The Secrets of Starting Business Successfully

Monday, July 27, 2009
Starting Business Secrets will help you to start your own business successfully.

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 findthat 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.

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 moment forward.

50 Surefire Business Card Tips

Business cards are one of the most powerful and inexpensive marketing tools you can use. Here are 50 surefire tips to make the most out of your business cards:

* Your business card must communicate more than just your contact information. Make sure that your card includes a tag line that explains what you or your company do.
* Order them in large numbers. By ordering 1000 your cost per card will be significantly lower than if you ordered 500.
* Even if you can produce your business cards at home using an inkjet printer, have your business cards professionally made by a printing company. Your business card will be the first impression your prospects receive of your business, so let them convey the best possible one.
* Avoid using standard clip art as your business logo. A logo brings credibility and brand awareness, so before you invest in business cards have a logo professionally made for your business. Nowadays,there are online companies that can produce a professional logo for as little as $25, so there is no excuse for not having one made.
* Put up a website and use the URL in your business cards. If you don't have a website, people will notice the absence of a web address in your business card and, depending on the business you are in, it may make you lose credibility.
* Keep all the information in your business card current. If you changed address or phone number, don't scratch the old number and write down the new one by hand; get new business cards.
* Keep your business card simple. Don't use too many fonts or try to cram too much information in it. Try to use a pleasant layout and make sure that your main message (your tagline or your unique selling proposition) doesn't get lost.
* If you live in the US, limit your business card size to 3.5" x 2". Anything bigger will not fit in standard card holders and your card may end up in the trash. Business cards in Europe tend to be larger, but so are the wallets and card holders.
* Make sure that your business card reflects your image. If you are an artist or a graphic designer, it is OK to use trendy colors and fonts. If you are an investment banker, a sober layout and colors such as blue or gray work better.
* Your business card is an integral part of your brand or corporate identity strategy. It should follow the same graphics standards as the rest of your communications material (stationary, brochures, letterheads, etc.).
* Find a way to make your business cards stand out. I've seen business cards with one of its corners cut in an angle, or with an interesting texture, all of which makes your business card stand out of the crowd. The best one I've seen is from an interior designer, who used a hologram to show a room before and after a redesign.
* Make your business card easy to read: use high contrast between the background and the type. Light background with dark type works better.
* After your logo, your name should be the largest piece of information on your card.
* Make sure that all the information on your card is printed in a large enough typeface to be easily readable.
* Run your business card copy through a spell checker and double-check your contact information.
* Keep your business cards with you at all times. Keep a stack in your car, in your house, in your office, and in your wallet.
* Leave your business cards in billboards at supermarkets, schools, stores, libraries, etc.
* When giving away your card, give two or three at a time, so that your contacts can in turn distribute them to other people. This will not only help you distribute them faster, but will generate a beneficial "endorsing effect".
* Include a business card with all your correspondence. People may throw away the letter, but will usually keep the business card.
* Make your business card go the extra mile: use the back of the card to print more information: special offers, checklists, schedules, etc.
* Throw in a business card in every product you ship.
* Send a business card with any gift you send, instead of just a card with your name.
* Scan your card and use it as an attachment to emails.
* Use your business cards as name tags. Get a transparent plastic cover with a pin, and attach it to your lapel. Wearing it on your right side tends to make it more noticeable.
* Use your business card as a name tag on your briefcase. Make sure that your company logo and tagline are visible. This way, your business card will turn into a "conversation piece" during plane rides, which may help you meet interesting people and good business contacts.
* Use your business card as an ad: many publications offer "business card size" classified ads. If you design your business card properly, it can double up as an ad in those publications.
* Don't give your business card too quickly. It may be perceived as pushy. Try to establish a conversation with your prospect first. For example, ask them what do they do. That will usually prompt them to give you their card. That is the perfect moment to give them yours.
* Don't try to give your card in situations where many people are giving them to your prospect. Wait for a moment when you can capture your prospect's attention span.
* Another tactic you can try when your prospect is overwhelmed and can't pay you enough attention is to send your card by mail. Pretend you ran out of business cards and ask for theirs. Then, mail them your card and take the opportunity to drop a follow up note.
* If you have a mobile phone number or a direct phone number that is not listed in your business card, write it at the back of your card before handing it out, and tell your prospect that you are giving them your direct number. This will make your card more important, and less likely to be lost or thrown out.
* Another way of increasing the chances that your prospect will keep your card is by printing valuable information on the back, for example important phone numbers (local police, hospitals, etc), a calendar, or a football schedule.
* Offer to hand out cards of complementary (non-competitive) business people in exchange for them distributing yours. An example of non-competitive businesses is real estate brokers and mortgage brokers.
* If somebody gives you their business card, you should give them yours in return.
* Always give your business card face up.
* Take a cue from Far East business people, who hand out business cards with both hands. It helps give the impression that your business card is something very important.
* If you conduct business internationally, use the back of your card to print a translated version of your business card in your customers' language. Even if they have no problem reading English, it will be a classy touch and they will appreciate it.
* If you sell different product brands and want to put their logos on your business card, print them in only one color. Using each logo's brand colors could make your business card look chaotic and busy.
* Create a business card in magnet form. Magnets are widely used, to hold important papers on the refrigerator door at home and on file cabinets at work. They are always visible and always get read.
* When receiving somebody else's business card, don't put it away immediately. Instead, keep it in your hand for a while you talk to your prospect, or place it neatly over the table, and try to develop a conversation based on the information on the card.
* Use the back of the cards you receive to write down important facts about the persons who handed them to you. It will help you enormously when you follow up with them.
* If you are in a profession where relationship selling is important, it may be a good idea to include your picture in your business card (i.e. real estate brokers).
* Even if your business is a sole proprietorship, you can still use "account manager" as your title instead of "owner" or "president". If you do sales (and we all do) "account manager" is a perfectly appropriate title, and it will give the impression that you work for a larger company.
* Use logos of organizations that you or your business belong to in your business cards. They are an easy way to provide instant credibility to your business. For example, if you operate a repair shop you can display the logo of the National Institute for Automotive Service Excellence (ASE) or the Triple A (AAA). (Check with them first about the terms of use).
* If you participate in affiliate programs online, you can still use business cards to promote your affiliate links. Use the name of the affiliate company as the company name, use 'partner' or 'associate' as your title, and the URL of the directory or web page where you have placed your affiliate links as your web address. Just because affiliate programs are online doesn't mean that you can't use off-line marketing methods to promote them.
* If you need to give cards to different kinds of prospects (for example if you are a student looking for work), make business cards with just your name and contact information, and attach custom made self-adhesive labels at the back with information of interest to each specific prospect.
* Include an information email address (for example: info@yourdomain.com) that is set in autoresponder mode, that automatically triggers an email message with full information about your product, service or company. This will increase the effectiveness of your business card since you will give your prospect much more information that you can fit in a card.
* Take good care of your business cards. Keep them clean and crisp in a cardholder. Don't give away cards that are bent or damaged.
* Try to get a cardholder with two pockets. That way, you can use one for your business cards and the other one for the business cards you receive.
* Keep all the business cards you receive neatly organized in a rolodex. It will save you time and will provide you with a database of contacts with whom to build positive business relationships.
* Collect all the business cards you can find, even if you don't need them. Together, they will act as an "idea file" that will provide you with valuable tips that you can use to design your business cards.


