Barry's Accounting Services, Corp.
1852 Flatbush Avenue - 2nd Floor
Brooklyn, New York 11210
(718) 677-4006
E-mail:
clembarry@aol.com
 
 
Client Update - quarterly newsletter
 
   

 

Starting a Business

Starting a Business - Barry's Accounting Services, Brooklyn, NY "Pick a niche, and make it BIG!".

 

Building a passsive income base is no longer a luxury. It is a necessity in this constantly changing world economy and job market.

You can use your brilliant idea and start a new business and make it profitable under ANY economic condition. My clients have done that and they have become millionaires. How they were able to accomplished that have bedazzled some business professors and business start-up gurus; so keep on reading.

You can read my best selling book, "Sweet Success, knowledge & quick-skills.., by Clem Barry" on Amazon.

Data from several states in the USA and EU member states have shown that new businesses have been launched during Economic Recessions, Economic Recoveries, and Economic Booms; and new millionaires have been created during those times. During the world-wide economic recession in 2007-2009, over 30,000 new businesses thrived in New York. During COVID-19 crisis in 2020, new business applications in New York have increased by 45% and some new businesses have opened second locations. The result is quite similar in many States in the USA. In the EU, New SME's represents 25 percent of the businesses that are thriving during this crisis.

Why do some people venture out on their own?

1) They felt it was time to quit their job before they get trapped in an environment that was making them frustrated and unhappy; so they started or purchased a business and ventured out on their own and become very successful and happy.
2) They had found a niche and started a hobby to supplement their income. Their customers were happy with their product/service and they became too busy to hold on to their current job.
3) Some of them felt they had sufficient business experience, and an obligation to expand their family's wealth/net worth; so they quit their job, take over their family business, and expand the business operation/location.
4) Some of them were lay-off (their position was terminated/redundant) and they couldn't find a job no matter how hard they tried. Their only option was to start their own business.

How did some of them raised money to finance the venture?

1) They borrowed from their savings, severance pay, pension, inheritance, home equity, credit cards, and the cash value from their whole life insurance policies.
2)

They sold and pawned some of their assets or prized possessions.

3) They worked from home as independent contractors and bid for outsourced work from their former employers.
4) They formed partnerships and joint ventures with people in their industry who have the cash and were willing to take the risk.
5) They sold part of their business to investors/venture capitalists.

Everybody has a Brilliant Idea. What we care about, is their ability to convert their Brilliant Idea into a profitable and sustainable business; and take control of their own destiny(proof of concept). Hear it from entrepreneurs who have overcome obstacles/difficulties and had the courage, foresight, and discipline to execute their plan and make it BIG :-

#1)"I was happy with my job and the steady pay cheques I was getting. I didn't want to take the risk of starting a business and leaving my job. I was fearful of the unknown earnings potential and survival of a new business. Boy, was I wrong. My wife and I have been unemployed for several months and we couldn't find a job no matter how hard we tried; and the bills kept piling up. We attended an on-line business presentation, and we used our credit cards to set-up an on-line business from home. We are following a blueprint with help from an advisor/mentor who was assigned to us. Revenue for the first year is 325,500 pounds. We are projecting revenue of 500,000 pounds in the second year".-W. Foley (London, UK).

#2)"I resigned from my job because I was tired with the corporate politics. I used my savings and severance pay to start and grow my business. Starting my company and having my clothing line prominently displayed in stores in New York, Miami, Los Angeles, Paris, and Milan is a dream come true. COVID-19 didn't hurt my business badly because I operated agressively on-line. Gross sales dropped slightly from $3.5 million to $3.12 million ($380,000 less).The economy is on the upswing and I am swamped with an influx of repeat orders in addition to new purchase-orders from trade shows I had attended in previous years. I am focus on pushing my best selling products. I have developed a new system that fits the new economic activities and my short-term sales projection is $4million. I am happy and healthy. My pension plan is doing great; and I feel financially secure with the cash reserves that I have invested wisely.

I could remember my Grandma saying to me, "Get smart, Girl. Get your own. It doesn't matter how small it is. Other people thing doesn't belong to you, no matter what they promised you. Clever people will promise you the moon although they know they can't deliver the moon to you. Rise above those tomfoolery/gimmickry and you will do better on your own". Sonia, New York.

