Farm Dreams

Homesteading, Organic Gardening, How to Farm, Preparedness, Self-Reliance

Business structure

We're just getting started in homesteading, but with one of us still working in the corporate world to pay the bills. We bought a 30 acre farm with perimeter fencing (in need of repair), a barn (in need of repair), a pool house (with a garden where the pool used to be), and a rent house (in need of paint and new carpet). We just started up a couple of bee hives this past falls and are boarding a couple of horses. We figured we should create an LLC to protect our personal assets, but most of the business start-up books just talk about creating a business tax structure, then getting a loan for start-up costs. If we have personal cash, do we just open a business bank account and make a deposit to get started, then make sure all purchases go through that account? What do most people do? We want to start small, but I think we need purchase a tractor before things get out of control. Might be a good blog topic. ;)

Tags: Business

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Permalink Reply by Dusty Bottoms on December 23, 2011 at 11:51am

One way to approach this is to treat your business (the farm) separate from your personal life. You'll be doing that to some degree by creating an LLC so that's a good start. Regarding cash, think of it this way. You as an individual are LOANING money to the business, the LLC. So do that and even write the agreement. Have an accountant reflect the loan in Quickbooks or whatever you use. Keep a credit/debit card separate for the business linked only to the farm account. Otherwise you'll combine everything and it's pretty hard later, from a liability perspective, to claim that your personal life is separate from the business if everything is comingled.

Having offered up these nuggets of wisdom please remember that I am neither a lawyer nor an accountant so you shouldn't rely on my advice. Seek someone capable in your area, but hopefully this will be of help.

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Permalink Reply by Chris Stelzer on December 27, 2011 at 1:51pm

Dusty provides some really good advice above. One other option you have is consulting a professional, for FREE. I'm referring to SCORE. Their website describes what they do;

SCORE is a nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide

I have used them for legal advice, business structure advice and many other things. You can find a local mentor, again, for free, that will act as a mentor to you. They even have mentors/specialists that will assist you with specific issues, like the business structure issue. They can also provide help with taxes, accounting, and legal issues. Along with Dusty's suggestions this should help you out!

Cheers,

Chris

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Permalink Reply by MyBackAchers Farm on February 24, 2012 at 10:40pm

http://manasota.score.org/onlineworkshops/tab-a is an amazing site! Thanks!

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Permalink Reply by Nick Duncan on March 15, 2012 at 11:32am

I am also a huge advocate for buying an hour of time from both a laywer and an accountant. I promise you, you will save more money in the long run than if you don't! A laywer can give you expert advise in how to set up your business structure AND help you prevent any unwanted lawsuits in the future. An accountant will help you also with the business structure and will explain the tax benefits for each, and also help you know what can be depreciated etc. to help you pay less taxes. I would bet you would actually get your money back in the first year, and even come out ahead.