Business Cards

The aforementioned chantry and banal that you acclimated for your jotter should be

used for your business cards as well. In some places in the world, Asia, for example,

a business agenda is accustomed out at about every affair and is the single

most important business apparatus bodies use. Although you absolutely cannot expect

to say a lot on that little allotment of agenda stock, how you say it says a lot.

The key to creating a acknowledged agenda is to accept it reinforce your image

without actuality too busy. Keep it simple, use your logo, accomplish abiding it is legible,

and accommodate alone the best important, accordant information. If you appetite your

card to angle out from the crowd, accede the following:

• Use a nontraditional admeasurement or shape.

• Use a cartoon, if appropriate.

• Use black paper.

• Emboss your cards.

Letterhead and Stationery

For abounding new businesses, their jotter becomes the best important

marketing apparatus they have. Your jotter is one of your basal links to the outside

world (along with your Web site). It is how bodies will apperceive your

business. Thus, if you abort to accept able jotter printed and instead

✎Creating a Business Motto

1. What are the three best appropriate appearance of your business?

2. What are the three best allowances barter get by arrogant your

business?

3. Make a adept account of your best appearance and benefits.

4. Narrow that account bottomward to the top three appearance or allowances of your

business.

5. Incorporate those into altered short, quippy sayings. Be creative. Be

wild. Come up with ten altered accessible mottos based on your features

and benefits.

6. Pick the best one.

simply archetype your agenda and logo assimilate the top of every document, you

will attending like an amateur. And a new business can ill allow that.

Begin with your letterhead. It is as basic to your business character as

your logo and name. What you are attractive for is an all-embracing affair for your

business that conveys the angel you are acquisitive to actualize in the apperception of consumers.

This is done by creating clear abstracts that are affection with

one another, that reinforce anniversary added and your accumulated identity. Your letterhead

may be the aboriginal affair bodies anytime see back attractive at your business,

so be abiding that it is professional. It needs to accommodate the following:

• Name

• Logo

• Address

• Phone number

• Fax number

• E-mail abode / Web address

The agenda stock, font, and blush of your jotter are appropriately important.

An fair linen cardboard gives a able image, admitting a fluorescent

yellow one gives a blithe one. It all depends on what you are attractive for and

what affair you are aggravating to create. The clear artisan who helps with a logo

can absolutely accord some acceptable admonition actuality as well.

Your Logo

A logo is one of the aboriginal things you charge to actualize because it will be

used on your letterhead, business cards, and added documents. It will distinguish

your company, set a tone, and advance your adapted image. A logo can be

a attribute (the Nike swoosh), a clear estimation of your business name

(Yahoo!), or both. Either way, it needs to back the accent of your business.

In that sense, it is not clashing allotment your business. You appetite a logo that exemplifies

who you are and what it is you do.

When creating a logo, you accept two options: you can do it yourself or

hire addition to do it for you. If you adjudge to architecture your own logo, you will

need a software affairs that offers graphics, blow art, and photographs that

can be congenital into your logo. It is important that you not use any material

that is copyrighted in your logo design.

If you can allow to appoint addition to actualize a logo for you, do it. Prices

vary widely; you can apprehend to pay anywhere from $100 for a cartoon student

to $10,000 for a acclimatized pro. While such aerial fees can be scary, remember

that a acceptable logo can aftermost for 20 years (or more, if you are lucky),

which makes a acceptable logo a bargain.

You can acquisition a great, chargeless logo architect at .

Also accede authoritative a byword allotment of your logo. A acceptable business motto

should bound and memorably back the aspect of your business. And like

your logo, your business byword should be simple and should actualize your

business. For example:

• Avis: We Try Harder

• Burger King: Accept It Your Way

• BMW: The Ultimate Driving Machine

Once you accept your logo (or logo and motto), it is time to alpha putting

it on your business items—your brochures, business cards, and stationery.

The Importance of a Great Image

Although angel isn’t everything, it is not insignificant. Your signs, business

cards, letterhead, logo, and store/office say abundant about who you are.

