Wyden, Merkley Call For SBA To Accept Loan Application From Cannabis Business In Cannabis-Legal States

Oregon senators: “SBA loans would be especially helpful to cannabis small businesses because they would fill gaps left by the private sector.”

DISTRICT OF COLUMBIA: U.S. Sens. Ron Wyden and Jeff Merkley today announced they are requesting that the Small Business Administration (SBA) be prohibited from denying loan applications to cannabis small businesses in states like Oregon that have legalized cannabis use.

In the Oregon lawmakers’ letter to Senate colleagues overseeing SBA appropriations, they urged language prohibiting the SBA loan denials to cannabis businesses by noting the clear shift in public opinion toward supporting legal cannabis and the tax revenues these businesses generate for states.

“States collected an estimated $1.3 billion in tax revenue from legal cannabis sales in 2018,” Wyden and Merkley wrote. “However, SBA’s current policy excludes small businesses with ‘direct’ or ‘indirect’ products or services that aid the use, growth, enhancement, or other development of cannabis from SBA-backed financing. Consequently, small businesses in states with some form of legal cannabis must choose between remaining eligible for SBA loan programs, or doing business with a rapidly-growing and legal industry.”

The SBA’s loan programs provide financial assistance in the form of loans and loan guarantees to small businesses who cannot easily access capital, a problem disproportionally faced by minority entrepreneurs.

“Currently, most banks are reluctant to serve cannabis businesses due to conflicts with federal law, meaning that these businesses often are forced to operate using purely cash, creating an unsafe operation,” the senators wrote. “SBA loans would be especially helpful to cannabis small businesses because they would fill gaps left by the private sector. Access to these SBA loan programs could ensure that small businesses – especially those led by our minority, women, and veteran entrepreneurs – can raise money for their ventures and support job creation.”

The letter comes in addition to legislation sponsored by Wyden and Merkley that would make cannabis businesses eligible for SBA assistance, forbid Small Business Development Centers and Women’s Business Centers from declining to serve those businesses, establish the Cannabis Opportunity Program for SBA microloans and provide grants to minimize barriers for under-represented groups to participate in cannabis businesses.

In addition to Wyden and Merkley, other co-signers of the letter led by U.S. Sen. Jacky Rosen (D-NV) include U.S. Sens. Tammy Duckworth (D-IL), Michael F. Bennet (D-CO), Kirsten Gillibrand (D-NY), Bernard Sanders (I-VT), Edward J. Markey (D-MA), Cory A. Booker (D-NJ), Robert Menendez (D-NJ) and Kamala D. Harris (D-CA).

A copy of the entire letter is here.

Blockchain Technology Integration In The Cannabis Supply Chain

NEW YORK: According to a market research reported by IndustryARC, the blockchain market in supply chain is expected to reach $424.24 million by 2023, with a compound annual growth rate of 48.37 percent during the forecast period. A supply chain is a network between a company and its suppliers to produce and distribute products or services to the customer.

Adoption of blockchain technology in the supply chain industry makes information accessible and modifiable at any node. The report indicates that enhanced transparency and immutability, improving smart contracts, increasing security concerns are factors that drive the growth of the market.

Last year, IBM outlined the potential uses of blockchain technology in the supply chain of cannabis sales. According to the proposal: “Blockchain is rapidly becoming a world leading technology enabling the assured exchange of value in both digital and tangible assets, while protecting privacy and eliminating fraud. Its relevance to regulating cannabis is similar to its many chain of custody applications in areas such as pharmaceutical distribution and food chains. The core to those supply chains is the same, assuring health and safety of consumers, preventing fraud and counterfeiting while creating a foundation of transparency upon which to base regulation.”

Cannabis Industry Ambassador-At-Large: Jake The Professor’s Weekend Unlimited

By Jake The Professor

I am so privileged to be able to attend some of the cannabis industry’s top events.  As a rule, Cannabis Industry professionals are eager to support of our industry, our peers,  and even our competitors to some measure. We attend events honoring outstanding individuals, and enjoy participating with our industry associations, like the MJBA and Cannabis Alliance. These grassroots events more often than not turn into a big party. We see the best events as happenings — reunions of industry leaders and professionals coming together to learn, celebrate and plan our next battle. 