About The Author

Mario Sanchez publishes The Internet Digest (http://www.theinternetdigest.net) an online collection of tips and resources on Internet Marketing and Web Design. You can also visit his Business Card Tips page at: http://www.accordmarketing.com/businesscards/.

21 Steps To Home Business Success

Fifty million home-based businesses will be in operation by 1997, according to Link Resource's National Work-at Home Survey. All around the country, people who want more control over their lives are starting home businesses

In New Orleans, Rick Hart's home based cajun Cargo ships seafood nation wide. In Palatine, Illinois, Stephaine Heavey works from home designing and selling original patterns for fabric dolls. And in Dallas, Lisa McElya published the Dallas Party & Event Planners Guidebook from the entire first floor of her two-story home.

These three people are living the new American dream of owning a business, but avoiding the high overhead and start-up costs of a commercial location. If the idea of working from home is appealing, but you don't know where to begin, here is a step-by-step guide.


STEP #1 DECIDE WHAT PART OF THE HOUSE TO USE

Select an area away from family activity. The perfect space is a separate room (or perhaps the garage), but any area will do, if it can hold all the business supplies and equipment, and also provide enough work space for desks, tables, or counters.

STEP #2 DETERMINE HOW MUCH TIME YOU CAN SPEND ON THE BUSINESS

Many people start a home business on a part-time basis while raising children or working outside the home. Others start full-time when family and finances allow. However you begin, figure out how may hours per week you can devote to the business Make a weekly chart of your activities, examine it, and determine where the business fits. Don't assume you have time and find out later you don't.

