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    21 Replies Latest reply on Nov 12, 2008 10:56 PM by autismNCSP

    Small Business Development Guide

    dszyszka Newbie
      Hello everyone,

      When I was started my business last year I made a little guide to explain to one of my friends who was also starting a business. I think it covers most of the important steps and bases. Feel free to contribute and expand upon my ideas.



      Small Business & Home Office
      Development Guide


      Whether you are selling a product or
      service there are certain steps that the small business owner must
      not fail to address within the first few months of operation. These
      are key for any type of business and it is your responsibility to
      make sure these important steps are completed.


      Below is our recommended order for
      completion of these very important steps


      1. Business Plan \\ \\ I know this is one item that most people will not want to write. You might have your idea and think that its enough just to know what your goal is. But as studies have shown it is vitally important to write your ideas down into a step by step plan that you can clearly see the paths to your goals and what needs to be accomplished in order for those goals to be realized. \\ \\ This does not have to be in the form a book - like the typical business plan. Your business plan can take the shape of a white board over your PC, a step by step flow chart, or any other method that will help to remind you every morning what your goals are and the paths to those goals. However if you are considering getting business loans, lines of credit, or venture capital - you will most likely be asked for a formal business plan. These big banks what to know every painful detail. You can find more information about small business start up and business plans here:
      2. The Legal Structure \\ \\ Now that you have a plan in hand you are ready to get legal. This is perhaps one of the most important steps and you have to choose your legal structure very carefully to ensure you are protected from any incidentals. The basic legal structures you have to choose from are: Sole Proprietorship, Limited Liability Corporation, General Partnership, C Corporation, and S Corporation. \\ \\ Sole Proprietorship: The one structure that does NOT protect you from liability. If you are not aware of your choices you might choose to become a Sole Proprietorship enjoying the informal structure and simplified tax reporting. BUT under no circumstances could I or would I recommend that anyone form their legal structure as a Sole Proprietorship since you are personally liable for ALL business debts. For this fact you should cross it off your list and keep looking. If the unfortunate where to happen or some other mishap you would not want your credit or house taken away, right? Take my advice and keep your business separate from your personal life. \\ \\ General Partnership: Fairly inexpensive to form and is basically an agreement between two are more people to conduct business. They do not pay taxes, but instead profit and loss is distributed equally among the members and must be reported so on their personal returns. But here again you are liable for business debts. But not all of them the debt or misfortune is shared among its members. For certain situations this might be a good business structure but keep in mind you have shared liability and because of that not my choice of legal structure. \\ \\ C Corporation (Corp., Inc., or Ltd.): Not typically for the small business owner this legal structure is best suited to large companies in excess of 100 employees. This is the most complex form of organization and should not be attempted without an attorney. C-Corp is also the most expensive to setup and can range to the many of thousands of dollars for formation. With this type of structure ownership is in the form of Shareholders and the percent of shares you hold determine your authority and cash flow. There is also double taxation: profits are taxed at the corporate level and then again when distributed to shareholders. But you are now personally protected against all liability of the corporation unless you pierce the corporate veil by: commingling funds, not issuing stock, not holding annual meetings, not recording the minutes of meetings, or not electing directors. \\ \\ Sub Chapter S Corporation (Corp., Inc., or Ltd.): This type of legal structure is however very common for small business owners. The basic structure is identical to the C corp and you must take the same precautions and be careful not to pierce the corporate veil. The most significant difference is that S Corps do not suffer from double taxation like C Corps, if qualified for S status with the IRS; instead they are taxed much like partnerships where the income and loss flows directly to the shareholders. But keep in mind you MUST follow general corporate formalities discussed under the C Corp or you risk piercing the corporate veil. This business structure is ideal when there are many people sharing in the business. \\ \\ Limited Liability Company (LLC): The best of both worlds, really. The LLC combines liability protection with the tax advantages of a partnership or sole proprietorship. The LLC has a choice to pass profits and losses to the members of the firm or they can elect to be treated like a corporation. This legal structure also does not suffer from all the corporate formalities of C & S Corporations and the LLC does not issue stock nor does it have shareholders only members of the LLC which act together as a partnership. For most small business the LLC structure makes the most sense and is vastly simplified and streamlined compared to other structures and it protects you from any incidentals that might ruin your personal equity. \\ \\ \\ Getting Started: Once you have decided on your legal structure you will naturally have to legally create the company. There really are two ways you can go about doing this. One is your local attorney which will charge you between $1600 to $5000 to do all the paper work for you or you can get with the times and start your LLC online with an online firm such as Legal Zoom. They charge between $129 - $359 for LLC paper work and their work is just as good as any local attorney since both file the same paper work and send it to the same place it truly is your choice. If price is no object then by all means call your attorney, if you need to save some cash I recommend Legal Zoom.
      3. Toll Free Number & Efax: Even if your business is localized to one area code you should still make the small investment and purchase a toll free number for your business. Typically you are only charge 2.9 to 10 cents per minute for incoming calls and you can direct this toll free number to any phone - so if you move your office or place of business one day all your past customers will still have you most current number. The main advantages for getting a toll free number are: Increased Response rates, Credibility, Repeat business, Customer Satisfaction, and Convenience. There really is not reason why you would not want to sign up for a toll free number but I would not recommend your local phone company. There are many online companies that can provide you with the number you want and give you the appearance of a large company by adding multiple voice extensions and holding music while your phone rings. You can even create different extensions that ring completely different phone numbers - so you could appear to be a huge company but you have consultants or family helping you at different locations and no one could ever find out. It is simply amazing what technology has brought to the table - those packages typically range from $9.95 to $59.00 a month and often include free minutes and a efax number - which will deliver faxes right to your email account and you can send faxes via email as well - its very nifty.