As I mentioned in my last Cannabis Industry Ambassador-At-Large column, the Seattle 4/20 Celebrations were the most spectacular ever. It was a weekend unlimited in its grandeur to be sure. 

Weekend Unlimited is a lifestyle brand. Bridging lifestyle with Cannabis. Weekend Unlimited is about life's highs, anytime and anywhere.

Weekend Unlimited is a lifestyle brand. Bridging lifestyle with Cannabis. Weekend Unlimited is about life’s highs, anytime and anywhere.


Jake The Professor was honored to be a featured presenter at last weekend’s Bongzilla event in Seattle.   Showcasing amazing glass art — including huge Godzilla sized bongs by Jason Harris of Jerome Baker Designs — the gala was sponsored by Weekend Unlimited and Leafly. 

The 420 weekend event included lots of fire

The 4/20 weekend event included lots of fire

The 4/20 weekend event was filled with fire (the kind that melts glass), and some things called Glory Holes and Kilns. There was plenty of open flames, with fire shooting from the torches used to shape and temper the glass.  The thing about Glass Artists is that they all move very quickly in a orchestrated chaos of fire. The nature of the glass artist is to move in a hurry. For one thing, the glass they are working with is extremely hot. From when we were children, we all learned to move fast when fire is involved.  But the main reason is that hot glass cools quickly, and must be shaped hot before it cools and won’t form correctly, or worse breaks. 

Come see Big Green and Jake The Professor at Diego Pellicer Seattle

Come see Big Green and Jake The Professor at Diego Pellicer Seattle

The conductor overseeing the organized chaos of this active working industrial hot glass shop was Jerome Baker Design’s Jason Harris.   Jason invited artists from around the West Coast, who gathered Friday in a rented studio in the shadow of the Space Needle in a collaborative effort to build a 24-foot bong, nicknamed Bongzilla.

“Essentially this is the Freedom Bong,” head glass blower Charles Lowrie told me. Once assembled this larger-than-life Art Glass exhibit will displayed in Las Vegas at the new Cannabis Museum in July. It’s creators believe Bongzilla to be the world’s largest functional bong.


image2-1
Our good friends from Cannabition were on hand with video cameras to document the scene. Also on hand were the local press, including The Seattle Times, KING 5, Northwest Leaf and DOPE Magazine.

image1 
One of the more interesting things I witnessed was a an artist who had lost his daughter when she died giving birth. He incorporated her ashes into a 24 foot memorial bong. It was quite moving for all of us who witnessed this.

Another highlight for me was when Chef Jeremy Cooper arrived with a couple of boxes of his delightful artisan chocolates. These delicately-crafted confections are made with the very best chocolate — and for this occasion were made with CBD and terpenes for a unique and effective product. They were a big hit and fit right in with Weekend Unlimited’s, unlimited weekend event. 

Jeremy Cooper

The Dab Doctor was in the house, and really big impression with all who participated.  Accompanied by Chef Jeremy Cooper, the Dab Doctor showed up with a slab of shatter about the size of a pizza! In fact that’s how it was presented — in a large size pizza box. The Dab Doctor soon set up two electric dab rigs and we were Unlimited Dabbing all the do da day.

Many of the industry professionals I see routinely stopped by to get a gander of real Dale Chihuly style big glass art. There were a dozen glass artist actively working very hard for 12 hours strait four days in a row. If you are thinking about becoming a glass artist, start small. This “Big Glass” is definitely not for the beginner. Many of these professional glass artist work with Dale Chihuly. 

It was great to see so many industry friends turn out for the “Big Bongzilla Event.”  Everyone it turns out likes big bongs.  We even put one of the Giants on display at Diego Pellicer.  I call it “Big Green”. 

