We are thrilled to extend our heartfelt congratulations to FroFessionals for being honored with the Committee’s Choice Award from the Austin Community Foundation’s Black Fund. This award is a testament to the unwavering dedication of FroFessionals in addressing the unique needs of black, brown, and biracial individuals with textured hair.
EGBI’s client, FroFessionals, are a subscription-based platform, connecting individuals with professionals and product vendors who understand and cater to the diverse needs of kinky, coily, curly, and mixed-textured hair. Recently (on February 13th, 2024) FroFessionals was awarded the Committee’s Choice Award through the Austin Community Foundation’s Black Fund (a beacon of support for black-led nonprofit organizations) and joined the ranks of other eminent, Austin Based Nonprofit Organizations such as Black Mamas ATX and Real Queens Fix Each Other’s Crowns. The awards ceremony, hosted by Hutson-Tillotson University, was a celebration of achievement and culture. FroFessionals’s recognition at this event underscores the impact they’ve had on their community and the importance of their mission.
Moreover, FroFessional intends to use their award to advance their mission of increasing access to quality, consistent, and culturally relevant mental health care for historically underserved members of BIPOC communities in the greater Austin area. A commendable mission that is guaranteed to create a further positive impact on their community.
We are proud to celebrate FroFessionals’ success and commitment to making a difference. Additionally, we look forward to seeing the continued positive impact FroFessionals will have on the community.
Congratulations, FroFessionals, on this well-deserved recognition, and we applaud your ongoing efforts to create positive change in our community!
In today’s competitive business landscape, standing out is more crucial than ever. Your brand identity isn’t just about a logo—it’s about creating a cohesive and compelling image that resonates with your audience. In an episode hosted by the Economic Growth Business Incubator (EGBI), Krisi Gaston, a seasoned graphic artist and illustrator based in Houston, shared invaluable insights into the art of crafting a powerful brand identity.
Understanding Brand Identity
What Constitutes Brand Identity?
A brand identity encompasses everything that defines your business’s image and reputation. It’s not limited to visual elements like logos; rather, it includes your business’s core values, personality, and the overall experience you provide to your customers. As Krisi Gaston aptly puts it, it’s about how you present yourself to the world and how your audience perceives you.”
Why Does Brand Identity Matter?
Establishing a clear and memorable brand identity is pivotal for several reasons. Firstly, it distinguishes your business in a crowded marketplace, making it easier for customers to recognize and remember you. Moreover, a strong brand identity builds trust and credibility, which is crucial for attracting and retaining loyal customers. It also sets expectations for the quality of products or services you provide, influencing customer perceptions and purchasing decisions.
Practical Tips for Crafting Your Brand Identity
1. Define Your Core Values and Goals: Before diving into design elements, take time to articulate your business’s core values and objectives. Understanding what your brand stands for will guide the entire branding process, ensuring consistency and alignment with your mission.
2. Maintain Consistency Across All Touchpoints: Consistency is key to effective branding. Whether it’ your website, social media profiles, marketing materials, or customer interactions, ensure a unified look and messaging. Consistency reinforces your brand’s identity, fosters recognition, and builds trust among your audience.
3. Invest in Professional Design Expertise: Professional graphic design plays a critical role in shaping your brand’s visual identity. According to Krisi Gaston, who is recognized as an Adobe-certified professional in graphic design and illustration, professional design expertise ensures that your visual assets—from logos to promotional materials—effectively communicate your brand’s values and personality.
4. Build Trust and Credibility: A well-defined brand identity not only attracts customers but also cultivates trust and credibility. Consistent branding signals reliability and professionalism, reassuring customers that they can expect a consistent experience every time they interact with your brand.
Key Takeaways
Crafting a compelling brand identity is a strategic investment in your business’s success. It’s about creating a distinct persona that resonates with your target audience and leaves a lasting impression. By defining your values, maintaining consistency, and leveraging professional design, you can build a strong and impactful brand identity that sets your business apart in the competitive market. In conclusion, developing a robust brand identity goes beyond aesthetics—it’s about strategically positioning your business and shaping how customers perceive you. By implementing the insights shared by Krisi Gaston, you can empower your business with a compelling brand persona that resonates with your audience and drives long-term success.
