How Much is a Fair Profit? Part I of V – Owner Compensation

Owner Compensation in an S-Corporation

Jun 5, 2015

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One of the tax attributes of an S-Corporation over other forms of tax entities is the ability to reduce the overall tax obligation. Naturally the lower the overall tax requirement the more profit generated for the owner(s). The S-Corporation allows an owner to reduce their tax responsibility via the compensation package assigned to the owner.

How Much is a Fair Profit? Part III of V – Risk

Mar 31, 2013

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David J Hoare MSA

in Business Principles Start-Up

A third factor in determining a fair profit percentage is risk. Risk is divided into two types. The first is insurable and the second is uninsurable risks. Insurable risks are mitigated and have very little to no effect on the profit formula due to transferring the risk to a third party known as the insurance underwriter. Uninsurable…

How Much is a Fair Profit? Part II of V – The Economic Cycle

Mar 18, 2013

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by

David J Hoare MSA

in Business Principles Start-Up

One of the primary purposes of a profit is to provide funds during downturns in the business cycle. Often referred to as the economic cycle, there are two types of cycles. The first is industry related. The second is broader in scope and is economy wide.