STEP #3 DECIDE ON THE TYPE OF BUSINESS

Make a list of things you like to do, your work and volunteer experience, and items you own that can be used in a business. Look over this line-up, and using ideas from it, list possible businesses to start. Eliminate any business that isn't appealing or doesn't fill a need people have.

For ideas on different types of businesses, consult the end of this article. Other ideas can be found in the source material listed at the end of this article.

STEP #4 CHOOSE A LEGAL FORM

The three basic legal forms are sole proprietorship, partnership, and corporation. The most common is the sole proprietorship. As its name implies, a sole proprietorship is owned by one individual. It is the oldest form of business, the easiest to start, and the least complicated to dissolve. Here are some of the advantages of this business form:

1. You own all the profits
2. Your business is easy and cheap to organize. You don't need any government approval, although you may be required to carry a city, state or county license. Your only other obligation is to notify the Internal revenue Service (IRS) for the purposes of sales tax.
3. You're the boss
4. You enjoy certain tax savings. You must pay regular individual taxes on your income, property, and payroll, but these are not levied as special taxes, as with a corporation. You will also have to pay sales tax which you have received from your customers.
5. Greater personal incentive and satisfaction. Since you have your investment to lose if your business is not successful, you should be more willing to put time, thought, and energy into the business. And when your business is successful, you enjoy maximum sense of accomplishment since you know its success was dependent upon your decisions about your management ability alone.

For more information about this and other forms of business, send for the U.S. Small Business Administration (SBA) Publication MP25. Selecting the Legal Structure for Your BUsiness (50 cents). It outlines the advantages and disadvantages of each legal type of structure. If after reading it you are still uncertain what form of the business should take, consult an attorney.

STEP #5 DETERMINE WHERE THE MONEY WILL COME FROM

There are three ways to finance start-up costs: use your own money, obtain a loan, or find investors. If possible, it is better to start small, use your savings, and not worry about repaying a debt. also keep in mind that since you are a home-based, chances of qualifying for a loan or finding investors are slim until the success of your idea is proven.

STEP #6 GATHER INFORMATION

Spend a few weeks researching home-based businesses. A library or bookstore can provide numerous books on business basics, and on the specific type of business that interest you. Homemade Money by Barbara Brabee (see sources) is an excellent book to start with.

If you are considering a computer business, get in touch with the association of Electronics; Cottagers, P.O. Box 1738, Davis, CA 95617-1738. To keep informed of what is happening in home business world, contact National Home Business report, P.O. Box 2137, Naperville, IL 60566, for subscription information; and Mothers Home Business Network, P.O. Box 423, East Meadow, NY 11554 (send SASE for free information).

STEP #7 CHECK ON ZONING RESTRICTIONS

Find out how your property is zoned, the call City Hall and ask what regulations apply to home businesses in that zone. Also, if you rent or live in a condominium, check the lease or homeowner's association rules to be certain a home business is allowed.

Generally, if you do not annoy your neighbors with excess noise, odors, and traffic, you will not be deterred from running a business at home. The neighbors may not even be aware of the business, but it is necessary to know exactly what you can and can't do before you start. This is important should any problems or questions arise later.

STEP #8 PICK A BUSINESS NAME AND REGISTER IT
If the business you choose is different form your name, file an assumed (or fictitious) name certificate with the county. You are notified if another business already has that name, so you can select a new one.

Do this before investing in expensive stationery and brochures. It costs only a few dollars to file, and it protects the business name from being used by someone else in the county.

STEP #9 WRITE A BUSINESS PLAN

A good business plan clarifies your ideas and establishes a plan of action. A good business plan should include a description of what you are selling, your background and qualifications, who the prospective customers are and where they can be found, what is needed to build the business, how you plan to promote, and how much money is need for start-up costs.

SBA Publication #M925, The Business Plan for Home-Based Business ($1) is helpful.

STEP #10 GET AN IDENTIFYING NUMBER

If you are the sole proprietor of the business and have no employees, you may either use your Social Security number or an Employee Identification Number (EIN) as the business number on official forms. If you have employees, or the business is set up as a partnership or corporation, you must obtain an EIN. To do this, complete IRS Form SS-4 (Application for Employer Identification Number) and file it with the nearest IRS Center.

STEP #11 OBTAIN A SALES TAX PERMIT

If the product or service you sell is taxable, you need a state sales tax permit. Call the local tax agency, explain the type of business you have and what you sell, and ask if you need to collect sales tax. If you do, they will send you the necessary information and forms to complete. You also use this tax number when your purchase items for resale.

