Five Steps To Starting A Business

Starting a business can be a rewarding experience, but it ncan also be very time consuming and difficult. Many nresources are available to assist you, but information noverload can cause you from moving forward. nnKeeping it simple is often the best way of maintaining the nmomentum necessary to get your business started. There are na series of steps to ensure success. nnThe first step toward getting your business going is ndeciding on a name, for example "New York Landscaping." nAny name that you do business under other than your own ngiven name is called a "fictitious" or "assumed" name, and ncertain steps need to be taken in order for you to do nbusiness under that fictitious or assumed name. nnDepending on where you live, different government agencies ntrack which names are available. Look in your local phone ndirectory, under government agencies to find the number, or ncontact your local Secretary of State. nnCheck to find out if the name you want has been taken. If nit is available, you may need to file a fictitious or nassumed name certificate with the state or local fictitious nname office. Some areas will also require you to publish nna notice in the local paper about your new assumed name. nBoth state and federal law regulates the use of names and n"trademarks". To avoid conflicts with other businesses nregionally or nationally using your business's name, or the nnames of your products, you may want to consider nregistering your trademark on the federal or state level. nContact an intellectual property attorney for trademark nsearch and registration services. nnThe second step is knowing that different areas have ndiffering licensing and permit requirements depending on nthe type of business you are going into. Most businesses nthat require a license will have a local licensing nauthority that can guide you through the process. nnFind out the licensing requirements on federal, state, and npossibly even local levels for your type of business and nget licensed. Failure to be properly licensed could result nin penalties such as fines, closure of your business, and nimprisonment in some cases. nnThe third step is getting insurance. When things are going nsmoothly, insurance can seem an unduly burdensome expense non a small business. But when things go wrong, whether or nnot you have insurance can mean whether or not you and your nbusiness survive a catastrophic event like a lawsuit, fire, nor natural disaster. nnLiability insurance protects you against liability in the nevent of injury to others or damage to other persons nproperty. Liability insurers most often have two duties: nnn1. The duty to defend you. Hire a lawyer, if you get sued nand nn2. the duty to indemnify you. Pay for damage or injury to nothers. Both duties are extremely important, but the nfirst is often overlooked by small businesses. nnnThe cost of defending a lawsuit can easily run into the ntens of thousands, or even hundreds of thousands of dollars neven if you win. That's why being careful is no substitute nfor liability insurance. nnMake sure you have adequate coverage for your vehicles and nthose of your employees when used for business purposes. nYou can be sued and held liable for injury or damage done nby your employees if it is within the course and scope of ntheir employment. nnProperty and theft insurance may be an important nconsideration, as well as product liability or service nliability insurance. This is often called "errors and nomissions" coverage. nnInterview a few local insurance brokers and find one that nseems knowledgeable and that you feel comfortable with. nThen ask the broker to do a risk assessment to determine nwhat coverage’s you might need and why. Remember, the nbroker makes money by selling you insurance "products" so nbe sure to question the types of coverage and amounts. If nyour broker can't explain why he or she is recommending the ntypes and amounts of coverage in the risk assessment, find nanother broker. nnThe fourth step is recognizing and implementing taxes. Sole nproprietors need to be conscious of local, state and nfederal taxes and registration requirements relating to ntheir businesses. nnHiring an accountant or bookkeeper to help set up a simple naccounting system, or using a software package is a good nplace to start. nnHiring a tax professional knowledgeable about local and nstate taxes relating to your business, or contacting the nlocal tax authorities before you begin generating revenue nor expending money can help you stay organized and be ready nfor tax time. nnAdditionally, the IRS offers assistance for entrepreneurs nstarting a small business in various publications. You can ndownload IRS Publication 334, entitled "Tax Guide for Small nBusiness", and Publication 583, entitled "Taxpayers nStarting a Small Business" from the IRS web site. nnThe fifth step is hiring employees (if needed). Though many nsmall business people start out running their own shop, nsuccess will often bring the need for expansion. When an nemployee is added, you must obtain an Employer nIdentification Number from the IRS. You can download Form nSS-4 from the IRS web site. nnIn the United States, the Workers Compensation scheme does na lot to protect employers from lawsuits by employees ninjured on the job, while also providing employees with neasier compensation for workplace injuries. Be sure to ntalk to your insurance broker about workers' compensation ninsurance. nnTalk to your tax adviser, and make sure you register with nyour state for payment of unemployment compensation taxes. nnDownload IRS Form W-4 from the IRS web site to take care of nemployee withholdings. You should get copies of INS Form nI-9 to verify your employees' eligibility for employment in nthe United States. nnFinally, issues regarding wrongful termination, ndiscrimination, workplace harassment, and other legal nissues have come to the forefront in today's business nenvironment. Make sure you have an employment agreement nthat spells out whether your employee is "at-will". ex: can nbe let go at any time without cause, or the terms of the nemployee's contract for employment. nnMake sure you Draft employee guidelines or an employment nmanual to make sure there are no misunderstandings about nwhat expectations, rules and responsibilities are in place. nDocument any issues relating to your employees well and be nproactive about handling disputes. A little planning in the nbeginning can save a lot of headaches and legal expense nlater on. nnIn conclusion- hiring independent contractors is often a ngood way to avoid the administrative burdens of hiring nemployees, but be precautious. There are many pitfalls to nhiring an independent contractor who is for all intents and npurposes an employee. Talk to a lawyer and your tax advisor nabout who is an employee versus a contractor.n