In 2024 the Economic Growth Business Incubator (EGBI) was honored with the CAN butler award from the Community advancement network (CAN). The CAN is a regional coalition that brings together nonprofits, businesses, government agencies, and faith-based organizations to collaborate on solutions that improve the lives of Central Texas residents. They award the CAN butler award for giving collective action and change in the community.
EGBI won the CAN butler award from CAN by their efforts to build strong relationships with each and every one of their clients. At EGBI we believe that the most meaningful change happens when we work together with one another.
“The award highlights our belief that real impact happens through teamwork and shared vision, when we build bridges across sectors, we build stronger communities” Asserted Monica Peña, community relations director of EGBI.
It’s with great pleasure that we announce the recognition of EGBI for a prestigious CAN Butler Award in the Spirit of Collaboration category. EGBI’s nomination for the prestigious CAN Butler Award in the Spirit of Collaboration category is a testament to its exceptional dedication to community advancement in Austin. Through its innovative programs and initiatives, EGBI has fostered a culture of collaboration, bringing together diverse stakeholders to address pressing issues affecting community well-being. By forging partnerships with civic, business, and community groups, EGBI has amplified its positive impact on the community.
The Butler Awards, named in honor of Fred Butler, CAN’s first Executive Director, hold a special place in the hearts of those who champion community advancement. These awards shine a spotlight on individuals and organizations that exemplify the values of collaboration and leadership.
The core of EGBI’s approach is the belief that collaboration is essential for driving meaningful change. By creating a conducive environment for dialogue and cooperation, EGBI has mobilized collective action to address complex challenges effectively. As we celebrate this achievement, let us acknowledge the tireless efforts of EGBI’s team members, partners, and supporters, whose dedication and passion have been instrumental in driving progress.
The total solar eclipse will be coming to Central Texas on April 8th with the possibility of one million visitors in our area due to this solistrial event. Businesses should take advantage of the rare event and the opportunity to capitalize on the excitement and maximize their revenue.
Let us explore some strategies on making this happen:
1. Eclipse-Themed Promotions: Embrace the celestial theme by offering eclipse-themed promotions and discounts. Consider also having eclipse-themed merchandise; tapping into the event’s spirit can attract locals and tourists.
2. Extend Operating Hours: Since the eclipse will draw new crowds, consider extending your business hours to accommodate the influx of visitors. Staying open later or opening earlier can provide additional opportunities to serve customers and boost sales.
3. Collaborate with Local Attractions: Forge partnerships with local attractions or travel agencies to offer bundled packages that combine eclipse viewing with other experiences unique to Central Texas. Collaboration can attract visitors looking for comprehensive experiences.
4. Create Eclipse Viewing Events: Organize special events around the eclipse. Whether setting up viewing stations with telescopes, hosting educational talks by astronomers, or arranging live music performances, providing a festive atmosphere can draw crowds to your business.
5. Ramp Up Marketing Efforts: Leverage social media, email marketing, and local advertising to promote your eclipse-related offerings and events. Utilize hashtags related to the eclipse to boost engagement and generate awareness leading up to the event. Contact news stations and publications to let them know what your business has planned for this moment.
Consider some of the strategies above, as the total eclipse is an excellent opportunity to capitalize on the influx of visitors and boost revenue.
Trading military uniform for loafers or heels, salutes for spreadsheets – transitioning from military service to civilian life can be a thrilling yet daunting adventure. But for those with the entrepreneurial spirit burning bright, it’s also the perfect time to launch your own venture. Owning a small business offers freedom, flexibility, and the chance to build something truly your own. It requires careful planning, dedication, and a systematic approach.
So, veterans, buckle up for a crash course in turning your military expertise into business success!
Step 1: Find Your North Star (aka-Your Business Idea):
Identify your passion: What skills did you hone in the military that could translate into a business? Are you a logistics whiz? A master of communication? A data analysis dynamo? Finding your niche not only fuels your passion but also helps you target the right market. Assess your skills, experience, and passions to determine your potential business ideas.
Conduct market research: Don’t jump in blindfolded. Research your target market, identify existing competitors, and pinpoint any gaps you can fill. Is there a demand for your unique skillset or service? To try to understand customer needs, conduct market research interviews with friends and family. This will help you identify any challenges with your idea early.