#3)"Why is everybody so critical and negative when someone quits a full-time job to start their own business? I could get fired from my job anytime, so why should I continue to build somebody elses business, and help them secure their future, when I can start and build my own? I've seen what had happened to other people. When I started my business, my friends thought I was insane to quit working for a big company and struggle with a little business. They stayed away from me because my little business was struggling for quite a while. My best friends were the biggest hypocrites and back stabbers. Fast-forward to 2020 and COVID-19, my business gross $1.6million, an increase of $225,540. The appraisal value is $4.8 million ($1.6mil. x 3). My little business has make me a multi-millionaire and I am very excited about that. This is just the beginning. My hypocrite friends lost their jobs with the big companies; and they want to jump on my bandwagon. I told them to get lost. I'm happy in my little business. It had never deceived me, betrayed me, abandoned me, and stabbed me in the back. America was built on small businesses. Without small businesses many cities, communities, and towns will become Ghost Towns and Cesspools for crimes. Small businesses are the backbone for economic development and prosperity. Check the SBA statistics in any progressive state. Also, take a look at the dismal economic conditions in cities and communities, in countries that ignored giving incentives to people to start small businesses. Lessons learned!!"Jane, New York.

#4)"I was tired of living in the shadow of my bosses. I was doing the work and they were getting the credit and the big bonuses. I quit my job and used my savings and gifts from my family to started my business in the same industry as my former employer. I am finally getting the recognition and compensation that I deserve. In 2020, and during the period of COVID-19 my business gross $1.8million. I get to keep a net profit of $442,700 after tax. That is a far cry from my gross salary of $120,000 from my former employer. My Pension, investments, and other benefits that I set up for myself are doing great. I am watching over them like a hawk. Sometimes, you have to do whatever it takes to get whatever you want; or you can stick around and get bamboozled with great promisses while they are slowly pushing you out. I understand psychology".Anna, Los Angeles, CA.

#5)"I sold my company for $5 million. I stayed on as the CEO and the Chief Operating Officer to accelerate the transformation and growth of the company, and to enhance efficiencies as it satisfies pent-up demand.  I'm receiving a salary, bonus and medical. I am a prudent and calculated risk taker so I have invested $3 million at a modest/conservative fix interest rate. My annual return on that investment is $165,000. I am earning this return without doing any work, and when I am asleep. My advice to everybody who wants to start and build a profitable business is to stop dreaming. Don't waite until your back is against the wall. Take action now. Take the risk, stay focus, do whatever comes naturally and sensible, seek professional help or outsource some services so that you don't have to overwork, manage your business expenses and your lifestyle prudently; and you will become very successful overtime(NOT overnight). Fortune favors the bold and the brave".Jonathan, Los Angeles.

#6)"I used my savings and I pawned my jewelry to start my business. I have paid back the pawn shop and got back my jewelry.  My business has provided me with a great lifestyle, investments, and recognition that some people could only dream about. I'm happy I didn't listen to those naysayers. Many of them are broke today."Dan, New York.

#7)"Wow! what a struggle I have been through. I lost my job, and my severance pay and unemployment ran out. I had no medical insurnce. I got my lights turned off and my house went into foreclosure. I cash-out my pension and rented a small room for $175/wk while I hustled selling my product online and get it on store shelves. Thanks to the side hustle/business I started when I had a full-time job. It was just a hobby. Last year it is grossing $500,000. I am comfortable with the influx of repeat orders and new orders I am receiving from my branding exercise and distribution networks. My realistic projection for this year is $1.2 million. I have savings, medical & dental insurance, and a 401-K. I moved into a nice apartment, and I plan to buy a house soon and invest my cash reserves wisely".-Gloria, Seattle, WA. 

 

Question:- "Brilliant ideas have built great companies; so why it's not always given priority when someone is starting a new business?"

Answer:- Let's keep it real. Everybody has a brilliant idea. Crooks have brilliant ideas too. Banks and Investors don't know if an applicant is a scammer or if s/he will be able to turn a brilliant idea into a new and profitable business. That is high risk without a shred of tangible evidence that a new business will be able to create a strong demand and survive for many years after it is launched. Therefore, they will only invest their money after you have invested your money and the new business is producing a steady flow/stream of revenue for at least 1 to 3 years. That is called the Proof of Concept. That is how they know your brilliant idea is not a fluke, a pipe dream, wishful thinking, or a figment of your imagination.

Question: "My business did not have income during the year it opened/started, but I paid for renovation, rent, electricity, telephone, and advertising. Could I deduct those expenses if the business did not generate income?"

Answer: You should plan to deduct those expenses as Start-up costs under section 195, in the year the business generates income. On January 25, 2021 the Tax Court agreed with the IRS that expenses a business owner incurred was not deductible under section 162 because the business didn't generate income. The Tax Court thus denied deductions for the costs associated with this inactive business.(Jan. 25, 2021, William Bruce Costello and Martiza Legarcie V's Commissioner, T.C. Memo. 2021-9, Judge Halpern).

 

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