Big Green On Display at Diego Pellicer Seattle

Big Green On Display at Diego Pellicer Seattle

Please come  by and check out Big Green at Diego Pellicer, 2215 4th Ave South,  Seattle Washington, and snap an Instagram with Jake The Professor.

Cannabis Industry Needs To Know Packaging Laws

CALIFORNIA: A leading expert has warned the fledgling Californian Cannabis industry that businesses could soon face heavy fines for breaking new laws they don’t fully understand.

Brad Davis, Product Category Manager of Acorn Paper Cannabis Packaging, has warned that Proposition 65 has effectively changed the regulations already. As the legal cannabis industry is in a state of constant flux, more regulations could follow, and cannabis licensees need to understand that every change could affect their labeling strategy.

“Proposition 65 is not specified within the MAUCRSA guidelines,” said Davis. “But any cannabis products manufactured in California that contain chemicals above safe harbor levels will be required, under Prop. 65, to add to their label warnings. This applies to everyone in the cannabis supply chain.”

Prop. 65 regulations come into force on August 30, 2018, and every affected product must be clearly labeled unless it was manufactured before the cut-off date. But this is just one regulation, and there will be more changes as the cannabis industry matures.

It’s a controversial industry that has only just found acceptance after decades of prohibition. The cannabis industry will inevitably be under constant scrutiny, and there will be test cases to show that the regulators are taking a strong stance. Individual businesses could find they fall foul of the law and incur massive fines or sanctions if they fail to label their products properly.

Regulatory compliance can be a complete minefield, but there is a simple solution. Los Angeles-based Acorn Paper Cannabis Packaging specializes in helping clients navigate this pitfall-strewn maze. One of the ways APCP is helping clients is with an ‘in stock’ exit bag with 24-hour delivery where the state requires childproof bags for customer walkout.

The company goes beyond the rules and can help clients produce eye-catching packaging that will help them stand out in a competitive industry that is already turning over more than $31 billion a year globally according to a study by the Brightfield Group and could easily top $20 billion in California alone by 2023. That’s going to reap real rewards for suppliers and retailers at every stage in the cannabis supply chain.

Acorn Paper Cannabis Packaging even offers a full range of products that can benefit each stage of the cannabis supply chain. The company is building out a white label range of goods for those that want to get into the explosive cannabis industry, beginning with the development of a supply chains solutions website and an eCommerce platform to launch in Q2.

It’s a novel way for companies to dip their toes into the water in one of the most lucrative, and yet highly-regulated new industries in North America. With Acorn Paper Cannabis Packaging on their team, they can rest assured that the products are compliant and clients can simply focus on marketing, sales, and the customer.

Acorn Paper Creates New Division Targeting The Cannabis Industry

CALIFORNIA: Acorn Paper has launched a new division to meet the paper, packaging, janitorial/sanitation and custom promotional needs of the Cannabis industry. Branded as Acorn Paper Cannabis Packaging (APCP), this division will address the entire cannabis supply chain to growers, manufacturers, distributors and consumer facing retail products. Acorn Paper is positioning itself to become a packaging industry thought leader in the fast-growing cannabis industry.

To lead this division, Acorn has hired Brad Davis as the APCP Product Category manager. A trailblazing senior sales, marketing and business development executive, Davis has a proven record leveraging innovation to drive revenue and market share growth. Davis’ background includes several C-suite corporate sales executive posts, at major digital media organizations including Disney, AOL and Comcast. He also brings substantial experience with entrepreneurial initiatives. A recognized “lifestyle brand expert” in fashion, parties & events, he was recently recognized by Angeleno Magazine as one of Los Angeles’ “Modern Men.”

“Acorn Paper and Packaging are using their years of experience in meeting standard and custom packaging needs for a variety of industries, for the rapidly changing cannabis supply chain- due to both state regulations and the changing marijuana consumer,” Davis told MJ News Network.  “APCP (Acorn Paper Cannabis Packaging) has been created to dedicate specific, focused resources on meeting the needs of all aspects of the cannabis and related products industry.”