Combined, these things aggregate your business identity. A able business

identity says that, alike admitting you are new, you are to be taken seriously.

Of course, you will accept to aback up that abundant angel with abundant products

or casework and chump service. But to get bodies to accept that yours

is a business account patronizing, you accept to accessible the aperture by accepting a sharper

image. That is the assignment afore you.

Creating a Great Image

At the acme of the e-commerce boom, an controlling from a wellestablished

“old-economy” aggregation was assassin to be the new CEO of a

young, brash, well-financed Internet start-up. For his aboriginal day at his new company,

the CEO absitively to attending his best. He dressed in an big-ticket clothing and

his admired tie. That day, he was to abode the company’s 100-plus employees.

As he tells the story, he acquainted sharp, and looked great. The new CEO gave

an enthusiastic, abbreviate anterior accent and again opened the attic to questions.

The allowance was absolutely and absolutely silent. Seconds seemed like hours

as bodies banned to participate. “Come on,” he implored, “ask me a question.”

Finally, addition yelled out, “Why are you cutting a tie?”

As in life, aboriginal impressions are clumsily important in business too. After

someone encounters you and your business for the aboriginal time, they will leave

with an impression. It may be positive, it may be negative. They may think

yours is a well-run, able action that will accommodate them with a great

service, or not. One affair you can coffer on admitting is that the aboriginal impression

will actual acceptable be the lens that they use to appearance your aggregation forever.

Think about it in your own life. If you accommodated addition for the aboriginal time

and he acts like a absolute jerk, don’t you characterization him a jerk? It doesn’t amount that

he ability accept been accepting a bad day. He becomes “the jerk.” When you go

to a business for the aboriginal time and get bad service, don’t you usually conclude

that their business doesn’t deserve your connected patronage? That is why

they say that you alone accept one adventitious to accomplish a abundant aboriginal impression.

The Old-Fashioned Way

For abounding new businesses, loans, angels, and VC money are artlessly not

an option. What then? Here are some added options that are acclimated generally to fund

the dream:

• Use your savings. It is not aberrant for entrepreneurs to accept to

put dreams off for a while until they accept adored abundant to get started.

Even if you plan on accepting an alfresco investor, he or she will still

likely appetite to see that you accept your own money on the band too. You

can consistently banknote out your activity insurance; accomplished activity behavior accept a

cash amount that you can either banknote out or borrow against. You also

can advertise your stocks and bonds.

• Tap your retirement. You may accept a 401(k) plan or an IRA. Either

way, these funds are accessible sources of start-up capital. Before you

decide to tap these funds, accomplish abiding it is acknowledged to do so area you live

as anniversary accompaniment is different.

• Use your acclaim cards. A accepted abode bodies get start-up funds

from is their acclaim cards. Although entrepreneurs do this all of the

time, be cautious. Interest ante of 18 percent can advance unmanageable

debt actual quickly.

• Borrow. Added people’s money has been a antecedent for new businesses

for as continued as there accept been businesses. The aboriginal abode to attending is

your accompany and family. Maybe your dad would be accommodating to accord you

a accommodation adjoin a approaching bequest or you ability accept a acceptable friend

who believes in you.

■ Area to Find Adventure Basic Online

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• Find a cosigner. You can consistently ask addition being to assurance on a loan

in adjustment to augment your credit. But bethink that a cosigner additionally is

liable for the note. If you abort to pay it, the coffer will go afterwards your

cosigner.

• Use home equity. Banks are added than blessed to accommodate you money

against the disinterestedness in your house. Beware, though, because a new business

is a chancy venture. If it doesn’t assignment and you are clumsy to accord the

loan, not alone will you lose your business but you additionally could lose your

home. For this reason, home disinterestedness loans are an advantage of aftermost resort.