Step 2: Craft Your Battle Plan (aka-The Business Plan):
Write a business plan: This roadmap will guide your journey. Define your business goals, target audience, marketing strategy, and financial projections. Remember, a solid plan attracts investors, partners, and ultimately, success.
Seek funding: Explore your options. Veterans have access to special loans, grants, and programs like the SBA’s Veterans Business Development Center. In addition, Economic Growth Business Incubator (EGBI) has several resources we can share with you to help you source for the best local funding opportunities. If needed, don’t shy away from seeking funding to fuel your growth.
Step 3: Choose a Business Structure and Register Your Business with the Texas Secretary of State (aka-Business Formation):
Select a Legal Structure: Choose the most suitable legal structure for your business, such as sole proprietorship, partnership, LLC, or corporation.
Register Your Business: Register your business name and obtain necessary licenses and permits at the federal, state, and local levels. Lastly, apply for an Employer Identification Number (EIN): Obtain an EIN from the IRS for tax purposes with the IRS.
Step 4: Set Up Your Operations:
Establish Your Workspace: Set up a physical or virtual workspace for your business operations. Procure Equipment and Supplies. Purchase or lease necessary equipment, tools, and supplies to support your business activities.
Set up your business accounting and financial systems. Implement accounting software and financial systems to track income, expenses, and financial transactions. This includes opening your business bank account to connect your accounting information.
Step 5: Assemble Your Team:
Leverage your network: Your military connections are a treasure trove! Reach out to fellow veterans with business experience, tap into mentorship programs, and build a team of advisors and collaborators.
Hire strategically: Surround yourself with talented individuals who complement your skillset. Don’t be afraid to delegate tasks and leverage the strengths of your team.
Step 6: Develop Your Brand and Marketing Strategy:
Create Your Brand Identity: Develop a strong brand identity, including your logo, website, and marketing materials.
Define Your Target Audience: Identify your target customers and develop tailored marketing strategies to reach them.
Implement Marketing Tactics: Execute marketing tactics such as digital marketing, social media, networking, and advertising to promote your business.
EGBI has resources such as our Marketing Roundtable, Toastmasters, and other marketing support to help you during your business journey.
Step 7: Execute with Precision (aka-Launch Your Business):
Start small and scale gradually: Don’t try to conquer the world overnight. Test your concept, refine your offerings, and grow organically based on customer feedback and market demand. You may want to consider having a “soft” launch to gather feedback and make improvements from the onset. Then you can plan an official launch after making any necessary changes based on the outcome of the soft launch.
Embrace the power of technology: Utilize tools like project management software, online marketing platforms, and communication apps to streamline your operations and stay ahead of the curve.
Monitor and Adapt: Continuously monitor your business performance, gather customer feedback, and make necessary adjustments to improve operations.
Step 8: Manage and Grow Your Business:
Provide Excellent Customer Service: Prioritize customer satisfaction and strive to exceed their expectations. After all, your customers are the heart of your business.
Manage Finances: Monitor your financial performance, manage cash flow, and make informed financial decisions to ensure business sustainability.
Seek Growth Opportunities: Explore opportunities for expansion, diversification, and innovation to grow your business over time.
Step 9: Remember Your Mission (aka-Your Why):
Maintain discipline and focus: Military service instilled in you the value of hard work, perseverance, and discipline. Apply those qualities to your business and stay laser-focused on your goals.
Never stop learning: The business world is a dynamic battlefield. Stay updated on industry trends, attend workshops, and continuously hone your skills to adapt and thrive.
Step 10: Stay Informed and Seek Support:
Stay Educated: Stay updated on industry trends, regulations, and best practices to remain competitive.
Join Veteran Entrepreneurial Networks: Connect with other veteran entrepreneurs and business organizations for support, resources, and networking opportunities.
Utilize Government Resources: Explore government programs, grants, and resources available specifically for veteran-owned businesses.
Extra Tip: Don’t hesitate to tap into the vast network of resources available to veterans! The Small Business Administration,SCORE, and Veteran Service Organizations offer invaluable support, training, and guidance. EGBI also provides a number of valuable resources for our veteran business owners as well as it is a privilege for us here at EGBI to support our veteran business owners.
