If you’re a sole proprietor who wants to legally do business without the massive cost of registering a corporate entity, you should consider using a fictitious business name or DBA (doing business as). You can do many of the same things as a regular business, such as advertise and accept payments but you need to understand what you can do.

Why and How of DBA

If you’re planning to operate a chain of businesses, or create a series of web sites they will use, a DBA will save you a lot of money. It allows a legal entity, individual, or company, to operate multiple businesses without having to go through the arduous process of creating a full-fledged legal entity. In some cases you’ll need a part of your name, and a description of the product or service you’re going to provide, such as J. Doe Marketing Research. If there is more than one person involved, you need to file an assumed name that’s different from your legal name, such as J. Doe Group.

DBA gives business owners a more professional appearance, and if you have a home-based business, it’s a great convenience. The process to register DBA businesses is different in each state but the price is less than $100, and in most states less than $50. In some cases, you’ll just need to register with the county clerk’s office or register with your state. As a DBA, you can open a business checking account, have a business listing, or even have employees. In that case, your DBA will need a federal employer identification number. Depending on how it’s done and its location, DBAs may need to file state as well as federal taxes every year.

Be Careful

The benefits of having a DBA far outweigh the costs, and that’s why a lot of larger companies use these fictitious names when expanding their businesses to another state or even another country. Even though you can do a lot with your DBA, there is very little legal protection to the business owner. It’s a name-only entity that is nothing more than a brand name. It’s transparent so ownership can be traced. Branding can also be an issue, especially if your name is not descriptive enough, and you may wind up having to constantly explain who you are and what you do.

Filing incorporation papers is an involved and expensive process. If your business is one of low liability and legal risk, it makes more sense to delay corporate filing until a later stage. As your business matures, the legal and tax realities of your situation may force you to make that move. If you’re in the business of finance, or law, or any other profession where you are responsible for providing a product or service that could lead to legal liability, a DBA without a legal entity to back it up doesn’t make sense. The best thing to do is to check with your attorney, as well as local and state governments, to see what your options are.

Image credit

Shopping for a new home can be a lot of fun. Thinking about moving into a new home and a new neighborhood can be one of the most pleasurable experiences many will go through. The only thing that many people do not like is when it comes to thinking about actually spending money to get a new home. Homes are expensive, so finding any way to save money will help to make it easier for you to get the home you actually want to have. Among the ways you can save when buying a new home are to have an edge for bargaining the price of the home, get the best rates on your mortgage, and try to pay off your home early. This will help you to save thousands of dollars.

Bargain with the Sellers

The best bet for saving a lot of money whenever you are buying a home is to buy directly from the sellers. Also, if you know something about the home or the area, it can give you an edge when negotiating the deal on the home. If you know the home has been on the market for a long time, you can negotiate a better price because the sellers are ready to unload. If the sellers are not even living in the home, it is just a drag on their budget. Any price you offer them, even a loss, will help them to save by no longer spending money on the mortgage.

Get the Best Rates

The interest rates you pay on the mortgage will also play a big role in how much you pay for a home in the long run. If you are able to negotiate the best mortgage interest rates on your loan, you will save a lot of money. Getting your loan at a good time is important, but so is making sure you are getting the loan from the right people. Some lenders have more leeway in brokering the interest rate you will be responsible for. Look for those who start with a low rate and see if you can get them to go even lower. This will make a difference of literally thousands of dollars over the life of your loan.

Pay off Your Home Early

One of the biggest expenses when you are purchasing a home is the interest. This is why the sooner you can pay off the home, the more money you will be able to save. This does not mean to save up a lot of money and pay a big payment near the end of the loan. Instead, pay a little extra on each of your payments. This will allow you to slowly chip away at the massive amount left to pay on the loan. It will also allow you to save up for other things you want to purchase. Many will make the goal of making an extra payment a year to minimize the amount of money being spent over the life of the loan.

Image credit