      4. Open Bank Account: Once you have your address in hand, EIN number, and business phone number you are now ready to apply for a business checking account. Remember under no condition should you use personal card or personal bank accounts to operate your business as this will pierce the corporate veil and you can become personally liable. You absolutely need business checking before you can conduct any business.
      5. Accept Credit Cards: I am assuming you want your business to grow and become profitable, correct? I have seen the best results from businesses that accept all the payment options they can and this means accepting credit cards. This is not as hard as you may think. But do keep in mind there are all kinds of sleazy companies online that claim to give you the abilities to process credit cards and they do but with VERY high fees and high rates. Typically anyone you decide to process credit cards will charge a percent of the order as their fee and those range from about 2% to 5%, the later being some of the online firms. Interestingly enough I have found the best processing to be with Bank of America, you can even accept credit cards online with them and if you have a business checking account everything is nicely connected.
      6. Corporate/Business Credit Card: This is another very important step you should take at about the same time you open your bank account. By far and without exception I recommend the American Express Business card lines. The service they provide far exceeds any other corporate card I have tried and unlike other card companies Amex will step up to the plate to help you and your business. These cards are perfect for ordering supplies and other items that you need to run your business and work very much like a loan when you need it. Many companies will use their Amex Business cards to order inventory and pay off the card as inventory is sold thus leaving the profit in the business checking account. The man advantage to do so is the advanced fraud protection and arbitration services in case there is a problem with your order and your distributor is not listening to you also if you payoff the card every month you do not have interest payments.
      7. Website & Company email \\ \\ Your own company or corporate identity is VERY important. Whether you are selling a product or service nationally or just locally you need to start branding your company or corporation so that people will start to recognize it and know where to return. Also you will want possible clients to find you online. If you or someone else creates a website for you there is no guarantee that it can be found by possible customers. A big mistake that many small business owners make is that they treat their website like a business card. This is simply not the case any longer. Google reports that 80% of Americans will be using Google sometime in the next 30 days to search for a product or service and if your website is not created correctly or optimized correctly there is no possible way any of that traffic could make it to your site. \\ \\ I urge you for the sake of your business to take your online business just as seriously as your store front or any other necessary business implement. Your website needs to be configured correctly or you will simply not receive any traffic and no sales. Also if you are not using your website address as your email domain expect your customers not to take you seriously. Which as a client would you feel more comfortable with or To me the choice is obvious that the second example is what you should be using. If you need any help you can contact us directly
      8. DUN Number \\ \\ For those of you not familiar with with a DUNs number is it stands for Dunn and Bradstreet is among the leading providers of business information. Often called just D&B, it is perhaps best known for its (Dun & Bradstreet Universal Numbering System) identifiers assigned to over 100 million global companies. Among its major divisions are Risk Management Solutions, Sales and Marketing Solutions, Supply Management Solutions, and E-Business Solutions. \\ \\ This is how you establish business credit. It is very much like your personal credit and it reports the health of your business. They will try to up sell you naturally but just the DUN number alone is free and they will get that off to you within 30 days. You will use this number when applying for loans or if you have a supplier they will often request your DUNs number. Some of them have even refused to do business with us until we got our number. Again I have to stress that this is something most small business owners miss and it is not something you can recover from years down the road when you do need a loan - there would have been no recorded business credit! Go to their website now and get the free DUNs number and use it where ever you can to build a positive history for the future of your company.
      9. _Professional Business Cards and Stationary _ \\ \\ You didn't think you where done yet did you? The next step in the puzzle should be printing business stationary and business cards. I very quick way to implement this is by using the designs in your website and carry that over to the stationary and business cards. Everything should flow together very nicely. Remember you want to appear as professional as possible so make sure to keep everything uniform. The easiest and cheapest way to get this done is by using a company called iPrint. We had been using them since they started business and we recommend them without any reservation. But if you like your local printer by all means use them but remember to keep it professional and uniform.
      10. Marketing and Promotion \\ \\ Now that you have your business setup done correctly all you need now are customers right? This another vitally important aspects that every small business owner will face. What happens if you have no customers or if your current client base slowly disappears? You need to take proactive measures to make sure you are always in fresh supply of leads or new customers. We are Google Certified Internet marketers so if you have any questions feel free to post them.
      11. _BBB - The Better Business Bearu _ \\ \\ The BBB is well respected in the United States for only letting quality businesses in. A member of the BBB will carry some of that prestige since upon approval you will be authorized to display the BBB logo on your site, place of business, and stationary if you so wish. Customers trust the BBB and any company approved by them. But keep in mind that you need to follow their rules for customer complaints and many other fine points. But don't worry too much about that at the moment. Right now what you should do is follow this link to find your local BBB they all have different rules and different regulations so you will want to apply directly to the BBB that is in your area. But be ready - they will interview you at your place of business. And yes that can be a home office, but make sure it looks as if you do all you business there.
      12. Other industry affiliations \\ \\ Every type of business at this point has industry affiliations that you can apply for and get endorsements. It is also very important to be a part of your industry and you might want to find news sites or magazines about your industry so that you can stay current and informed in a changing environment. As a business owner in any given industry it is your job alone to make sure that you and your company are up to date.
      13. Join Local Chambers of Commerce \\ \\ One mistake the business owner often makes is the failure to join local Chambers of Commerce. This vitally important if you market business to business since everyone attending the month end mixer will be a local business owner or manager. This is your chance to pass out all those business cards you printed and make local connections. Remember it can take some time to get recognized by the local business community. You will have to work slowly to build trust and respect and to do this I recommend that you get yourself in front of them as often as possible.
        • Re: Small Business Development Guide
          CorpCons08 Ranger
          Hmm...I will have to take some time to read through this.
          I will get back to you with my feedback.