STEP #12 OBTAIN LICENSES & PERMITS

It's very important not to overlook any necessary license or permit. For example, some cities and counties require a general business license, and most have special laws regarding the preparation and sale of food.

Call City Hall to find out what is need for your particular business. In addition, Chamber of Commerce provide information on city, county and state licenses and permits.

STEP #13 SELECT BUSINESS CARDS, STATIONERY, BROCHURES

Spend time on the color, design and paper for these items. They make a definite impression-good or bad- on the people who receive them. If you are not certain what is most suitable and effective, consult a graphics designer or a creative printer whose work you like.

STEP #14 OPEN A BUSINESS CHECKING ACCOUNT

Call several banks to find out what services they offer, and what minimum balance, if any, must be maintained to avoid paying a service charge. Also ask about credit card if you plan to offer this convenience to your customers. Bank fees can be significant, so shop around for the best deal.

If your personal checking account is with a credit union, see if it can also provide a separate business account. when you open your account, you may need to show the assumed name certificate and business license.

Finally, investigate obtaining a credit card in the business's name. If this is not possible, set aside a personal credit card to use for business expenses.

STEP #15 SET UP RECORD-KEEPING SYSTEMS

Put together a simple and effective bookkeeping system with an 8 1/2 x 11" three-ring binder, columnar pad sheets and twelve pocket dividers from the office supply store. For each month, set up columnar sheets for income and expenses. Use a pocket divider for each month's receipts, bank statement, deposit tickets, and canceled checks.

In addition, an automobile log for business mileage, and filing system for correspondence, invoices, supplier catalogs, client records, etc. are two other useful tools.

For more information on record-keeping, see IRS publication #583, Information for Business taxpayers.

STEP #16 CHECK IRS REQUIREMENTS

If you comply with basic IRS guidelines, you can deduct a percentage of normal household expenses (mortgage, interest, taxes, insurance, utilities, repairs, etc.) as a business expense. see the box accompanying this article and, for more detailed information, IRS publication #587, Business Use of the Home.

Also become familiar with these IRS forms: Schedule SE (compensation of Social Security Self-Employment Tax) and Schedule 1040 ES (estimated Tax for Individuals). Depending on circumstances, you may have to file them.

STEP #17 OUTFIT THE BUSINESS

Make a list of everything needed to start the business, but before you buy anything, look around the house for things you already own that are usable.

When you are ready to start purchasing, check the classified ads and garage sales. Both are good, inexpensive sources for office furniture, typewriters, computers, answering machines, etc. But only what is absolutely necessary for start-up, and wait until the business is off the ground to get the extras.

STEP #18 DECIDE ON TELEPHONE REQUIREMENTS

Call the telephone company to find out the cost of a business phone in your area. If you cannot afford a separate business line, investigate the telephone company's regulations on using your personal phone in a business. It may be possible to do this if you follow certain guidelines. Keep a record of long distance business calls as they are a deductible expense. Finally, consider the benefits of an answering machine to catch calls when you are out.

STEP #19 CHECK OUT THE POST OFFICE & UPS

Using a post office box as the business address down plays the fact you are home-based. It also prevents customers from dropping in at all hours.

While looking into box rental, ask for information on the various postal rates, particularly bulk rate, if you plan to do large or specialized mailings. If you mail many packages, check out United Parcel Service (UPS), as it is less expensive than the Post Office.

STEP #20 PURCHASE THE NECESSARY INSURANCE

Check with your homeowners insurance agent about a rider for your existing policy or the need for a separate business policy. Also make sure you have adequate personal and product liability coverage. Shop around, as each company has different rules regarding home businesses

To save money on medical insurance, join an association and participate in their group plan. One such body is The National association for the Self-Employed: they can be reached at 800-527-5504.

STEP #21 ORGANIZE THE HOUSE & YOURSELF

To have more time for business, organize and simplify household routines. Start by holding a garage sale to get rid of unnecessary possessions. Next, have a family conference and divide household duties, making sure each person does his or her part. The, set up a planning notebook to keep track of appointments, things to do, calls to make, errands to run, shopping, etc. Finally, set up a work schedule so you won't get sidetracked by TV, neighbor's visits, snacking, and telephone calls.

Creating and operating a home business is a wonderful and rewarding challenge. The satisfaction is not only in the money earned, but in doing what makes you happy.

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