Remember, transitioning from military service to business ownership is a marathon, not a sprint. Embrace the challenges, celebrate the wins, and never lose sight of your mission. With your unique skills, unwavering determination, and a well-crafted strategy, you can conquer the entrepreneurial battlefield and build a business as impressive as your military service.
About the Author,
Monica Perras, Army Veteran, Entrepreneur, and Business Coach and Veteran Services Coordinator at Economic Growth Business Incubator is an advocate for veteran and non-veteran small business owners. With over seven years as a small business owner, Monica works to support aspiring and existing business owners who face barriers to growing a successful business, often, many of them being military veterans. If you’re a veteran looking to start or grow your business, reach her at perras@egbi.org for more information.
Every Wednesday, members of the EGBI Toastmasters club gather to practice their public speaking, presentation, and interpersonal communication skills.
The first part of the meeting is probably what you think about when you think about Toastmasters, where participants deliver prepared speeches to the rest of the club. (Unfamilar with Toastmasters? Click here to learn more.)
But the reality of life is that we often don’t have the time or opportunity to prepare what we want to say ahead of time — and we have to think on the spot.
This is where Table Topics comes in.
In each Toastmasters meeting, participants have the chance to practice their improvisation skills in front of a supportive audience. After the host introduces a question or prompt, random participants are invited to speak about the topic for 1–2 minutes.
Through practice, members learn to organize their thoughts and deliver concise responses without preparation. By presenting and providing feedback to others, Toastmasters members build confidence in their ability to contribute meaningfully to any conversation.
But outside in the real world is where these skills really come to life. Whether you’re answering a customer’s question, participating in a panel discussion, or delivering a last-minute presentation, the ability to respond effectively in any situation is a huge asset. An engaging conversation might turn a one-time visitor into a loyal customer, a speaking opportunity into invaluable publicity, and a restless audience into a motivated one.
If you’re ready to practice your impromptu speaking skills, you’re invited to join the EGBI Toastmasters International chapter, where you will learn and practice alongside a group of supportive peers. Click here for more information on how to join.
Clearly articulating your value is critical in a world where people’s attention spans are getting shorter, and opportunities arise suddenly. Times like these are where an elevator pitch comes in. In the time it takes to ride an elevator, you should be able to provide a concise and powerful overview of who you are, what you do, and why it all matters.
What is an Elevator Pitch?
An elevator pitch is a brief, persuasive speech that you can use to spark interest in what you or your business offers. It’s called an elevator pitch because it should be short enough to present during a brief elevator ride – typically around 30 seconds to two minutes.
The Purpose of an Elevator Pitch
Capture Attention: An elevator pitch is designed to quickly capture your audience’s attention and pique their interest in what you offer.
Make a Memorable Impression: First impressions are essential, and an elevator pitch is your chance to make a lasting one. By delivering a brief and persuasive message, you increase the probability that your audience will remember you and your value proposition.
Communicate Your Value Proposition: Regardless of whether you are an entrepreneur, a salesperson, or a job seeker, an elevator pitch allows you to communicate your unique value proposition clearly and concisely. It answers the question, “What do you do, and why should I care?” in a compelling way.
Open Doors to Opportunities: Opportunities often arise unexpectedly, and you never know when you’ll find yourself in a situation where you must pitch yourself or your business on the spot. An elevator pitch equips you with the confidence and clarity to seize these opportunities.
Start Conversations: An effective elevator pitch serves as a conversation starter. It is about delivering a monologue, initiating a dialogue, and engaging your audience meaningfully.
An elevator pitch is a concise and compelling synopsis of your background, experience, and what you offer in the thirty seconds or less it takes to ride an elevator. Here are some tips to consider when crafting an elevator pitch:
Know Your Audience: Spend time learning about and understanding your target audience before drafting your elevator pitch. Make your pitch specific to the requirements, interests, and pain points of the people you are pitching to, whether they are prospective workers, investors, or clients.
Begin with a Hook: Use an attention-grabbing hook or opening sentence to grab the attention of your audience right away. This may be with a question, an eye-opening figure, or a short story that connects to your expertise or service. The goal is to spark their interest and compel them to hear more.
