Wednesday, 25 September 2013

SECRETS TO SUCCESSFULLY STARTING YOUR OWN BUSINESS




The American Dream is, and always will be, to come up with an



idea, start a business and become rich from your own efforts.



Based upon this motivation, thousands of businesses fail each



year, due primarily to not being familiar with the basics



involved in running



a business.





This report will enlighten you, and give you a number of



suggestions you can use to better guarantee your chances for



success. This report is written with the warning that any and



every business venture contains certain inherent risks, and any



number of alternatives. We do not espouse that any one way is



the right way or that our suggestions are the only way. On the



contrary, we advise that before investing any money in a business



venture, you seek counselling and help from a qualified



accountant and/or attorney.





Just about the first thing you should consider before deciding to



start or purchase a business is the legal form you'll be



operating under. There are basically four choices: sole



proprietorship, partnership, limited partnership, and/or



corporation.





Each has a number of advantages and disadvantages. We'll try to



enumerate some of them for you.





As much as anything else, for many people starting a business is



a form of ego-gratification, and they form a corporation for some



sort of prestige gain - just to say, "I own a corporation."





With just a little bit of observation, you'll find that one of



the major causes of business failures is due to the founder



wasting start-up capital on frills, such as an impressive



store-front office, expensive furnishings, and corporate legal



costs.





One of the basic traits you must develop it you're going to be



successful in business, is a tight hold on your expenditures. In



fact, a good rule of thumb is that anything that does not make



money for yo or protect your investment, should not be purchased



at this time. Very definitely, this applies to the expense of



setting up your own corporation.





Unless you have a partnership and start your business as such,



the only real advantage to forming a corporation would appear to



be that a corporate structure will semi-protect the property you



personally own.





As an example, you own a home and car. You form a corporation to



protect these possessions from business losses. Yet, if you can



be found guilty of misusing corporate funds, your business



creditors can pierce the corporate shield and come after your



possessions.





Basically, if you invest everything you have in your business, as



most newcomers do, you don't usually need a corporation because



you have nothing to protect. Your household possessions,



personal belongings, generally your car, and even a portion of



the equity in your home is protected by the homestead provision



of the Federal Bankruptcy Act, and cannot be taken away from you.





As a sole proprietor or partner of a business you'll be paying



taxes on your overall earnings, much the same as if you were



holding down a salaried or hourly paid job. Whether you do or



don't take out money as a salary will have no bearing on the



earnings of your business and tax return.





The often advertised advantage of incorporating, that you can



manipulate your salary in order to save on tax dollars, is real



because of corporation laws. However, the IRS frowns on this



practice. When your business is successful and making a lot of



money, definitely check with your accountant on the advantages of



incorporating.





As a corporation, you'll be subject to a number of other



drawbacks as well: generally higher state taxes, stricter laws



concerning the operation of your business, more elaborate



accounting procedures, and legal papers that are required just



about every time you make a major move or sign almost any



contract. Thus, your legal and accounting fees will be much



higher as a corporation than will those required for a sole



proprietorship type of business.





As a sole proprietor or partnership, you'll find many areas



require the registration of your business name. The cost



however, is minimal, ranging from $5 to $100. About the best way



to find out what laws apply in your area, is to call your bank



and ask if they need a fictitious name registration card or



certificate in order for you to open a business account.





Selecting a name for your business is quite important to you and



particularly relative to advertising. Your business name should



describe the product or services you offer. Fancy names such as,



Linda's Clipping Service will lose potential "walk-in and



passing" customers to the beauty shop across the street that



calls itself, Patti's Beauty Salon or Jane's Hair Styling Shop.





The advantage of using your full name in the title of your



business, such as Johnny Jones' Meat Lockers, has the advantage



of making credit somewhat easier to come by - provided you pay



your bills on time - but it also includes the disadvantage of



confining your services to a local or at most, a regional area.





Should you buy, lease, or rent a space for your business? think



twice before you make any decision along these lines. Most



businesses tend to grow quickly or they never get off the ground.





There are a few exceptions, but only a very few, that tend to



grow at a modified rate.





So, buying a piece of property and setting up your business on or



within that property, obligates you to ownership regardless of



what happens to your business.





Leases are almost always very strong contracts written by



attorneys to the advantage of the property-owner. When you sign



an agreement to pay someone for the use of their space over any



length of time, you're "nailed in" to paying for that space



regardless of what happens to your business.





In the beginning, it's wise to either get the shortest-term lease



possible, or arrange to rent with an option to lease at a later



date. This does not apply to a retail business, unless your



particular business happens to be an untried one.