          • Re: Small Business Development Guide
            NatOnline Tracker

            I disagree with 11 and 13, no need to waste money on that.

            11) BBB called me many times to be member, I was in business for less than a year and I don't paid hundred dollars to get a nice review on my business or get a link from them, because the most important reviews come from customers, not an organisation, with fees !


            12) Chamber of Commerce doesn't worth the hundred dollars fees, breakfast fees, and time wasted as they do nothing for you beside put your company name on their list, and send a RDV breakfast copy 2 times per month.

            These organisations are old, save the money and advertise your company where are the reel business.
              • Re: Small Business Development Guide
                dszyszka Newbie
                I think its still important if you are starting a new company no one as ever heard of before and you dont have any customers. Every little bit of trust helps - and yes there are fees but clients will trust you better esp online if you have that seal.

                If you already have a good establish business then perhaps you dont really have a need for it.
              • Re: Small Business Development Guide
                LUCKIEST Guide
                You did all that by yourself. I ama SCORE Counselor and we hand out info to people in business.
                I will make copies of guide (with your permission) and hand them out with other literature
                including all the booklets that Bank Of America distributes to SCORE.
                Thanks LUCKIEST
                • Re: Small Business Development Guide
                  Lighthouse24 Ranger

                  Thanks for your post. I'm sure this was very helpful to your friend in the context of his/her business. I don't think it will provide other potential new business owners with much help. For them, this "guide" would be like a map drawn in the dirt with a stick. As long as the person is going where you think they should, it might be fine. It won't work if they're headed somewhere else, change destinations, or get lost along the way.

                  Each section of your blog mixes one or two widely known facts with generalized personal opinion that seems to be based on very limited experience and perspective. For example, saying that a Sole Proprietorship is one of the legal structures a business owner may chose is a fact -- but saying that under no circumstances should anyone form their legal structure as a Sole Proprietorship is an opinion (not to mention just plain horrible advice for the majority of new small business owners).