Keep it Concise and Clear: Recall that you only have a little time to make your presentation, so be concise and clear. Every word matters. Refrain from jargon or technical terminology that might confuse your readers; keep your message brief and straightforward. Make an effort to explain your value proposition in an understandable language.
Emphasize Your Differentiating Features: What makes you stand out from the competition in your industry? Emphasize your distinctive abilities, accomplishments, and experiences to make an impression. Pay attention to the advantages you may provide your audience and why they should be interested in your offer.
Practice. Practice. Practice: Practice is necessary to create a compelling elevator pitch. After you’ve written your pitch, practice it until it comes easily and naturally. You may record yourself, practice in front of a mirror, or practice with a friend or coworker to ensure you maximize the time given.
Be Genuine: Gaining your audience’s confidence and credibility requires being genuine. When presenting, show off your personality and be sincere and enthusiastic. Instead of coming out as too prepared, talk from the heart and allow your passion for your idea or task to come through.
End with a Call to Action: Put a clear call to action at the end of your elevator pitch to nudge your audience to take the following action. Make it simple for them to carry on the conversation and look into options by giving them quick access to your website, LinkedIn connections, and follow-up meeting scheduling. Remind them who is a perfect referral for your business.
Be Flexible and Adaptable: Finally, be ready to modify your elevator pitch to fit various settings and circumstances. You never know when or where you might be asked to give a pitch, so be prepared to modify it at any time based on the situation and the people you’re speaking with.
Developing your elevator pitch skills is an important life skill that may lead to changes in your personal and professional life. You will be well-prepared to leave a lasting impression and take advantage of any chance if you create a concise, captivating, and genuine pitch.
La Incubadora Podcast is part of the Economic Growth Business Incubator, a local non-profit with the mission of providing training, coaching, and support to aspiring and existing business owners who face barriers to growing a successful business. La Incubadora Podcast is born out of the need to put in video and audio a lot of the success stories we see here at the business incubator. We also want to answer frequently asked questions and connect with small business owners with the resources to succeed in business on your own time and wherever you are while you have access to a mobile device.
For today’s episode we’ll cover a little bit more information about Facebook Marketplace. We will unravel the intriguing concept of unwittingly owning a Business and its tax implications, particularly in the realm of online selling through platforms like Facebook Marketplace. We will explore scenarios where individuals may unknowingly find themselves in business roles and repercussions that it means for their taxes from understanding IRS criteria to proactive compliance.
Meet our speakers:
Our host, David Fuentes, will be diving deep into today’s topic with our guest speaker, Andrea Harrington. Andrea Harrington is a lawyer and team manager at Texas Rio Grande Legal Aid small business and nonprofits team based in TRLA Austin Offices. Andrea works throughout Texas to serve the areas representing micro entrepreneurs facilitating Pro Bono small business legal clinics and providing Community Legal education on legal issues relevant to micro entrepreneurs. Andrea represents domestic violence survivors in family law cases and in protective order cases. Andrea obtained her Bachelor of Arts at Harvard University in 1998 and completed her Log Degree at the University Texas school of law in 2003. Andrea offers invaluable guidance to navigate this terrain with essential knowledge and be prepared to manage your tax responsibilities effectively in the digital marketplace.
What work does the Texas Rio Grande Legal Aid do?
Andrea Harrington says,
“Texas Rio grande Legal Aid is a non profit law firm and we provide assistance through a wide variety of areas of law from family law to public benefits, housing issues, landlord/tenant issues. We do have eligibility guidelines that we have to meet for our clients.
You can go to www.trla.org/gethelp and there are prompts that can let you know what our legal intake hotline is that can get you started, if you need assistance. To go to through our eligibility screening and get some legal assistance and ,of course, we also offer legal advice to small businesses!
It is a service to the community ,all of our services are free to the community for eligible clients and we have offices here in Austin, all the way west to El Paso and all the way south to Brownsville!”
How does selling on Facebook Marketplace classify someone as a business owner? Does it affect me on my taxes?
Andrea Harrington says,
“The interesting thing about Facebook Marketplace is that people use it for various reasons. For example, if you have a new couch or you’re moving your baby from a crib to a toddler bed and you have to get rid of the old furniture and pull in the new furniture, that is NOT a business.