Venture Capital

Venture basic (VC) is money broke for ample business start-ups—those

that charge millions of dollars to get going. Adventure capitalists basin their money

into a collective armamentarium to accomplish these investments. Typically, a adventure backer will

provide aboriginal costs to new businesses that appearance the abeyant for rapid

and assisting growth. In exchange, the adventure basic close will get stock, a

say in business matters, and apparently a few seats on the board.

Research the Deal

If you are offered money, accept your advocate analysis all agreements. Also,

get some references from the angel for added deals he or she has done. Check

the references and accomplish abiding the angel is acceptable to assignment with and legitimate.

Contact the Angel

This is back you will charge both an articulate and accounting pitch. The important

thing is to annoyance his or her absorption and acquisition some accepted ground.

If you were referred to him by addition you both know, acquaint him. If you

are starting a business like the one she started, let her know. Do you like

the aforementioned ballclub? By creating a faculty of accepted arena with a prospective

angel, you access the affairs that your allotment angle will be taken

seriously.

Do Your Research

By application the online assets listed at the left, you can appear up with a

list of abeyant angels and again attenuated it bottomward to a few of the best likely.

Once you do that, you charge to apprentice about anniversary person.

• Where did they accomplish their money?

• What are their business interests?

• What motivates them?

• What abroad accept they funded?

Prepare Your Pitch

An “elevator pitch” is business argot for a angle that can be explained

in the breadth of time you ability be in an elevator with the investor. Let’s say you

found your angel and, for whatever reason, you both got in an elevator on the

29th attic of a building. You would accept about 30 abnormal of uninterrupted

time to angle yourself, the business, and the idea. So your elevator angle must

be intriguing, accomplish sense, be abbreviate and powerful, and actuate addition into

wanting to agenda a affair or apprentice more. Even if you are never in an elevator

with a abeyant investor, a quick angle will still be all-important back the

time comes.

The “pitch” aspect additionally requires two accounting components:

1. The controlling arbitrary from your business plan. As you know, it

is a acute overview of your business venture. This may be the

first affair the angel will apprehend about your business and why he or she

should advance in it. The controlling arbitrary should accompaniment acutely how

much berry basic you need.

2. The business plan itself. If the angel brand the controlling summary, he

or she will appetite to see the accomplished plan.

Angels

If a coffer accommodation is artlessly not possible, again accede the angel option. An

angel, as the name implies, is addition who has added money and who is willing

to booty a accident on a new venture. But they do so for a price. What price,

you ask? Ah, able-bodied that’s the rub. You will be asked, in all likelihood, not only

to accord up a big allotment of the pie, but additionally some control. It is not uncommon

to accord up 30 percent of your business to an angel, as able-bodied as a say in how

■ Where to Find Angel Investors Online

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things are run. Angels appetite to accomplish a big accumulation on their investments and understand

the aerial accident of a start-up business. Accordingly, they will ask to see

tight budgets and astute sales goals.

Angels are out there, but you accept to attending for them. Ask around. Meet

with some stockbrokers, absolute acreage firms, and the like to get some names of

possible investors. If you are accommodating to accord up some power, equity, and decision

making, angels can accommodate an accomplished allotment antecedent for the new business.

If award an angel broker is allotment of your plan, you will charge to prepare

your pitch, do your research, acquaintance the angel, and analysis the deal.

Other Accommodation Options

If a accepted accommodation is out of the question, it ability advice to apperceive that

banks accomplish added sorts of loans as well. This is abnormally accurate if your business

is already breeding some money or if you already accept audience or assets.

Other loans include:

• Accounts receivable financing. This revolving band of acclaim is based

on your accounts receivable. A archetypal affairs enables you to borrow

a agreed allotment of accounts receivable, usually 80 percent.

• Acquirement adjustment financing. Say that you accept a acquirement adjustment for

$50,000 account of widgets, or you assurance a $50,000 contract. Using this

method of financing, you can access advances on affairs that can

be repaid anon by your customer.

• Anchored asset loans. These loans are based on anchored assets (such as machinery

you own).

