108 karma · joined September 13, 2014
In 2022 our reported "taxable income" to the IRS skyrocketed because of this rule change. Despite a small profit, we are paying tax on essentially 50% or more of our REVENUE. And because we are a pass-through entity, it pushes us into tax brackets that are quite ae bit higher than corporate tax rates of C-Corps.
2 or 3 years into this we will either have to take a loan to pay taxes, find a way to cut expenses, or (hopefully) grow enough in revenue while not increasing expenses to cover the additional tax.
It really is insanity. Our accounting firm and everyone they spoke with was convinced it would be "fixed" by congress before the final extension deadline a couple months ago. So we waited to the last minute to file, which, of course, resulted in significant late fees and interest on top of everything else.
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We had an Access database that managed grant funding for an entire public University and in many ways it worked a lot better than the SaaS app that recently replaced it. Need to collect a new set of data? No problem, give me 4 hours and it'll be ready to use :P.
I'd love to have something like Access but that worked very well as a platform-agnostic web app and could easily integrate with cloud infrastructure.
I'm no expert, so don't put too much stock in this, but a few tips from my experience:
1. Don't set out to start a business, then look for an idea. Instead, look for opportunities while you gain experience in a particular industry. I had 14 years of experience in the research/grant world before co-founding my first private business.
2. (Maybe) Look for a job as an SWE or IT support person within a non-IT company. Do a great job serving others and you'll become the go-to person for solutions. By the time I started the first company, we had already built over 10 small databases to solve specific problems, but none turned into anything more than one-off solutions to streamline specific processes.
3. Work hard, persevere, have a positive attitude, and always look for ways to help and serve everyone around you. Software is just the tool to provide a service. We support our clients through the software we build, but also through a very in-depth understanding of their world and how we can best help them. You also need a support network to start and grow a business, and people are much more likely to help and support you if they value and respect you.
4. Maybe owning your own business should be a 10 or 15 year goal. I know that's probably hard for people early in their careers seeing so many others self-employed. But there's something to spending a decade learning an industry and building a network. I'm not sure either company would have been successful had I started them in my early 20s. Just because the unicorn tech companies we hear about were founded by young college drop-outs doesn't mean that's the norm.I read somewhere that the average age of small business founders is somewhere in the 40s.
That was just my path, so take it with a grain of salt. There are many paths to starting a business and you'll want to decide what you want to get out of it. For me, it was never about making lots of money. It was about building something that helps others, creating good careers for people, and having the freedom to make our own decisions.
So avoiding VC funding might drastically reduce failures? :-P. There are many opportunities for niche software and services, but most would never turn into the next unicorn. If you have a validated idea that has real potential and you are willing to take a huge risk, then by all means go for VC funding and talk to places like YC. This is what they are made for, and they are good at it. However, if your idea is part of the other 99%, there may still be real opportunity to create and build a successful small business. Just set your expectations appropriately.
I'm nobody special but have co-founded 2 small software companies in the past 8 years. Both provide much-needed niche software and services. Neither has taken any investment capital, and combined they employ about 30 people while paying above average wages.
If you really want to start a company, there are other paths, especially if becoming a millionaire isn't your primary motivation.
Responding quickly and being available doesn't mean you don't also teach. When I did desktop support years ago I always explained what I was doing and why. Your mouse isn't working? I'll be right there. Let's see, sometimes disconnecting and reconnecting can fix. Let's try that. Yep, that worked. Oh, thanks - I'll try that myself next time!
I also found that responding quickly and having a humble/service mentality builds trust and respect. Those are the very things that give others pause and a desire to figure it out themselves because they trust you and respect your time. If you treat others poorly by ignoring them, for example, they are less likely to care if they are bugging or interrupting you.
A product support team is one of the most important sales engines for a business. If clients rave about your support, they will sell your product for you. Hard to do that if the attitude and approach is "do nothing" and wait for issues to hopefully resolve themselves.
If you are in IT support, it isn't your job to treat every colleague like a child who needs to learn. It's your job to serve others and remove any IT-related barriers to their productivity.
When I was doing IT support, half the requests were things people could figure out themselves if I just waited. But I was there to make their job easier and make them feel supported. Making them wait doesn't make them feel supported or instill confidence. Knowing they could call or text and have an immediate response is a huge boost to their productivity and feeling of confidence vs. wondering if or when I might reply.
Doing nothing is akin to saying my time is more valuable than yours, you silly plebian. It's the sort of attitude that reinforces the unfortunate stereotype that IT people are arrogant and view their expertise and role as more important than others'.
I found great success providing IT support by always responding immediately when I'm available, and establishing focus times where others know I may not respond right away. An attitude of service and humility can go a long way in winning the respect and trust of your colleagues and supervisors.
The better solution is to cut spending and the need for more taxes in general.
A lot of companies operate close to break-even or even at a loss. What happens with the owner of a $2m / year company must come up with a 10% wealth tax amounting to $200k, but the company is operating at break-even? Expenses must be cut to pay the tax. Ultimately hurts the lower and middle class the most.
If you go further back (50s - 60s), it was very common for a household to survive on a single income. Even 30-40 years ago when I grew up, our family of 6 lived off a single income from a non-college graduate.
That's very hard to do now, except for certain fields like tech.
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For more information: https://www.k-state.edu/oeie/about/employment/senior-web-dev...