Other folks are using Facebook marketplace as a way to make some extra money, for example you may go to Goodwill on the buy by the pound day and you receive your items to resell them on Facebook Marketplace.
OR
You purchase furniture or toys, that may be a little bit beaten up, and refurbish them and sell them on Facebook Marketplace. You may be using that extra bit of income to top off your grocery budget, to be able to pay your car insurance
The MAIN thing to know is if you are regularly selling items via Facebook Marketplace, Craigslist, eBay, Etsy, or any online platform. The IRS may consider these activities of you being engaged in a business. With that comes tax implications because the IRS is very clear that all businesses income should be reported and is taxable.”
What are KEY FACTORS that the IRS or tax authorities consider when determining whether someone is running a business?
Andrea Harrington says,
“It is considered a business once the intent is to earn more moneythan I spend, then that is considered running a business.
One should also take into consideration the regularity of operations. For example if you are listing one/two new items a week or one new item a day, then that’s a regularity of engagement of a platform for a business activity/ economic activity and it will be taken into consideration by the IRS.
Additionally, the production of income and ongoing efforts the person may take to improve their profits of the business. For instance if I am selling on Facebook marketplace but I am also advertising items on Instagram, those are going to be other efforts to further the interest of my business. Which would make it look more like business activity than just a personal transaction.”
David Fuentes: “That makes perfect sense, so there’s profit and then the regularity of operations. Right?”
Andrea Harrington: “Yes and the production of income. If you are bringing in income regularly, then it will become a factor.”
“For a long time people could sell on Craigslist , Facebook Marketplace, and eBay and you would get paid via PayPal or Cashapp and that was the end of the transaction but that’s changing.”
Are there specific thresholds or criteria that individuals should be aware of when it comes to selling goods online and triggering business tax obligations?
Andrea Harrington says,
“The big change that is happening this year, that is really important for people to know, is that these transactions that you’re doing if getting paid by Venmo, Cashapp, PayPal, or through Zelle. These payment providers are going to be sending out 1099-s to you. There has been a big change in the law, starting in 2024 if you make more than $600 in income through one of these payment apps you will be getting a 1099 that is reporting your income. If you think about it, what you have been selling on Facebook Marketplace. if you make more than $600 in a year which is not a lot, this is 50 bucks a month!
This year in 2024, which is the first quarter is already done, the threshold for receiving the 1099 is $5,000.
What does this mean?
If you make $5,000 in just one payment platform you will get a 1099. Something to keep in mind is that 1099-s are given per payment platform, so for those of you that maybe selling higher priced items such as jewelry or furniture you may hit that threshold in several payment providers, you will be receiving 1099-s from each payment provider. It is not aggregate for your whole business since it’s per payment provider so it’s really important to be aware that this hasn’t been an issue for a lot of Facebook Marketplace sellers for a very long time because the threshold used to be $220,000 and in 2024 it is dropping down $5,000 and further down to $600 for this upcoming year 2025.”
What piece of advice would you give to Facebook Marketplace users?
Andrea Harrington says,
“One piece of advice I would give is to start keeping records as soon as possible.
It is really important that you guys who are selling on Facebook Marketplace that you take the steps to at least start keeping records so you can deduct your business expenses from the money you are making reselling these items. If you’re going to a store and you’re buying by the pound and then you’re reselling some of these items of Facebook Marketplace, you NEED to get receipts of your cost of goods sold.
Another thing that folks need to be really aware of is if you are selling online on Facebook Marketplace or any other platform you should have a sales tax permit from the state of Texas and be collecting sales tax because it is another mandatory rule of the law and it affects all sellers.
It is crucial for everyone to learn what items you are selling are taxable and collect the sales tax on that, collect them, and turn them over on your filing deadlines.”
David Fuentes says,
“It really does operate similarly as a business? It is really useful because I have some clients here, for example someone who owned a tire shop and so they would resell used tires on Facebook Marketplace and that counts as a separate business operation in itself so it’s kind of wrapping our heads around this and specifically for tax implications.”
Andrea Harrington says,
“Yes absolutely!”
