify Your Blog Post in Seconds =-.
Already got it, I’m lurking ;)
.-= Heather´s last blog ..Results and some Waffle =-.
And don’t forget the tax on your equipment and facilities once they learn that you are actually a business. It is funny how tiny El Dorado County (pop 75,000) goes after my wife’s business where it was too small to worry about in Los Angeles County(10 million ).
.-= Ralph´s last blog ..Multilevel Marketing, Network Marketing is an opportunity worth study =-.
Sort of like a speed trap: they’ll get you any way they can. Where are you at up there? I was through Angels Camp a couple of months ago.
.-= Dave Doolin´s last blog ..The Fear – And Consequences – Of Failure =-.
Highway 50 just past the Sacramento County line where the foothills start. Where is Angels Camp?
.-= Ralph´s last blog ..Rewind- How I found my niche and what I am doing about it. =-.
Nice post Double D! Titillating as always, and a nice (TRUE) remark about how noone gives facts and actionable figures etc, so it was quite interesting actually. Made me do a little research of my own, and here’s my FYI from an international standpoint.
In Sydney, Australia:
It costs around $150 for a yearly business license for a sole -trader or single entity. This covers the insurance side of things and allows you to have an ABN (Australian Business No.) which you cannot trade without. However, if you want a full business license(ability to trade publicly etc) then the costs are $500 per year. Yes this is in AUD but lately that’s almost the same! (used to think that was awesome until my Clickbank cheques started shrinking LOL!)
.-= Alex´s last blog ..MLM systems designed (to leave you) in tiers. =-.
You want on the spreadsheet too?
I’d be happy to add you.
I’m planning more articles like this, the numbers can go on the same spreadsheet.
.-= Dave Doolin´s last blog ..Stop Crying and Do It! =-.
Yeah for sure mate, I assume you are referring to the figures? If so would you like me to get a bit more specific and provide more information? The above was a quick overview of costs based on 20 minutes of Googling.
.-= alex´s last blog ..MLM systems designed (to leave you) in tiers. =-.
Sure, knock yourself out. I’d like to make that spreadsheet public and get it indexed. Make sure you add your link.
.-= Dave Doolin´s last blog ..Doing It By The Numbers – Blog Post Engineering =-.
It’s done by state here in Australia too – I don’t know what state Josh is in but Alex is in New South Wales, Australia.
Here in the state of Victoria, in the land of Oz, it costs AU$81.80 to register for a business name – registration is for 3 years, and it’s AU$58.50 to renew that name every 3 years. A business name is only needed if you’re trading under a name which is not your legal name or an obvious derivation of your legal name (eg with middle name skipped, etc.).
All Australian businesses also need to register for an ABN (Australian Business Number) for tax purposes but that’s free.
There’s no general license needed in any state as far as I’m aware, although certain specific (usually regulated) business types need specific licenses.
Absolute minimum costs for a business here would be zero, assuming you ran it under your own name and used your regular bank account (hence: no extra fees). I’m about to open a business bank account which will have about $5/month worth of fees.
I get in income from my Zazzle gear sold on No Pity City and from affiliate links on all my websites but most profitably on ATMac.
Cheers,
Ricky
PS
Spreadsheet = yes please. Put ATMac :)
.-= Ricky Buchanan´s last blog ..Speak It! Keyboard-based Text to Speech for iPad/iPhone =-.
PS
I did hire an accountant as a one-off to teach me how to do my own accounting. I could have learned it from a library book or internet information but it seemed easier to just ask somebody who already knew! So I do it myself now but had a one-off start up cost of about AU$100 for the accountant.
.-= Ricky Buchanan´s last blog ..How Do I Use An iPhone Web App? =-.
I added you to the spreadsheet.
.-= Dave Doolin´s last blog ..Definitely up to no good (no blog post today) =-.
Nice idea and some bloggers think that 180 bucks/year is too expensive but if they divide in 365 days, each day is affordable and cheap :-)
.-= Tinh´s last blog ..Premium Hosting from Expressin.net & Yamidoo PRO from WPzoom =-.
There are probably a lot of “unregistered” businesses out there. I’ve missed this out actually and should inform myself better about to treat this. For the time being, no fees yet. At least here in my side of the world.
.-= DiTesco´s last blog ..How Do You Manage Your Business? =-.
Honestly never even thought of this. Guess I should look into it, thanks.
.-= Linda Dobson´s last blog ..Miraclesuit Swimwear – A Story =-.