| Starting Business Secrets will help you to start your | | | | statement. |
| own business successfully. | | | | For corporations, you'll also need a corporate resolution |
| The American Dream is, and always will be, to come | | | | approving of the opening of your business account. |
| up with an idea, start a business and become rich from | | | | There are different policies exercised in just about |
| your own efforts. Based upon this motivation, | | | | every state regarding installation/hook-up charges by |
| thousands of businesses fail each year, due primarily | | | | the telephone and utility companies. Some require a |
| to not being familiar with the basics involved in running | | | | deposit, and some don't. |
| a business. | | | | You'll find that a great number of city business license |
| This report will enlighten you, and give you a number of | | | | departments are there solely for the purpose of |
| suggestions you can use to better guarantee your | | | | collecting another tax. Depending on the type of |
| chances for success. This report is written with the | | | | business you're asking a license for, the building and |
| warning that any and every business venture contains | | | | zoning people may inspect your premises for |
| certain inherent risks, and any number of alternatives. | | | | soundness of structure and safety. Generally, you |
| We do not espouse that any one way is the right way | | | | won't encounter any difficulties - you simply pay your |
| or that our suggestions are the only way. On the | | | | fee to operate your business in that city, and the clerk |
| contrary, we advise that before investing any money | | | | types your name onto a city license certificate. |
| in a business venture, you seek counselling and help | | | | Relative to sales tax permits and licenses, each state's |
| from a qualified accountant and/or attorney. | | | | rules and regulations very widely. The best thing to do |
| Just about the first thing you should consider before | | | | is call your state offices and ask for information |
| deciding to start or purchase a business is the legal | | | | concerning registry and collection procedures. Many |
| form you'll be operating under. There are basically four | | | | states require an advance deposit or bond, and you'll |
| choices: sole proprietorship, partnership, limited | | | | find that some wholesalers or manufacturers will not |
| partnership, and/or corporation. | | | | sell to you at wholesale prices until you can show |
| Each has a number of advantages and | | | | them your sales tax permit or number. |
| disadvantages. We'll try to enumerate some of them | | | | Should your business entail selling your products or |
| for you. | | | | services across state lines, in another state, you're not |
| As much as anything else, for many people starting a | | | | required to collect taxes except in those where you |
| business is a form of ego-gratification, and they form a | | | | have offices or stores. |
| corporation for some sort of prestige gain - just to | | | | You may find also that your particular business |
| say, "I own a corporation." | | | | requires the collection of Federal Excise Taxes. For |
| With just a little bit of observation, you'll find that one of | | | | information along these lines, check in with your local |
| the major causes of business failures is due to the | | | | office of the Internal Revenue Service. |
| founder wasting start-up capital on frills, such as an | | | | Some states also require certain businesses to hold |
| impressive store- front office, expensive furnishings, | | | | state licenses, such as those required in many states |
| and corporate legal costs. | | | | for TV Repairmen. |
| One of the basic traits you must develop it you're | | | | These are known as "occupational permits" and are |
| going to be successful in business, is a tight hold on | | | | most often required of barbers, hair stylists, real estate |
| your expenditures. In fact, a good rule of thumb is that | | | | people and a number of other consumer oriented |
| anything that does not make money for yo or protect | | | | businesses. If you have any doubts, check with your |
| your investment, should not be purchased at this time. | | | | state offices for a list of those occupations that |
| Very definitely, this applies to the expense of setting | | | | require licensing. |
| up your own corporation. | | | | Any business doing business in any type of interstate |
| Unless you have a partnership and start your business | | | | commerce is subject to federal regulations, usually |
| as such, the only real advantage to forming a | | | | through the Federal Trade Commission. This means |
| corporation would appear to be that a corporate | | | | that any business that shops, sells or advertises in |
| structure will semi-protect the property you personally | | | | more than one state is subject to such regulation, and |
| own. | | | | this includes even the smallest of mail order operations. |
| As an example, you own a home and car. You form a | | | | Normally, very few business people ever have and |
