Dear Karen: Can a small-business owner collect unemployment? My company has revenue, but not enough to pay me a salary.
Answer: It depends on how the business is structured and whether it is paying into California’s unemployment insurance fund.
Sole proprietors aren’t required to contribute to the fund, so they aren’t eligible to collect benefits, said Kevin Lilly, an attorney and shareholder at Littler Mendelson in Los Angeles.
“However, a small-business owner that owns a Subchapter S-corporation could collect unemployment, as the owner of the corporation is normally reported as an employee and the officers of a corporation are employees by statute,” he said.
If you want to stay in business, you could secure outside employment and if your company generates any profit at the end of the year, distribute it to yourself as a bonus or a dividend, Lilly said.
How a machine can pay for itself
Dear Karen: My small printing business just bought an expensive new printer. How can I market this machine to recoup my investment in five years?
Answer: List the amazing things your new printer can do and how specifically it will meet the needs of your present and future customers, said Lynn Sarkany, principal at MarketFinders in Glendale. Then tout the machine’s problem-solving solutions in your promotional mailings, on wall posters and on signage placed out front.
You should be able to get promotional pieces and ideas from the printer’s manufacturer, said Flo Selfman, a Los Angeles public relations and marketing consultant. “Do a mailer to your chamber of commerce and offer a deal to members,” she said. “Offer a special to your neighborhood businesses.”
Ultimately, you may have to reach outside your neighborhood, Sarkany said: “Consider not only individual customers but organizational ones as well, such as schools, hospitals and larger businesses. If the marketing net is made big enough, the investment will be worth it.”
Don’t forget that equipment can pay you back: Make sure that you depreciate the printer and other business machines, including your telephones and computers.
Turning an idea into a prototype
Dear Karen: I have an invention in theory and need to test it. How do I go about this?
Answer: Hire a model-making company or machine shop that works with the material from which your product will be made, said Phil Baker, a San Diego product developer and author of “From Concept to Consumer.” Ask the shop to build a prototype of your invention.
Find the proper fabricator by searching online using keywords such as “metal fabricator” and your region. You can also find shops through their trade associations. Look at sites such as Internet Public Library, at www.ipl.org/div/aon.
“Depending on the complexity of your invention, you may first need to design it,” Baker said.
“The designers provide the company building the prototype with the drawings and details. For simple inventions, a good model maker might be able to do both the rough design and prototype.”
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