Davis will manage day to day operations of the division, including sales and marketing initiatives with general management responsibilities. Davis will work with the 90+ sellers in the Acorn Paper sales organization, and will initially focus efforts on the West Coast, with plans to offer a national footprint and e-commerce solutions in the coming year. A new destination URL will debut shortly: www.cannabispckg.com.

David Weissberg, CEO & President of Acorn, said, “We recognize the tremendous opportunity that the cannabis industry presents to our company. This will be a $70B industry in just a few years, and Brad Davis is the perfectly positioned executive to lead our initiatives in the space.”

Davis is “Proud to represent one of the largest privately held packaging companies on the west coast. With their long history of success and vertical focus in areas from agriculture to wine, addressing the needs of the entire cannabis supply chain is a natural addition to the Acorn family.”

Acorn Paper Cannabis Packaging has recently became a corporate sponsor of the MJBA (Marijuana Business Association) and will have presence at trade shows and conferences, including MJBizCon throughout 2018.

“Acorn Paper Cannabis Packaging chose to join MJBA, as our first professional trade association partnership, to augment the thought leadership MJBA has demonstrated over the past 6 years,” commented Davis. “Our goal is to help the cannabis industry understand the ways experts in brand marketing and  packaging can impact consumer sales and maximize effective fiscal management throughout the cannabis supply chain.”

Brad Davis can be reached at bdavis@acorn-paper.com or at 323-980-8353.

Women Grow Launches WomenGrow TV With LOOT Interactive On Twitch TV

Exclusive Programming, Networking Events, Interviews & Behind-the-Scenes at 2018 Leadership Summit

COLORADO: Women Grow, the cannabis industry’s largest professional networking organization, is expanding its media presence with its new channel on Twitch.tv. The online channel will officially launch during the Women Grow 2018 Leadership Summit in Denver this February 1 and 2.  WomenGrow TV (WGTV) will feature exclusive 2018 Summit content and programming that has never been available to the public. The channel will bring original programming featuring women across the country and Canada in leadership positions in the canna-industry, as well as exclusive content from Women Grow meetings & events–access previously only granted to Women Grow members.

“We are excited to announce WomenGrow TV in partnership with LOOT Interactive; this channel will be dedicated to the cannabis industry, and led by women,” said Kristina Garcia, CEO of Women Grow. “Our channel will provide viewers an inside look to programming focused on cannabis startups, wellness, one-on-one interviews with industry leaders, Women Grow Signature Networking meetings, and more. WomenGrow TV will be the first channel fully dedicated to women and women led businesses in the cannabis industry.”

WGTV is a natural fit for Twitch,” said LOOT Interactive’s Managing Director, David Sterling. “We’re thrilled to help bring Women Grow to Twitch’s global audience and help empower entrepreneurs with female-oriented content about the cannabis industry that’s both relevant and entertaining.” In addition to being the development house for the Twitch PlayStation app, LOOT Interactive is a publisher and developer of video games, OTT apps, VR experiences, and high-profile Twitch channels. Clients include Twitch, Red Bull Media House, the NBA, NHL, MLB, Buzz Aldrin, the Harold Lloyd Estate, and many more.

WomenGrow TV soft launched in early December 2017  and currently has  programming  streaming on its platform from 2017 Leadership Summit Lightning Talks, popular video archives, and personal profiles of Women Grow’s leadership team.  The full content of Leadership Summit’s signature “Lightning Talks” will be made available following the completion of the 2018 event.

Twitch is a live streaming video platform owned by Twitch Interactive, a subsidiary of Amazon.com, launched in June 2011.

To learn more about the Women Grow 2018 Leadership Summit or to purchase tickets, visit womengrow.com/summit/. All events will be held at The Westin Denver Downtown, centrally located at 1672 Lawrence Street, Denver, CO.

