Opening a Business

From credit card payments to tax policies, first-time business owners have a lot to learn.

Starting your own business can be an exciting idea. After all, America is a land of entrepreneurs.

But the financial challenges are daunting, whether your enterprise is going to be launched with other employees or you’re going to go it alone.

The first thing you’ll need is capital. Even if you’re not buying a building to house your business, you’ll need money to cover rent, payroll, inventory, machinery, tools and other start-up costs. Most credit unions and banks offer a line of business loans. You might also check out what the federal Small Business Administration has available.

Next, set up separate bank accounts for your business. Mixing personal and business funds can land you in a lot of financial and legal trouble. Don’t do it. You can also arrange with your bank or credit union to process your business’s credit card transactions. Turning Visa and MasterCard payments into real cash in a hurry is vital for your cashflow. Not all financial institutions offer the same terms, so sweat the details.

The truth is, most new business owners aren’t instant financial experts. Unless you are, it’s best to hire the services of a certified public accountant. One important thing he or she will do is help you with your taxes. The last thing you need is to devote scarce resources to paying penalties if, for example, you’re considered to be self-employed and didn’t file quarterly estimated taxes. You’ll also need to contact an insurance agent. Just as homeowners’ policies protect your personal assets, you’ll need protection for your business assets. If you have employees, make sure to arrange for workers’ compensation insurance and liability coverage.

Opening a business means interacting with a bevy of bureaucrats. Contact your Secretary of State’s office to find out what forms to file. You may require a vendor's license and you'll also need to register to collect sales tax. The IRS can tell you how to register to withhold your employees’ federal income taxes. Other agencies that you may want to bone up on include the state unemployment benefits commission and the federal Occupational Health & Safety Administration. Better yet, go find an attorney who can help you navigate the minefields of employment law.

After you open, work hard to control overhead. You probably don’t need fancy office space or indulging in expense account meals right away. Extra money should go to promoting growth, not buying amenities. You should also establish financial goals that go beyond, “I want to get rich.” Set weekly or monthly revenue objectives and monitor them closely. Make adjustments if you’re not meeting those numbers – or if you’re beating them by a big margin.

Finally, heed the adage, “Time is money.” As you build your daily schedule, remember that every moment you spend doing something unrelated to your core business functions is time wasted. Let’s get even more specific: In the beginning, focus your time and efforts on new customer acquisition.

Your business is your passion, and pleasing your customers is the first step to sustained success.

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Factors to Consider: Starting or Buying a Business

Before you start your own business or buy an existing business, you should do some initial planning. You may have already decided what type of business you want - your own restaurant, retail outlet, service, or manufacturing plant. You need to choose a suitable location - can you work from home, or do you need a separate facility?

Planning for Succession of a Business Interest

One of the important decisions a business owner must face is when and how to step out of the business - in other words, business succession planning. Do you expect to retire from your business? Do you have a plan in place? What would happen to your business if you were to die today? Do you have children you hope to bring into the business?

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