Entrepreneur wants to know options for finding startup funds.

QUESTION.
I would like to get advice on where I should consider going to get funds to start a business.

RESPONSE.
A good place to start would be YOUR bank account. The next best place would be borrowing against the equity in your personal residence. Then, of course, you could borrow funds from family and friends. Another alternative is to find business partners who have funds. One aspect of this is doing a "private placement." These methods of obtaining startup funds are the ways for new businesses to get started.

If you already have a going concern, then your business can hopefully obtain a line of credit from your bank. Your business can apply for a small business loan possibly backed by the SBA. Maybe there are government grants your business might qualify for? You could also seek funds from investors. Consider doing a private placement or getting a venture capital firm to consider investing in your business.

Consider taking a look at the following links. See

Financing Your Small Business & Angel Investors

Books on Venture Capital

Books of Government Grants

I hope my comments are helpful to you. Good luck! Regards, -Jeff

Jeff Lippincott
SCORE.org Counselor
Princeton, NJ
scoreprinceton @ aol.com
www.scoreprinceton.org
www.jlippin.com

Should a commercial painter charge sales tax on his labor?

QUESTION.
About two months ago I started a new business doing paint jobs; I'm a painter. Did my first commercial project and I’m not sure if I have to charge tax. Any help would be appreciated.

ANSWER.
There are all kinds of taxes businesses owe. The two main ones are income taxes and sales taxes. But sales tax is only collected (and owed) when you sell a product, i.e., a prepared meal at Burger King, a picture from a gallery, or a book from Amazon.com. A service business on the other hand does not collect sales tax because services are taxed under the income tax laws. When a lawyer renders legal services he does not collect sales tax. When a barber performs a haircut for a customer he does not charge sales tax. And when a commercial painter paints a building (he is performing a service) and he does not charge sales tax.

Now if you sell your customers the paint and materials you use to perform your services, you will need to collect sales tax on those items. Paint and materials are products that can be sold. But if you use the paint and materials during the performance of your painting services and do not sell them to the customer, then you collect no sales tax on their value. You will just expense the paint and materials as part of your cost of doing business.

I hope my comments are helpful to you. Good luck! Regards, -Jeff

Jeff Lippincott
SCORE.org Counselor
Princeton, NJ
scoreprinceton @ aol.com
http://www.scoreprinceton.org/
http://www.jlippin.com/