Cannabis Product Sales Projected To Increase For Both Medical And Recreational Use

NEW YORK: A market report by Ameri Research emphasizes that the global legal cannabis market was valued at $14.3 billion in 2016 and is projected to grow at a CAGR of 21.1% from 2017 to 2024. During the forecast period, the demand for cannabis will continue to rise for both recreational and medical use products, and estimated global sales value is expected to reach $63.5 billion. The report points out the legal cannabis market is witnessing robust growth thanks to successful legalization and decriminalization campaigns across North America and Europe. Ameri Research also explained that due to the complex regulatory structure at the state level and federal level, the full potential of the market is not yet realized.

Major components of the cannabis industry are hemp products. “One of the most surprising things we found during this research was how many companies are currently operating in the space, and how few of them are generating significant revenue,” said Bethany Gomez, the Director of Research at Brightfield Group. “Essentially everyone is trying to do hemp, but only a handful are doing it well. It’s seen as easy because it can be sold online but, with restrictions on traditional marketing, it is very difficult to connect with your core consumer and even communicate why they need your product,” Forbes reported.

Marijuana Business Conference Begins Today in Las Vegas

NEVADA: The excitement is palpable as thousands of cannabis industry professionals descend upon Las Vegas for the 5th Annual Marijuana Business Conference & Expo, held as the glitzy RIO hotel.  Last week, Nevada voters legalized adult-use marijuana, adding momentum and enthusiasm to the budding sector, that already represents the fastest-growing industry in the American economy.

An expected 7,500 attendees are expected to walk the floor, and more than 300 exhibitors have set up shop in the largest cannabis industry trade show of the year.  Entertainer Penn Teller, an outspoken Libertarian, will deliver the keynote,  and some 80 industry leaders — growers, technologists, investors, advocates and entrepreneurs — will participate as featured speakers and panelists.

MJ Headline News, will be posting live from the show all week. Be sure to follow us on Twitter: @mjheadlinenews, to stay apprised of all the latest happenings.

The Cannabis Industry Is Coming To Anchorage Alaska

ALASKA:  Alaska is the next US state that will soon be selling recreational marijuana, and the cannabis industry is watching with keen anticipation.

The Alaska Alcohol and Marijuana Control Office issued its first licenses for cannabis producers and testing facilities this month.   Retail licenses are to be given out in September.

In anticipation of the opening of the market, the cannabis industry will assemble at The Last Frontier for CannaCon Alaska — the state’s first major trade show.   Billed as the place  ‘where the cannabis industry does business,’ CannaCon will be a two day event in Anchorage, September 9-10, at the Dena’ina Convention Center.

Bringing producers, processors and retailers together with the businesses that support them,  CannaCon will feature a line up of  experts to share their valuable cannabis industry knowledge with attendees.

For those from legal cannabis states where marijuana retail shops have been operating for a couple of years there is a great deal of interest in seeing how Alaska manages legalization. Back in 2014 when CannaCon had its first show in Tacoma, Washington attendees and exhibitors were filled with hope and anticipation for the future of cannabis. Two years later and those same people are still making their dreams happen but with the realization that legalization comes with a heavy and burdening dose of bureaucracy.

Running a cannabis business in any state has proven to bring very uniques challenges not found in mainstream industries. It is hopeful that Alaska will be able to learn from the mistakes of other states and be able to launch a successful recreational marijuana industry with minimal roadblocks.

[youtube http://www.youtube.com/watch?v=BUbmzGsQQX8&w=560&h=315]

I-502 Accounting Basics: Avoid the Audit

By Anne Van Leynseele, NWMJ Law

WHO’S STANDING NOW; WHO’S STANDING TOMORROW

We keep getting the same questions over and over from different clients so to save everyone’s time; we decided to share the answers with all of you MJBA members.

GOALS OF THIS SERIES:

  1. To increase your business literacy.
  2. To help ensure that you fulfill all of the responsibilities of a small business owner.
  3. To clarify why outside professionals are essential to your survival and how to find and use the best fit for your business.

As a small business owner you are responsible for every part of the business. Understanding the stages of development can help clarify what is important at each stage of growth.

In small business offices around the country sits shoeboxes or file folders full of business receipts, invoices, and accounting data. As the months roll by and the data accumulates, your business is sitting on a growing problem. Learn before it is too late why your accounting system can cost your business and more.

