Alexandra Chou

Infin8 Enterprises - Owner
New York, NY
http://infin8llc.com
  • Were you ever confused of what the differences are between a Corporation, S-Corp, and an LLC? We’ve been asked this many times and decided to help out our fellow entrepreneurs with a quick summary of the tax and legal implications of each.

    Sole Proprietor
    • Owner remains personally liable for lawsuits filed against the business.
    • No state filing required to form a sole proprietorship.
    • Easy to form and operate.
    • Owner report their share of profit and loss in the company on their personal tax returns.
    • Profits subject to self-employment (SE) taxes, essentially Social Security and Medicare taxes
    Partnership
    • Partners remain personally liable for lawsuits filed against the business.
    • Usually no state filing required to form a partnership.
    • Easy to form and operate.
    • Owners report their share of profit and loss in the company on their personal tax return [...]
  • Many times, I meet entrepreneurs and small business owners who enthusiastically tell me that they successfully created a set of financial statements by themselves. Their eyes will often tell you their story. Those of a parent boasting with pride and seeking external validation for their child. Of course, I agree being able to create a proper set of financial statements is essential for any business owner. But what is even more important is understanding it. What really is your balance sheet, income statement, and statement of cash flows telling you? Are you only able to decipher that you have positive income or that you’re not cash flow negative? If that’s all you can tell, then you’re probably not able to gauge the financial health of your business. Do you know how liquid your company is? Can you cover all your short-term liabilities? What is your profit margin? All this can be obtained by understanding and analyzing the data presented in your financial statements. [...]

  • When I ask new entrepreneurs what pricing model they use for their products, most often look at me in bewilderment. Model, you say? Some tell me that the price is simply what they “feel” is right, others may say that it’s the price of a comparable product in the market, and the bolder ones tell me that they want to undercut their competition so their price is simply X percentage less than the leading competitor’s.

    Although none of these methods are inherently wrong, I always suggest a business to evaluate their pricing decisions with a break-even analysis. A break-even analysis is simply used to find your break-even point (BEP). At what dollar amount of revenue and units sold will the cost and expenses associated with the production of the product be fully covered. There’s no profit or loss at this point. Everything is simply equal to each other. Why is this important? Because this is the point at which your price should not fall below (assuming demand remains the s [...]

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