Small business start up advice

[Joe]

The LLC is meant to limit tax and personal liability. I don't think there is much inherent liability in the wholesale produce business.

In this economy, I'd limit my start-up costs and start the business as a sole proprietorship. If it works and your business becomes profitable, then at that point, re-evaluate. Skip the lawyer bill and skip the insurance until the business is viable to the point where it is necessary.

There are tax benefits to an LLC when compared to a sole proprietorship, but you won't realize them unless you earn enough where taxes are an issue. From what I understand about an LLC, you have to put yourself on a salary - which can be an issue if you want to access your business money for personal use.

The biggest issue to worry about is extending credit to dealers. I don't know if dealers would pay C.O.D. or you would be extending credit. I've seen under-capitalized businesses fail because one dealer got into them for a lot of money, and then left them holding the bag.

[cheferson]

Originally Posted by Joe

In this economy, I'd limit my start-up costs and start the business as a sole proprietorship. If it works and your business becomes profitable, then at that point, re-evaluate. Skip the lawyer bill and skip the insurance until the business is viable to the point where it is necessary.


The biggest issue to worry about is extending credit to dealers. I don't know if dealers would pay C.O.D. or you would be extending credit. I've seen under-capitalized businesses fail because one dealer got into them for a lot of money, and then left them holding the bag.

Thanks Joe, that's what i was thinking as i've been reading through all the info on the web. I really don't need to spend much for startup. I have just about all i need. Also the farm to restaurant delivery service i want to join doesn't require insurance and there is no fee to join. I would be extending credit , i think they pay out bi-weekly.

Even in this %$%$%$%$e economy the local/sustainable food movement is going strong and continuing to grow! Ever gone to one of the 3 winter farmers markets? It's elbow to elbow most of the time. Also most the top local restaurants are all about this. They all love to feature sustainable locally grown foods on their menu. Some even have whole menus with locally sourced ingredients.