Reconnaissance!
By Brian Koscienski and Chris
Pisano
One of the more difficult things
about being regular working schlubs like us trying to step outside of our
preordained caste and start our own publishing company is finding time. There's
never enough of it to do what we need, to muddle through the regular day-to-day
activities such as work, pay bills, spend time with the family, pay bills, feed
the addiction to eBay, pay bills, do the chores, pay bills, etc... Then add to
the pile "small business start-up" and the pile becomes perilously close to
toppling over, crushing all beneath it. Jac fell victim to such circumstance, no
longer able to commit. Fortress was now down to three.
However, we bravely marched forward (to the beat of our own drummer, of course)
and other things were starting to come together for us. We formed a "to do"
checklist and slowly checked off each item as it became "to done." At the top of
the list was, "Come up with 'to do' checklist." That pretty much entailed
visiting a lawyer and harassing our CPA friend. We wanted to keep our time with
them limited, so we tried to answer our own questions first to sound like we
knew what we were talking about. Our first stop was to the local chamber of
commerce where we picked up a book entitled Starting a Business in
Pennsylvania. I doubt every state in the nation will have the same book, but
I'd wager that you could find something similar. Being the people person that I
am, I'd much rather sit down with someone to get information. And being the
cheap-o that I am, I'd much rather do it for free. Well, the Starting a
Business in Pennsylvania book helped, in the form of SCORE.
SCORE stands for Service Corps of Retired Executives. They are just like their
name implies, executives long since retired at the public's disposal to assist
in business workings. Free of charge. Interestingly enough, they're located in
the same damn building as the local chamber of commerce. But the service is free
and I'd be talking to executives, people who may have been in the same situation
we were. As luck would have it, laryngitis settled itself in the very day I had
the time and opportunity to visit with them. Ask ANYONE who knows me and they'll
tell you that me getting laryngitis is God's way of saying, "I'm sorry you have
to put up with this guy." Normally, I wouldn't have minded, except for the fact
that I'm a working schlub who doesn't have enough time. So, the louder I tried
to talk, the fewer audible words came out of my mouth. The particular gentleman
who met with me had not one, but two hearing aids. And the comedy ensued. You
don't need to be Karnak to see where this is going.
"Hi. I'm st_rting up a b_sines and w_s wond_ring where to start?"
"What?"
"I'm s___ting up a b___ness an_ wa_
won____ng wher_ to sta__?"
"What?!"
"I_ s_____g up a b______s a__ w__ w_____ng wh___ to st___?"
"WHAT?!"
"I_ S_____ UP A B_____ _ND W__ __NDER___ W____ TO __ART?!"
"Are you on drugs, man?!"
After some time, and my deciding to communicate via pen and paper, I got the
answers we were looking for. Even though the meeting cleared up some things,
there were still a few questions we needed to ask a lawyer.
Upon our first meeting with the lawyer, Chris and I quickly learned how monkeys
at the zoo must feel as patrons stare at them. As we cartoonishly shuffled
through papers looking for our research findings and subsequent questions, the
only possible thought he could have been thinking was, "These two knuckleheads
are starting their own business?" Once we calmed down enough to be mistaken for
human beings, Chris and I had one major question to answer: what business entity
were we going to be?
We gave a brief overview in a previous article, so we won't bore you with those
details again. But we had our choices narrowed down to General Partnership, LLC,
and S Corporation. After one of the most intense meetings of our lives (only
about 30 minutes, but sitting in a lawyer's office always brings out the "fight
or flight" reaction) and extensive note taking, Chris and I ran (literally) to
the nearest bar after the meeting's end. Luckily, it was just across the street.
After a jolly round of chiding remarks from both my future business partner and
the waitress about my proclivity toward drinking beer that requires some form of
citrus to be found floating in it, we reviewed our options.
A General Partnership is easy to form and easy to get money in and out of.
However, there is no liability protection involved whatsoever. According to our
lawyer, an LLC depends upon what state you're in. In Michigan, they're the
greatest thing since sliced bread (hey, he's a lawyer-- they're not known for
having the greatest clichés), but in Pennsylvania, they are run very similar to
Corporations. Although it's easier for the members involved to get money out of
a LLC, it still didn't offer all the liability protection. Plus, if it's going
to be run like a corporation, we may as well form a corporation, even though it
may be difficult getting money out. Let's not forget, Chris and I would be
shareholders, and just like being a shareholder of any other corporation, we
simply can't take assets whenever we want to. Just because you may hold some
shares of Wal-Mart doesn't mean you can walk out of the store without paying for
the merchandise and say, "I'm a shareholder. I own this." Those rent-a-cops hit
harder than you'd think and pepper-spray to the eyes doesn't feel as pleasant as
one might imagine.
So, it was decided! Before we hit the bottom of our first pitcher of beer, we
decided that we needed another pitcher. However, it was shortly after that we
decided to form an S Corporation. We wanted the protection. And thanks to the
"S" status, all of the profits or losses flow through the tax forms to our own
personal taxes. That means any money we earn gets taxed only once and (the more
likely scenario) any money we lose, we get to deduct from our personal taxes.
The moral of the story is-- if you plan on starting your own publishing
company, or any small business for that matter, take full advantage of the free
resources offered to you. Trust me, there are plenty of them. Start with your
local chamber of commerce and see what happens. Just make sure you clear a spot
in your working schlub schedule for a bought of laryngitis first…
Next Issue: "Struggle"
Brian and Chris reside in south
central Pennsylvania where Brian is often chased by angry villagers wielding
torches and pitchforks due to his uncanny resemblance to Sasquatch while Chris
can often be found in newspapers and magazines under the headline "Cro-Magnon
Man Found." Their obsession with writing is pretty thorough; their compositions
range from stories to novels to articles to comic books to poetry. They even
went so far as to start their own publishing company called Fortress Publishing.
Their main mission in life is to simply do what the screaming voices behind
their eyeballs tell them to do.
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