A subscription business model is a type of business where customers subscribe to goods or services, pay for them at a set recurring rate, and then receive them on a certain cadence. I am confident when I say that everyone reading this article is a customer of a subscription business. Do you have your trash…
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What Is a Guaranteed Payment to a Partner?
A guaranteed payment is a specified payment that partnerships pay to their partners for service or use of capital (as if they were made to a person who is not a partner). These payments are made without any regard for the profits of the partnership. The goal of paying guaranteed payments is to assure that…
What Is Accumulated Earnings Tax: How To Avoid It & More
The accumulated earnings tax (AET) is a penalty imposed by the IRS on corporations for keeping earnings for longer than they need to run their businesses rather than paying out dividends to shareholders. The goal of the tax is to discourage corporations from accumulating excessive funds to avoid shareholder-level taxes. Corporations can avoid being exposed…
What Is a Reasonable Salary for an S-corp Shareholder?
What makes an S corporation (S-corp) salary reasonable depends on several factors, such as the type of work being done, business standards, and company profit. Setting a reasonable salary is important for operating an S-corp and also keeps the IRS from reclassifying your distribution and exposing you to penalties, interest, and additional taxes. Factors Affecting…
What Is Cash Discounting? Small Business Guide
Cash discounting is offering a discount on a product or service to customers who pay with cash. Businesses use cash discounting to avoid credit card processing fees. It is seen more commonly with small or mom-and-pop businesses, especially those with a lot of customers already paying in cash or those with particularly tight margins. How…
Radio Advertising: The Small Business Guide
Radio advertising is a tried and tested marketing channel for businesses looking to promote a message to a wide regional audience. In a 30- to 60-second radio commercial, businesses can say more than an online text-based ad with limited reach. In this article, we explore the advantages of advertising on radio, when and how to…
Semi-truck Insurance: Costs, Coverage & Requirements
Semi-truck insurance, also called owner-operator or commercial truck insurance, is a blanket term for a collection of policies for truck drivers. Many of these policies cover truckers’ legal liabilities in different situations, such as hauling cargo or nonbusiness driving. Owner-operators can expect to pay anywhere from $3,000 to $16,000 per year for truck insurance. Whatever…
What Is a C Corporation: Tax Treatment, Liability & More
A C corporation (C-corp) is a business structure typically used by larger companies or those seeking funds from investors. Many business owners who opt to organize as a C-corp do it because they are required to; for instance, if they have over 100 shareholders. Other owners choose it to attract investors, such as those who…