Definitely, you should open a business bank account. In



selecting a bank for your business, scout around and look for one



that can, and will help you. Determine what your banking needs



will be, and then via telephone, interview the managers of the



banks in your area. The important convenient bank to your



business location.





A point to remember: the closer you can make the relationship



between you and the bank manager, the better your chances are



going to be for approval on loans and/or special favors you may



need at a later date.





Try to become acquainted with as many of the bank employees as



possible. The better you know them, the more courtesies they'll



be extending especially to you in the course of your association.





Just as a doctor is a specialist in his field, and you go to him



for medical problems, your banker is a specialist in his field



and you should go to him for your money problems. In business,



you'll have to learn that everyone is an expert in his own line



of work, and in your associations with other business people,



refrain from acting like a "sharpie" and/or pretending that you



know exactly how everything works in someone else's specialty.





You'll find that very often, different banks specialize in



different types of businesses. As an example, you're sure to



find banks that specialize in real estate transactions,



export-import businesses, and even manufacturing operations only.





What I'm saying here is that if you're planning to sella fairly



expensive item, your customers will probably need and/or want



financing. It will behoove you to select a bank familiar with



your type of product that will afford your customers, through



you, contract financing.





Some of the questions you should ask of your banker include the



following:





Is it necessary to maintain a certain balance in your account



before the bank will approve a loan for you?



What qualifications must you have in order to obtain a line of



credit with the bank?





Does the bank limit the number of loans, or types of loans it



will approve for small businesses?





What is the bank's policy regarding the size of a check you might



deposit that requires holding for collection?





And what about checks less than that amount - will they be



immediately credited to your account?





In almost all types of businesses, it will be to your benefit to



set up with your bank, a method of handling VISA, Master Charge,



and regional credit cards. The important thing here is to



ultimately set up your account in the bank that will service all



of these credit transactions for you - one stop for all your



banking needs. In most instances, you'll find that having the



capability to fill orders/make sales via credit card



transactions, will increase your volume of sales appreciatively.





Once you've made the decision as to which bank is going to handle



your account, you'll need your Social Security Number or your



Federal Employer's Identification Number, your driver's license,



the fictitious name certificate, and if you're requesting a VISA



or Master Charge franchise, you'll also need a financial



statement.





For corporations, you'll also need a corporate resolution



approving of the opening of your business account.





There are different policies exercised in just about every state



regarding installation/hook-up charges by the telephone and



utility companies. Some require a deposit, and some don't.





You'll find that a great number of city business license



departments are there solely for the purpose of collecting



another tax. Depending on the type of business you're asking a



license for, the building and zoning people may inspect your



premises for soundness of structure and safety. Generally, you



won't encounter any difficulties - you simply pay your fee to



operate your business in that city, and the clerk types your name



onto a city license certificate.





Relative to sales tax permits and licenses, each state's rules



and regulations very widely. The best thing to do is call your



state offices and ask for information concerning registry and



collection procedures. Many states require an advance deposit or



bond, and you'll find that some wholesalers or manufacturers will



not sell to you at wholesale prices until you can show them your



sales tax permit or number.





Should your business entail selling your products or services



across state lines, in another state, you're not required to



collect taxes except in those where you have offices or stores.





You may find also that your particular business requires the



collection of Federal Excise Taxes. For information along these



lines, check in with your local office of the Internal Revenue



Service.





Some states also require certain businesses to hold state



licenses, such as those required in many states for TV Repairmen.





These are known as "occupational permits" and are most often



required of barbers, hair stylists, real estate people and a



number of other consumer oriented businesses. If you have any



doubts, check with your state offices for a list of those



occupations that require licensing.





Any business doing business in any type of interstate commerce is



subject to federal regulations, usually through the Federal Trade



Commission. This means that any business that shops, sells or



advertises in more than one state is subject to such regulation,



and this includes even the smallest of mail order operations.





Normally, very few business people ever have and contact with the



federal regulatory agencies. The only exceptions being when



there is a question of your operating your business unethically



or illegally.





Any business that sells or distributes food in any manner almost



always requires a county health department permit. If your



business falls into this category, simply call the county health



department and invite them out to your place of business for an



inspection. The fees generally range from about $25, depending



on the size of your business when they first inspect it for



permit approval.





There are also a number of businesses that require inspection by



a fire marshall, and fire department approval. Generally, these



are those that handle flammable materials or attract large



numbers of people, such as a theater. Overall, the local fire



department has to be allowed to inspect your premises whenever



they desire to do so.