How can individuals who sell items online proactively ensure compliance with tax regulations and avoid unintended tax liabilities?
Andrea Harrington says,
“The MAIN way to ensure compliance there’s two big things that folks need to do, one is keep records. You will hear this from your business count to lenders at the bank from anyone who works with small businesses will tell you how important it is to keep good records of the money you spend for your business and keep records of the money that you’re earning from your business. This is because any tax compliance is going to be reliant on the quality of your records.
The other MAIN way to ensure compliance is to report because there is no way around it. You have to report your income, you’re able to deduct your but you must be aware and accept that there will be taxes due on your profit that you’re making from your operations.
Additionally you must research what your state sales tax obligations are and make sure that you’re going to be compliant with those as well. It’s the cheapest way to go about doing this otherwise you might get audited at a state level and on the federal level, which is expensive, if you are going to be having someone representing or helping you and any back taxes that were found to be owed you are going to have to pay as well as interests and penalties. In hindsight, the cheapest way to do this is to do it right from the beginning.”
What are some common misconceptions or pitfalls that people may encounter when it comes to understanding their tax obligations related to online selling?
Andrea Harrington says,
“So a big one is that people think that because they’re selling online, that they don’t have a real business so they don’t have any tax obligations. Additionally some haven’t formed a corporation or an LLC (Limited Liability Corporation) or filed a DBA (Doing Business As) so they haven’t formed a business, that is not a threshold that the state or federal government uses to determine whether or not you’re going to owe taxes on business income. What they’re looking at is the reality of the situation, are you engaged in economic activity that’s making you a profit? They are NOT looking at the formalities of whether you filed this paper or that paper. Like we said before, they are looking at the reality of what’s going on. The thing is that when you’re doing stuff online that is a record of itself, that’s evidence that’s out there. You can’t claim that you weren’t doing those activities when posts are up there, so it is essential to have that reality check of yourself and set a budget for these taxes. “
David Fuentes says,
“It’s really important to know before you start doing these things right otherwise you can find yourself in a hard place even without knowing this.”
As a lawyer specializing in this area, what advice do you have for individuals who may be uncertain about their tax status as online sellers?
Andrea Harrington says,
“In my experience people generally have a pretty good idea of what their status is whether or not they have a business, it just may be not the answer you wish it was. So my advice would be to be really honest with yourself about your selling activities online, whether its baby clothes, toys, clothes, etc, then you have a business. Like we said beforehand, if you are selling online to make a profit and you have come to terms with the reality of your situation, if you are uncertain do your record keeping because then you may not know if you are making a profit every month. With that you will find out whether or not you have a business. If you really aren’t sure, I can give you information you need. It may not be a huge profit, you might make $100 or $80 a month so I need to take care of this so you don’t get yourself into hot water. “
Additionally if you want more information specifically about taxes, the IRS has an excellent website, a YouTube channel, and a whole web page dedicated to small businesses tax issues!
The Texas Comptroller offers a lot of information on sales tax issues, so if you have any questions you can contact them if you are not sure whether you should be collecting sales taxes you can do that reading online.
Austin has a lot of resources for small businesses and for entrepreneurs! The City of Austin has a department dedicated to small businesses and there are lots of profits here in town that are also dedicated to assisting small businesses.”
David Fuentes says,
Perfect! We have several resources here in the city of Austin such as the IRS, and they also have a Small business and Self-Employed Tax Center which is a great resource and is the first website that popped up.
Appreciation
Huge thanks to Andrea Harrington for being our guest speaker, especially with all of these new changes and folks will have to adapt. None of us desire to deal with tax issues or the IRS, so it’s better to keep records before getting into trouble. It’s been a pleasure once again chatting with you and we hope that you find this episode entertaining and informative!
This episode was produced by Raycast media to be able to launch our podcast. Huge thanks to Raycast Media for this amazing partnership!
If you know someone else that could benefit from this episode share this article with them or share the Incubadora YouTube podcast! Remember that the Incubadora Podcast is part of the Economic Growth Business Incubator, a business incubator in Central Texas that offers training, coaching, and support to small business owners with barriers to achieving success.
If you would like to learn more about the economic growth business incubator and our services visit our website: https://egbi.org/ Thanks for listening!
