| Q: After working for a telecommunications for 20 | | | | A relatively new ownership structure is the Limited |
| years my position was outsourced overseas and now | | | | Liability Corporation (LLC). An LLC provides the limited |
| I am ready to start my own consulting business. What | | | | liability features of a corporation and the tax |
| are they key considerations in establishing and | | | | efficiencies and operational flexibilities of a partnership. |
| operating a new business in New Jersey? | | | | Speak with an attorney and financial advisor before |
| The Problem - Starting and Operating a New Business | | | | selecting an ownership structure. |
| The time you spend establishing and operating a | | | | Protecting Your Business |
| business can provide great joy or great pain, | | | | Imagine if you were testing a $1 million communications |
| depending on how you go about it. Simply registering a | | | | system for a client when the roof of your building |
| business incorrectly can prevent even the best | | | | collapsed and destroyed the system. Without |
| business from commencing operations. Taking the | | | | insurance, your business could be destroyed and you |
| important steps discussed below and can set the | | | | could be left with years of personal financial obligations. |
| stage for a successful business. | | | | Property and liability insurance insures your business |
| The Solution - Follow the Laws, Create the Rules | | | | against such things as a fire in your office or an injury |
| Let's say you want to name your business 'Premier | | | | caused by one of your communication systems. |
| Communications Consultants'. Whether or not you | | | | Speak with an insurance agent to fully understand the |
| offer premier communications consultants is not the | | | | risks and rewards of protecting your business. |
| legal issue. The legal issue is the requirement that you | | | | Operating Your Business |
| register your business name. With the exception of | | | | Along with the daily client calls and project proposals |
| conducting business in your own name, the state of | | | | there are the administrative responsibilities. Employers |
| New Jersey (NJ) requires you to register a trade | | | | in NJ are responsible for reporting wages, withholding |
| name. | | | | taxes and forwarding payments on a monthly or |
| Verify that your business name is not already taken, | | | | quarterly basis. Information on the following items is |
| as this could preclude your use of the name. The state | | | | required: wages, employee with holdings of NJ gross |
| may also require you to obtain and maintain licenses. | | | | income tax, state unemployment insurance, workforce |
| New Jersey issues over 150 different types of | | | | development partnership fund and state disability |
| occupational licenses, from electrical inspector to | | | | insurance. |
| professional engineer. Conducting business in NJ | | | | All NJ employers, not covered by Federal programs, |
| without required licenses could put your clients, your | | | | must have workers' compensation coverage or be |
| company and you are great legal risk. Obtain all | | | | approved for self-insurance. Just as your job was |
| required licenses before commencing business. | | | | outsourced, consider outsourcing these administrative |
| Choosing an Ownership Structure | | | | responsibilities so you can focus on your key strengths. |
| The majority of businesses start as sole | | | | Create the Rules |
| proprietorships. As the name implies, there is only one | | | | Lest we forget, one of the reasons you are starting a |
| owner. The advantages to a sole proprietorship | | | | business is to make your mark. In establishing your |
| structure include the ease of formation and tax | | | | company rules, utilize the strong policies your former |
| reporting. A critical disadvantage is the unlimited | | | | employer created and discard the weak ones. Do not |
| personal legal and financial responsibility of the sole | | | | let lax industry standards guide your company rules. |
| proprietor. | | | | Rather, set company benchmarks that exceed the |
| Partnerships are for businesses with more than one | | | | norm and wow your clients. Soon, they will be referring |
| owner. Most partnerships have the same advantages | | | | additional clients to you. |
| of sole proprietorships, but a key disadvantage is the | | | | Action Steps - Start a New Business |
| shared responsibilities partners accept for one another. | | | | Starting a business requires work, but following the |
| Corporations are separate legal entities from the | | | | steps outlined above can greatly increase your |
| owners. The advantages to a corporation are the | | | | success rate. You do not have to be an expert in |
| shareholders limited liability and the relative ease of | | | | every aspect of your business - seek outside |
| raising capital. Key disadvantages of corporations | | | | professionals and tap their knowledge base. |
| include higher taxes and cumbersome documentation. | | | | |