| corporation to protect these possessions from | | | | contact with the federal regulatory agencies. The only |
| business losses. Yet, if you can be found guilty of | | | | exceptions being when there is a question of your |
| misusing corporate funds, your business creditors can | | | | operating your business unethically or illegally. |
| pierce the corporate shield and come after your | | | | Any business that sells or distributes food in any |
| possessions. | | | | manner almost always requires a county health |
| Basically, if you invest everything you have in your | | | | department permit. If your business falls into this |
| business, as most newcomers do, you don't usually | | | | category, simply call the county health department and |
| need a corporation because you have nothing to | | | | invite them out to your place of business for an |
| protect. Your household possessions, personal | | | | inspection. The fees generally range from about $25, |
| belongings, generally your car, and even a portion of | | | | depending on the size of your business when they first |
| the equity in your home is protected by the | | | | inspect it for permit approval. |
| homestead provision of the Federal Bankruptcy Act, | | | | There are also a number of businesses that require |
| and cannot be taken away from you. | | | | inspection by a fire marshall, and fire department |
| As a sole proprietor or partner of a business you'll be | | | | approval. Generally, these are those that handle |
| paying taxes on your overall earnings, much the same | | | | flammable materials or attract large numbers of |
| as if you were holding down a salaried or hourly paid | | | | people, such as a theater. Overall, the local fire |
| job. Whether you do or don't take out money as a | | | | department has to be allowed to inspect your |
| salary will have no bearing on the earnings of your | | | | premises whenever they desire to do so. |
| business and tax return. | | | | You may also run into a requirement for an air and/or |
| The often advertised advantage of incorporating, that | | | | water pollution control permit. These specifically apply |
| you can manipulate your salary in order to save on tax | | | | to any business that burns anything, discharges |
| dollars, is real because of corporation laws. However, | | | | anything into the sewers or waterways, or use any |
| the IRS frowns on this practice. When your business is | | | | gas-producing product, such as a paint sprayer. |
| successful and making a lot of money, definitely check | | | | Without a doubt, you'll need to check on local |
| with your accountant on the advantages of | | | | regulations relating to advertising display signs. Each |
| incorporating. | | | | city or township makes its own rules and then |
| As a corporation, you'll be subject to a number of | | | | enforces those rules according to its own thinking |
| other drawbacks as well: generally higher state taxes, | | | | -check before you contract to have a sign made for |
| stricter laws concerning the operation of your business, | | | | your business. |
| more elaborate accounting procedures, and legal | | | | The design and placement of your sign is very |
| papers that are required just about every time you | | | | important to your business - specifically to retail |
| make a major move or sign almost any contract. | | | | establishments - but let me remind you that your |
| Thus, your legal and accounting fees will be much | | | | business sign is usually the first thing a potential |
| higher as a corporation than will those required for a | | | | customer sees and as such, it should catch his eye |
| sole proprietorship type of business. | | | | and leave an impression that lasts. It would be a good |
| As a sole proprietor or partnership, you'll find many | | | | idea to ride around your town and take a look at the |
| areas require the registration of your business name. | | | | signs that catch your eye, and try to determine the |
| The cost however, is minimal, ranging from $5 to $100. | | | | impression of the business that sign leaves on you. |
| About the best way to find out what laws apply in | | | | This is a basic learning formula for determining the |
| your area, is to call your bank and ask if they need a | | | | design, size and placement of your business sign. |
| fictitious name registration card or certificate in order | | | | Some of the other things to consider before opening |
| for you to open a business account. | | | | for business - If you intend to employ one or more |
| Selecting a name for your business is quite important | | | | employees, you'll be required to deduct Federal Income |
| to you and particularly relative to advertising. Your | | | | Taxes, and Social Security payments from their |
| business name should describe the product or services | | | | checks. This will involve your filing for a Federal Tax |
| you offer. Fancy names such as, Linda's Clipping | | | | Number and necessitates contact with your local IRS |
