Five Steps to Starting a Business

by: Abe Cherian
You may publish this article in your ezine, newsletter on your web site as long as the byline is included and the article is included in it's entirety. I also ask that you activate any html links found in the article and in the byline. Please send a courtesy link or email where you publish to: support@multiplestreammktg.com----------------------------Five Steps to Starting a BusinessBy Abe CherianCopyright ? 2005Starting a business can be a rewarding experience, but itcan also be very time consuming and difficult. Manyresources are available to assist you, but informationoverload can cause you from moving forward. Keeping it simple is often the best way of maintaining themomentum necessary to get your business started. There area series of steps to ensure success.The first step toward getting your business going isdeciding on a name, for example "New York Landscaping." Any name that you do business under other than your owngiven name is called a "fictitious" or "assumed" name, andcertain steps need to be taken in order for you to dobusiness under that fictitious or assumed name.Depending on where you live, different government agenciestrack which names are available. Look in your local phonedirectory, under government agencies to find the number, orcontact your local Secretary of State. Check to find out if the name you want has been taken. Ifit is available, you may need to file a fictitious orassumed name certificate with the state or local fictitiousname office. Some areas will also require you to publish a notice in the local paper about your new assumed name.Both state and federal law regulates the use of names and"trademarks". To avoid conflicts with other businessesregionally or nationally using your business's name, or thenames of your products, you may want to considerregistering your trademark on the federal or state level. Contact an intellectual property attorney for trademarksearch and registration services. The second step is knowing that different areas havediffering licensing and permit requirements depending onthe type of business you are going into. Most businessesthat require a license will have a local licensingauthority that can guide you through the process.Find out the licensing requirements on federal, state, andpossibly even local levels for your type of business andget licensed. Failure to be properly licensed could resultin penalties such as fines, closure of your business, andimprisonment in some cases. The third step is getting insurance. When things are goingsmoothly, insurance can seem an unduly burdensome expenseon a small business. But when things go wrong, whether ornot you have insurance can mean whether or not you and yourbusiness survive a catastrophic event like a lawsuit, fire,or natural disaster. Liability insurance protects you against liability in theevent of injury to others or damage to other personsproperty. Liability insurers most often have two duties: 1. The duty to defend you. Hire a lawyer, if you get suedand 2. the duty to indemnify you. Pay for damage or injury toothers. Both duties are extremely important, but thefirst is often overlooked by small businesses.The cost of defending a lawsuit can easily run into thetens of thousands, or even hundreds of thousands of dollarseven if you win. That's why being careful is no substitutefor liability insurance. Make sure you have adequate coverage for your vehicles andthose of your employees when used for business purposes. You can be sued and held liable for injury or damage doneby your employees if it is within the course and scope oftheir employment. Property and theft insurance may be an importantconsideration, as well as product liability or serviceliability insurance. This is often called "errors andomissions" coverage. Interview a few local insurance brokers and find one thatseems knowledgeable and that you feel comfortable with. Then ask the broker to do a risk assessment to determinewhat coverages you might need and why. Remember, thebroker makes money by selling you insurance "products" sobe sure to question the types of coverage and amounts. Ifyour broker can't explain why he or she is recommending thetypes and amounts of coverage in the risk assessment, findanother broker. The fourth step is recognizing and implimenting taxes. Soleproprietors need to be conscious of local, state andfederal taxes and registration requirements relating totheir businesses. Hiring an accountant or bookkeeper to help set up a simpleaccounting system, or using a software package is a goodplace to start. Hiring a tax professional knowledgeable about local andstate taxes relating to your business, or contacting thelocal tax authorities before you begin generating revenueor expending money can help you stay organized and be readyfor tax time. Additionally, the IRS offers assistance for entrepreneursstarting a small business in various publications. You candownload IRS Publication 334, entitled "Tax Guide for SmallBusiness", and Publication 583, entitled "TaxpayersStarting a Small Business" from the IRS web site.http://www.irs.gov The fifth step is hiring employees (if needed). Though manysmall business people start out running their own shop,success will often bring the need for expansion. When anemployee is added, you must obtain an EmployerIdentification Number from the IRS. You can download FormSS-4 from the IRS web site. In the United States, the Workers Compensation scheme doesa lot to protect employers from lawsuits by employeesinjured on the job, while also providing employees witheasier compensation for workplace injuries. Be sure totalk to your insurance broker about workers' compensationinsurance. Talk to your tax adviser, and make sure you register withyour state for payment of unemployment compensation taxes. Download IRS Form W-4 from the IRS web site to take care ofemployee withholdings. You should get copies of INS FormI-9 to verify your employees' eligibility for employment inthe United States. Finally, issues regarding wrongful termination,discrimination, workplace harassment, and other legalissues have come to the forefront in today's businessenvironment. Make sure you have an employment agreementthat spells out whether your employee is "at-will". ex: canbe let go at any time without cause, or the terms of theemployee's contract for employment.Make sure you Draft employee guidelines or an employmentmanual to make sure there are no misunderstandings aboutwhat expectations, rules and responsibilities are in place.Document any issues relating to your employees well and beproactive about handling disputes. A little planning in thebeginning can save a lot of headaches and legal expenselater on. In conclusion- hiring independent contractors is often agood way to avoid the administrative burdens of hiringemployees, but be precautious. There are many pitfalls tohiring an independent contractor who is for all intents andpurposes an employee. Talk to a lawyer and your tax advisorabout who is an employee versus a contractor.