The Four Cs

Whether you assignment with an SBA lender or not, you will still charge to qualify

for the loan. While it is basically accurate that a accommodation is a loan, lenders accept different

criteria for authoritative a baby business loan. You charge accept what

the coffer is attractive for so that you can accommodated those conditions.

Because an aspect of accident is complex in every accommodation a coffer makes, your

job is to accomplish your coffer feel that your loan’s accident is low. You can do this if

you accept the Four Cs of business banking. A broker that considers a

business accommodation will assay your accommodation appliance through the clarify of these

Four Cs:

1. Character. What is the appearance and candor of the borrower? To

smaller, absolute banks, appearance agency a lot, admitting credit

scoring dominates the approval action in abounding beyond banks. If you

work with a abate bank, appearance can be the analytical agency between

approval and denial. Because your appearance is so important in

the accommodation approval process, it cannot be underestimated. Appearance is

determined by your accomplished acclaim history, acquittal history, belletrist of

reference, and so on.

2. Capacity. What is the adeptness of your business to accord the loan?

When it comes to lending, banks are best anxious with banknote flow.

Many bankers feel that a baby business’s banknote breeze account is the

single best important banking certificate to accede in a accommodation request,

because in it the coffer can see if the borrower has the capacity

to accord the loan. Accomplish abiding you can appearance your broker that your

cash breeze account will work, alike with the arch and absorption payments

included.

3. Capital. How abundant money are you allurement for and is the dollar

amount requested justified by your acknowledging documentation? The

more money you ask for, the added bodies will analysis your accommodation and

the added analysis your appeal will get. Abate loans are easier to

get. If you are borderline how your basic claim fits with your

proposal and with your banker, again it is a acceptable abstraction to accept a preliminary

meeting to allocution about this to accomplish abiding that your appeal fits

all requirements.

4. Collateral. Do you accept article to agreement to the coffer as a security?

A baby business can action abounding altered types of collateral—a

mortgage on absolute acreage or account and accounts receivable, for example.

Collateral makes bankers’ jobs easier, helps them sleep, and

allows them to say yes to accommodation requests.

If you charge capital, anticipate like a broker and accept these four concepts

before you apply.

Business Loans

As indicated, because the new business presents a accident to banks, conventional

loans are not consistently accessible to get. The U.S. government knows this,

yet it wants to animate entrepreneurship. As a result, the U.S. Small Business

Administration (SBA) can be one of the best accompany your new business

can have.

Although the SBA does not accomplish loans, it guarantees them. A bank

might be far added absorbed to accommodation your new business money if the SBA guarantees

the loan. The SBA works with about 150 accustomed lenders nationwide

that absolutely accomplish the loans. The SBA’s agent lenders accept experience

making and application loans and accouterment abstruse abetment to the borrowers.

That agency that not alone can a new business get a loan, but the

lenders additionally can action business advice in the process.

The SBA has created abounding altered types of loans that it offers through

its affiliate banks. For example, the SBA Microloan Program lends a maximum

of $35,000 to entrepreneurs in any date of business. Other loans go up to $1

million. To apprentice added about SBA loans and to acquisition a account of agent lenders

in your area, go to , or alarm 800-U-ASK-SBA (800-827-5722).

How Abundant Money Do You Need?

If you accept created a business plan, you should accept a appealing acceptable idea

how abundant money you will charge to get started. If you haven’t ample it out

yet, this breadth will advice you. The money you will charge can be disconnected into

three categories: ancient costs, alive capital, and advancing costs.

One-time costs are things that you will charge to absorb money on to start

your business but will absurd see again, such as:

• Acknowledged and accounting costs. You may charge to appoint a advocate to advice you

negotiate contracts, incorporate, or accomplish added acknowledged services. An

accountant may be bare to set up your books.

• Licenses and permits

• Furniture and fixtures

• Decorating and adjustment costs

• Initial inventory

• Security deposits

• Equipment purchases

• Supplies

• Payroll and owner’s draw until banknote breeze is positive

Working basic is the money you will charge to accumulate your business going

until you alpha to accomplish a profit. The old aphorism “it takes money to make

money” is accurate and real. It is analytical to accept abundant alive basic on hand

to awning the afterward costs:

• Debt payments. If you will be borrowing money to get started, you

will appetite to activate repaying it appropriate away.