| Service will lose potential "walk-in and passing" | | | | Office. |
| customers to the beauty shop across the street that | | | | Most states have "unemployment taxes" which will |
| calls itself, Patti's Beauty Salon or Jane's Hair Styling | | | | have to be deducted from the paychecks of any |
| Shop. | | | | employees you hire. And there are a number of states |
| The advantage of using your full name in the title of | | | | that have income taxes - disability insurance - and any |
| your business, such as Johnny Jones' Meat Lockers, | | | | number of other taxes. Again, the best thing to do is |
| has the advantage of making credit somewhat easier | | | | check with your local office of the IRS. And above all |
| to come by - provided you pay your bills on time - but | | | | else, don't forget to ask for the rules of the minimum |
| it also includes the disadvantage of confining your | | | | wage law, and comply. |
| services to a local or at most, a regional area. | | | | When your business grows to the point of needing |
| Should you buy, lease, or rent a space for your | | | | additional help, don't be afraid to look for and hire the |
| business? think twice before you make any decision | | | | help you need. when you're ready to hire someone, |
| along these lines. Most businesses tend to grow quickly | | | | simply run an ad in your local paper and/or register |
| or they never get off the ground. | | | | your needs with the local office of your state's |
| There are a few exceptions, but only a very few, that | | | | employment service. Businesses either grow or die, |
| tend to grow at a modified rate. | | | | and those that grow eventually need more people in |
| So, buying a piece of property and setting up your | | | | order to continue growing. |
| business on or within that property, obligates you to | | | | When that time comes, hire the additional people you |
| ownership regardless of what happens to your | | | | need, and your business will continue growing. If you |
| business. | | | | don't, for whatever reason, you'll find yourself married |
| Leases are almost always very strong contracts | | | | to your business and your business growth stymied. |
| written by attorneys to the advantage of the | | | | Regardless of how small your business is when you |
| property-owner. When you sign an agreement to pay | | | | begin, never walk in with the thought in mind that it's |
| someone for the use of their space over any length of | | | | something to keep you busy. Anyone with an attitude |
| time, you're "nailed in" to paying for that space | | | | of that kind is a fool. You begin and make a business |
| regardless of what happens to your business. | | | | successful in order to realize financial freedom. |
| In the beginning, it's wise to either get the shortest-term | | | | Establish your business. Put it on its feet, and then hire |
| lease possible, or arrange to rent with an option to | | | | other people to do the work for you. And those |
| lease at a later date. This does not apply to a retail | | | | businesses that require an operations manager, or |
| business, unless your particular business happens to be | | | | someone to run a phase of the business you're too |
| an untried one. | | | | busy to handle, hire the person needed or the business |
| Definitely, you should open a business bank account. In | | | | will surely suffer. |
| selecting a bank for your business, scout around and | | | | To protect the investment of your business, you need |
| look for one that can, and will help you. Determine | | | | business insurance. If you've never had any |
| what your banking needs will be, and then via | | | | experience with business insurance, simply look under |
| telephone, interview the managers of the banks in your | | | | the heading of "business insurance" in your phone |
| area. The important convenient bank to your business | | | | directory. Ask for bids from several different |
| location. | | | | companies or agents...Primarily, you should have a |
| A point to remember: the closer you can make the | | | | policy that gives you general liability, fire, workmen's |
| relationship between you and the bank manager, the | | | | compensation, business interruption, and vehicle |
| better your chances are going to be for approval on | | | | coverage. You amy also want coverage against |
| loans and/or special favors you may need at a later | | | | possible losses related to burglary, robbery, Life & |
| date. | | | | Accident, Key Man, and Fidelity Bonds. |
| Try to become acquainted with as many of the bank | | | | As the sole proprietor of a business, you won't be paid |
| employees as possible. The better you know them, | | | | as an employee, so there will be no income tax |
| the more courtesies they'll be extending especially to | | | | deducted from whatever you withdraw from the |
| you in the course of your association. | | | | company's earnings. What you'll have to do is a gain |
| Just as a doctor is a specialist in his field, and you go | | | | check with the IRS Office for a Tax Guide For Small |