You may also run into a requirement for an air and/or water



pollution control permit. These specifically apply to any



business that burns anything, discharges anything into the sewers



or waterways, or use any gas-producing product, such as a paint



sprayer.





Without a doubt, you'll need to check on local regulations



relating to advertising display signs. Each city or township



makes its own



rules and then enforces those rules according to its own thinking



-check before you contract to have a sign made for your business.





The design and placement of your sign is very important to your



business - specifically to retail establishments - but let me



remind you that your business sign is usually the first thing a



potential customer sees and as such, it should catch his eye and



leave an impression that lasts. It would be a good idea to ride



around your town and take a look at the signs that catch your



eye, and try to determine the impression of the business that



sign leaves on you. This is a basic learning formula for



determining the design, size and placement of your business sign.





Some of the other things to consider before opening for business



- If you intend to employ one or more employees, you'll be



required to deduct Federal Income Taxes, and Social Security



payments from their checks. This will involve your filing for a



Federal Tax Number and necessitates contact with your local IRS



Office.





Most states have "unemployment taxes" which will have to be



deducted from the paychecks of any employees you hire. And there



are a number of states that have income taxes - disability



insurance - and any number of other taxes. Again, the best thing



to do is check with your local office of the IRS. And above all



else, don't forget to ask for the rules of the minimum wage law,



and comply.





When your business grows to the point of needing additional help,



don't be afraid to look for and hire the help you need. when



you're ready to hire someone, simply run an ad in your local



paper and/or register your needs with the local office of your



state's employment service. Businesses either grow or die, and



those that grow eventually need more people in order to continue



growing.





When that time comes, hire the additional people you need, and



your business will continue growing. If you don't, for whatever



reason, you'll find yourself married to your business and your



business growth stymied.





Regardless of how small your business is when you begin, never



walk in with the thought in mind that it's something to keep you



busy. Anyone with an attitude of that kind is a fool. You begin



and make a business successful in order to realize financial



freedom. Establish your business. Put it on its feet, and then



hire other people to do the work for you. And those businesses



that require an operations manager, or someone to run a phase of



the business you're too busy to handle, hire the person needed or



the business will surely suffer.





To protect the investment of your business, you need business



insurance. If you've never had any experience with business



insurance, simply look under the heading of "business insurance"



in your phone directory. Ask for bids from several different



companies or agents...Primarily, you should have a policy that



gives you general liability, fire, workmen's compensation,



business interruption, and vehicle coverage. You amy also want



coverage against possible losses related to burglary, robbery,



Life & Accident, Key Man, and Fidelity Bonds.





As the sole proprietor of a business, you won't be paid as an



employee, so there will be no income tax deducted from whatever



you



withdraw from the company's earnings. What you'll have to do is



a gain check with the IRS Office for a Tax Guide For Small



Businesses Handbook, and probably end up filing an estimated tax



return on a quarterly basis.





The minute you open your doors for business, you'll have to spend



some time engaged in the work of bookkeeping. Exactly how, and



using what forms, you keep books, should be on the



recommendations of a good tax counselor...The same holds true for



your overall business and/or payroll accounting system. Look for



an experienced CPA that knows the accounting problems to your



particular kind of business, and solicit his advise/counseling.





If your business is going to involve the possible purchase or



lease of operating equipment, again seek the help of your tax



counselor for the most advantageous method of obtaining the



needed equipment.





Basically, arranging for your suppliers to give you materials on



credit will depend upon your honesty and personal financial



statement. The best way is usually a personal visit to the



person with the power to approve or disapprove of credit at the



company where you want to set up a credit account. Show him your



financial statement, and explain your prospects for success.



Then assure him that you've always honored all of your



obligations, and that if ever there's a question or problem,



you'd like for him to call you at home. And of course, give him



your home phone number.





We won't go into the exigencies of advertising your products,



services or business here, but there is something along these



lines you should always keep in mind. The best kind of



advertising your business can receive is that you don't really



pay for - publicity.





When something unusual happens to you, your business, or your



employees - that's news, so be sure to tell the news media in



your area about it.





In closing, let me say that the most important ingredient of your



eventual success will be the soundness of the planning you did



before you started your business. Any number of bad things can



really throw your business into a tailspin, but it you've done



your homework well - really set up a detailed business plan



before starting - your losses or setbacks will be minimal.



Success takes planning, and within this report, you've got a



basic checklist...The rest is up to you...Good luck, and may your



life overflow with success in all that you undertake from this

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