For many start-ups and sole-proprietors, the shoebox or file box was a temporary fix prior to setting up an accounting system. But with procrastination the box can become the nemesis of your small business.

What is an Accounting System?

An accounting system for your business is not as simple as a shoebox or file folder. These items will collect and organize your important business information but you need to look at what the numbers are telling your business. An accounting system will take your business beyond record keeping and provide important financial indictors. An accounting system will have the following parts:

  • Data Collection: Includes business transactions and operations data.
  • Data Organization: A method of sorting data by date and transaction type.
  • Accounting Database: Data entry into a spreadsheet or accounting software program will form the basis of accounting information.
  • Financial Statements and Reports: Balance sheets, income statements, budgets, and timetables comparisons will aid in running your business.
  • Analysis: Regular review of main controls to avoid problems and capitalize on opportunities.

If your small business accounting system is focused only on collection and organization until year end than discover why you need to change over to a complete system.

8 Reasons for Accounting System Upgrade

  1. Expense Creep: It starts off innocently as you begin to add more regular expenses to your operations. Without monthly tracking of expenses and costs, you cash flow can quickly dry up.
  2. Overdue Accounts: Ignoring the need for an accounting system can make tracking accounts receivables a guessing game. Don’t be in the business of bank lending. Misplacing a 90-day overdue account is costing you money.
  3. Cash Flow Crunch: Every business will experience the highs and lows of cash cycles. To overcome periods of cash shortages or to get needed funding, an accounting system will help you identify who owes you money and places for expense cuts. Create a full financial summary every quarter.
  4. Lack of Data Security: How safe is your shoebox? Is it reinforced steel, fireproof and waterproof against major disasters? Important financial information needs to be stored on a removable disk and on a secured offsite location. Never take a chance assuming it can’t happen to you.
  5. Added Costs: Having an accountant or bookkeeper organize and compile your accounting data at year end can be costly. Organize your invoicing, accounts payable, accounts receivable and most important know your cash flow.
  6. Audit Risks: Surviving an IRS audit can be easier if all financial matters of your small business are in order. Providing an auditor with financial statements, organized files, and well tracked transactions will make everything easier for all parties involved.
  7. Bankruptcy is NOT an option in legal cannabis: With the majority of businesses failing in the first 5 years, poor financial management remains one of the top reasons for failure. It is your responsibility as a small business owner to maintain and regularly assess your financials. Not putting an accounting system in place early during your startup can mean the end of business. Proper accounting can help you see money losing strategies before it is too late.
  8. Financing Difficulty: Do not bring a shoebox of invoices and receipts to your banker or investor meeting. The professional appearance of your company’s books is part of a winning strategy to financing.

The price of business ownership comes with the responsibility of establishing an accounting system. On the plus side you feel more control over your business, less stress, and better profitability.

 

WHERE DO YOU STAND?

The accounting cycle for a small business begins with establishing the chart of accounts for that business and ends with closing the books for that business at the end of the accounting time period. The accounting cycle is a series of steps that the firm takes every accounting time period in order to take account of its financial transactions.

Here are the steps in the accounting cycle for a small business:

  1. Develop the Chart of Accounts for your Small Business
  2. Understand The Source Document in an Accounting Transaction
  3. Accounting Journal Entries
  4. Construct the General Ledger for your Small Business
  5. How to Prepare a Trial Balance
  6. How to Make Adjusting Entries in your Accounting Journals
  7. Prepare the Financial Statements
  8. Closing Entries as Part of the Accounting Cycle

Washington State Business Entities

You may operate your business under any one of several business structures in Washington State. Each type of structure has advantages and disadvantages that should be considered. The descriptions of the structures below are provided to assist applicants and are not intended to be legal definitions with the force of law. You should contact an attorney, accountant, financial advisor, banker, or other business or legal advisors to determine which form is most suitable for your business or organization.