| to him for medical problems, your banker is a specialist | | | | Businesses Handbook, and probably end up filing an |
| in his field and you should go to him for your money | | | | estimated tax return on a quarterly basis. |
| problems. In business, you'll have to learn that everyone | | | | The minute you open your doors for business, you'll |
| is an expert in his own line of work, and in your | | | | have to spend some time engaged in the work of |
| associations with other business people, refrain from | | | | bookkeeping. Exactly how, and using what forms, you |
| acting like a "sharpie" and/or pretending that you know | | | | keep books, should be on the recommendations of a |
| exactly how everything works in someone else's | | | | good tax counselor...The same holds true for your |
| specialty. | | | | overall business and/or payroll accounting system. |
| You'll find that very often, different banks specialize in | | | | Look for an experienced CPA that knows the |
| different types of businesses. As an example, you're | | | | accounting problems to your particular kind of business, |
| sure to find banks that specialize in real estate | | | | and solicit his advise/counseling. |
| transactions, export- import businesses, and even | | | | If your business is going to involve the possible |
| manufacturing operations only. | | | | purchase or lease of operating equipment, again seek |
| What I'm saying here is that if you're planning to sella | | | | the help of your tax counselor for the most |
| fairly expensive item, your customers will probably | | | | advantageous method of obtaining the needed |
| need and/or want financing. It will behoove you to | | | | equipment. |
| select a bank familiar with your type of product that | | | | Basically, arranging for your suppliers to give you |
| will afford your customers, through you, contract | | | | materials on credit will depend upon your honesty and |
| financing. | | | | personal financial statement. The best way is usually a |
| Some of the questions you should ask of your banker | | | | personal visit to the person with the power to approve |
| include the following: | | | | or disapprove of credit at the company where you |
| Is it necessary to maintain a certain balance in your | | | | want to set up a credit account. Show him your |
| account before the bank will approve a loan for you? | | | | financial statement, and explain your prospects for |
| What qualifications must you have in order to obtain a | | | | success. Then assure him that you've always honored |
| line of credit with the bank? | | | | all of your obligations, and that if ever there's a |
| Does the bank limit the number of loans, or types of | | | | question or problem, you'd like for him to call you at |
| loans it will approve for small businesses? | | | | home. And of course, give him your home phone |
| What is the bank's policy regarding the size of a check | | | | number. |
| you might deposit that requires holding for collection? | | | | We won't go into the exigencies of advertising your |
| And what about checks less than that amount - will | | | | products, services or business here, but there is |
| they be immediately credited to your account? | | | | something along these lines you should always keep in |
| In almost all types of businesses, it will be to your | | | | mind. The best kind of advertising your business can |
| benefit to set up with your bank, a method of handling | | | | receive is that you don't really pay for - publicity. |
| VISA, Master Charge, and regional credit cards. The | | | | When something unusual happens to you, your |
| important thing here is to ultimately set up your | | | | business, or your employees - that's news, so be sure |
| account in the bank that will service all of these credit | | | | to tell the news media in your area about it. |
| transactions for you - one stop for all your banking | | | | The most important ingredient of your eventual |
| needs. In most instances, you'll find that having the | | | | success will be the soundness of the planning you did |
| capability to fill orders/make sales via credit card | | | | before you started your business. Any number of bad |
| transactions, will increase your volume of sales | | | | things can really throw your business into a tailspin, but |
| appreciatively. | | | | it you've done your homework well - really set up a |
| Once you've made the decision as to which bank is | | | | detailed business plan before starting - your losses or |
| going to handle your account, you'll need your Social | | | | setbacks will be minimal. Success takes planning, and |
| Security Number or your Federal Employer's | | | | within this report, you've got a basic checklist...The rest |
| Identification Number, your driver's license, the fictitious | | | | is up to you...Good luck, and may your life overflow |
| name certificate, and if you're requesting a VISA or | | | | with success in all that you undertake from this |
| Master Charge franchise, you'll also need a financial | | | | moment forward. |