                  Each of the twelve steps is like that -- an isolated fact, presented out of context, surrounded by highly debatable opinion. I could elaborate, but based on your response to NatOnline's post (which is right on target for most new businesses -- not all, but most), I don't sense that you're really interested in correcting, improving, or expanding anything.
                  • Re: Small Business Development Guide
                    CorpCons08 Ranger

                    I have to agree with a valid point you made. This guide does not allow for the small business owner who may be going in a different direction, and more importantly from recent postings on this forum, it does not help the business owner who has just acquired a business.


                    Although I can see valid points in your guide, there are many opinionated pointers. I do not agree with the DUNS identifier being a necessity for startup. No matter what, even if you have built up business credit, I can guarantee that under 2yrs in business, any reputable finacer is going to rely on personal financials. The BBB is also an optional pointer. I do see where you are going with it, but again, not a necessity for building a business.

                    I liked Lighthouse's opinion on the Sole Proprietorship that he wrote about. There are plenty of successful small businesses that are Sole Proprietorships. Do you understand why the Sole Proprietorship exists? If it was an entity that "nobody should be" it wouldn't exist.

                    Keep working on it. I think you have a good idea, it just needs to be developed further.

                      • Re: Small Business Development Guide
                        dszyszka Newbie
                        I think some constructive feedback is a
                        good thing. Not sure why a lot of people seem negative its not a
                        definitive work. Just some clean simple steps that I took to build my
                        business to a 5mill a year advertising company. I am sure they would
                        not work for everyone and I dont claim to know everything. But I
                        would love some positive feedback so we can get something that would
                        help more people.
                          • Re: Small Business Development Guide
                            CorpCons08 Ranger

                            Why does everybody select my name to respond to when they are saying the comments have been negative? lol
                            As my last line said, I believe you have a good idea and we can make something work out of it.
                            What the first step would be, lets go through and remove opinion from fact.
                            If you feel the opinions are important, what I would suggest would be, write out all the facts and then on a separate page you can speak on opinion.
                            I feel some things you might want to include are networking suggestions. Look you're on one!
                            They really do help small business least I like to think so when falling asleep at night.
                            Keep asking questions, lets work on this together, I love throwing out ideas.

                        • Re: Small Business Development Guide
                          LUCKIEST Guide
                          In your first posting you mentioned "there are fees".
                          Please tell us about the fees.
                          Thanks, LUCKIEST
                          • Re: Small Business Development Guide
                            moogrdotcom Adventurer
                            Dont' fear the c-corp though. You can open a "simple" private c-corp for the same price as any other corp in most states. This seems to make them appear dangerous & scary :)
                            • Re: Small Business Development Guide
                              heavenly91321 Wayfarer
                              You are ABSOLUTELY right about the Chamber of Commerce. Especially in today's world, people will turn to their local government for assistance in choosing the companies they do business with. I have been an entrepreneur for over 20 years, and EVERY city I have lived in I joined the CofC immediately and made PHENOMENAL contacts and my business grew because of those contacts. Good for you!
                                • Re: Small Business Development Guide
                                  typistave Newbie
                                  Your small business development guide is great, and there are a few things that I agree with you on. Yet, it seems that most of your steps are backed by your own experience, and that seems to be that you had ample resources to start your business. Of course, congrats to you, but in writing a Small Business Development Guide, I think you should be able to target more than just those with the money and resources to spend on your steps. Furthermore, and I think it was mentioned earlier, your steps may not speak to the small business builders and owners who aren't following your business model.

                                  Joined associations such as your local Chamber of Commerce and the Better Business Bureau are good ideas in thoery, but the benefits can only outweigh the costs to a certain extent, which is further limited by the type of business that you want to start and the way that you are going about doing it. For me and many small business owners that I know and work with, joining these antiquated associations would be a waste of money that they could be using somewhere else.

                                  Also, following all of these "clean steps" that you talk about, such as business plans, and incorporation, can be useful in certain situations. However, many small businesses are looking to start up right away, and while I've written a few business plans myself, I have found that they only serve as a way to procrastinate from actually starting the business.

                                  Maybe your friend has the resources and ability to squander money and time on the things that you mention here, but it seems that your business guide is only targeting those who have a million dollars to start off with, which is rarely ever the case. I think that you should approach your guide in a way that would speak to a wider audience.
                                • Re: Small Business Development Guide
                                  autismNCSP Newbie
                                  this was so helpful. thank you so much for your thoughts and guidance.