  • A Sole Proprietorship is one individual or married couple in business alone. Sole proprietorship’s are the most common form of business structure. This type of business is simple to form and operate, and may enjoy greater flexibility of management and fewer legal controls. However, the business owner is personally liable for all debts incurred by the business.
  • A General Partnership is composed of two or more persons (usually not a married couple) who agree to contribute money, labor, and/or skill to a business. Each partner shares the profits, losses, and management of the business and each partner is personally and equally liable for debts of the partnership. Formal terms of the partnership are usually contained in a written partnership agreement.
  • A Limited Partnership* is composed of one or more general partners and one or more limited partners. The general partners manage the business and share fully in its profits and losses. Limited partners share in the profits of the business, but their losses are limited to the extent of their investment. Limited partners are usually not involved in the day-to-day operations of the business. Note: A limited partnership may opt to become a Limited Liability Limited Partnership* by including a statement to that effect in its certificate of limited partnership. Status as a limited liability limited partnership provides general partners with a shield from liability for obligations of the limited liability limited partnership.
  • A Limited Liability Partnership* is similar to a General Partnership except that normally a partner does not have personal liability for the negligence of another partner. This business structure is used most commonly by professionals such as accountants and lawyers.
  • The Limited Liability Company (LLC)* An LLC is formed by one or more individuals or entities through a special written agreement. The agreement details the organization of the LLC, including: provisions for management, assignability of interests, and distribution of profits or losses. Limited liability companies are permitted to engage in any lawful, for profit business or activity other than banking or insurance. Doing business as an LLC may yield tax or financial benefits.
  • A Corporation* is a legal entity, a corporation has certain rights, privileges, and liabilities beyond those of an individual. Doing business as a corporation may yield tax or financial benefits, but these can be offset by other considerations, such as decreased personal control. Corporations may be formed for profit or nonprofit purpose.
  • A Nonprofit Corporation* A nonprofit corporation is a legal entity and is typically run to further some sort of ideal or goal, rather than in the interests of profit. Many nonprofits serve the public interest, but some do engage in private sector activities. If your nonprofit organization is or plans to fundraise from the public, it may also be required to register with the Charities Program of the Washington Secretary of State.

Items marked with * must register with the Secretary of State, Division of Corporations and Charities.

See table below

LESSONS:

Set-up your company in a way that minimizes your tax liability

Make sure you understand your tax obligations

Keep a schedule of filing and payment deadlines

Do not fall behind

It is not too late to clean up the past

Money flows through a company and someone must keep track of it. A budget is a basic tool to understand the flow. A budget will inform your decisions by helping you decide how to allocate resources, control spending, and provide a way to plan for the next year.

Within an operating budget there are two major categories: fixed costs and variable costs. Each industry is going to have different forms or types of fixed costs.  In some industries, salaries are paid even if no work is accomplished. In 502 world, the insurance company has to be paid as a legal requirement for you to be in business. The sooner you offset the fixed costs within the accounting period, the sooner you will generate a profit, but to know what that number is you must have a budget. The rest I will leave to the experts on April 19th.

DRAFT OPERATING BUDGET

FIXED COSTS – Fixed costs are those cash expenses that must be paid whether the business produces or sells a single product. Some of these costs have a variable element, but you know the business will need to pay for the line item.
Building/location rent  
Equipment rent  
Advertising  
Website hosting/maintenance  
Insurance  
Software licenses  
Taxes  
License fees  
Utilities  
Dues and subscriptions  
CPA fees  
Legal fees  
Bank fees  
Security  
 
VARIABLE COSTS – A variable cost is a cost that changes in relation to variations in an activity. In a business, the “activity” is frequently production volume, with sales volume being another triggering event that increases variable costs.
Payroll  
Payroll taxes  
Benefits  
Contract labor  
Production supplies  
Packaging  
Commissions  
Delivery costs  
 

DRAFT CAPITAL EXPENDITURES BUDGET

Property purchase  
Computers/printer  
Tenant Improvements  
Buildout  
Farm equipment  
Equipment upgrades  
Emergency fund