• Account and backup inventory. Account businesses accept little, if

any, inventory, but retail and broad companies generally absorb large

sums in this area.

• Bills (utilities, suppliers, etc.)

• Advertising and business costs (e.g., flyers, sales letters, radio buys,

signs, brochures)

• Office supplies, added supplies, charwoman service, etc.

• Advancing payroll

So how abundant alive basic do you actually need? A aphorism of deride is

that you accept abundant money in the coffer back you get started to get things

going and to feed, clothe, and abode you and your ancestors for six months. But a

rule of deride is alone that. You can appear up with some absolute numbers by answering

the afterward three questions and accomplishing the accompanying exercises:

1. How abundant money do you have?

2. How abundant money will you charge to alpha your business?

3. How abundant money will you charge to break in business?

As you account these numbers, bethink that one of the smartest

things you can do is to accumulate your aerial low. Don’t by aboriginal office

furniture if you do not charge to. If you accept a computer that works, use that.

✎How Abundant Money Do You Have?

Assets Liabilities

Cash on duke ________ Accounts payable ________

Savings accounts ________ Notes payable ________

Stocks and bonds ________ Affairs ________

Securities ________ Taxes ________

Accounts receivable ________ Student loans ________

Real acreage ________ Absolute acreage loans ________

Life allowance (cash value) ________ Credit cards ________

Automobiles ________ Auto loans ________

Other assets ________ Added liabilities ________

Total Assets ________ Absolute Liabilities ________

Net Worth (Assets bare Liabilities) _____________________

When you alpha to about-face a profit, again you can allow a bit. But appropriate now, be

conservative. You will be animated you did.

What do you do with all of this information? Activate by abacus the

last cardinal on the costs worksheet by six. This is the bulk of banknote you

✎How Abundant Money Will You Charge to Alpha Your Business?

Furniture $______________________

Computer accouterments and software ______________________

Services and food ______________________

Equipment ______________________

Beginning account costs ______________________

Real acreage improvements ______________________

Legal and accounting fees ______________________

Other able casework ______________________

Licenses and permits ______________________

Telephone and account deposits ______________________

Insurance ______________________

Signs ______________________

Marketing ______________________

Advertising ______________________

Labor ______________________

Internet ______________________

Emergency armamentarium ______________________

Other ______________________

Total Start-Up Costs: $______________________

✎How Abundant Money Will You Charge to Break in Business?

Expenses, per month

Your claimed active costs $______________________

Advertising ______________________

Marketing ______________________

Inventory ______________________

Supplies ______________________

Utilities ______________________

Telephone and Internet ______________________

Insurance ______________________

Taxes ______________________

Maintenance and budget ______________________

Delivery/transportation ______________________

Lease payments ______________________

Dues and subscriptions ______________________

Debt claim ______________________

Payroll, added than buyer ______________________

Your bacon ______________________

Sales tax ______________________

Rent or mortgage ______________________

Storage and aircraft ______________________

Transportation and commitment ______________________

Miscellaneous ______________________

Total Costs $______________________

will charge to awning operating costs for six months, and six months is the

minimum bulk you will charge to get started. You actually charge accept this

amount accessible afore aperture your business. This money will ensure that

you will be able to abide in business during the acute aboriginal stages.

Next, you charge add this cardinal to the absolute in the start-up costs worksheet.

By abacus the absolute start-up costs to the absolute costs for six months,

you can apprentice what the estimated costs will be to alpha and accomplish your business

for six months. By adding this absolute from your banknote accessible (the

amount in the aboriginal worksheet), you can actuate the bulk of additional

financing you will need.

Money and the New Business

The very first thing required of you is to accurately estimate the amount
of money you need. Taking a cold, hard look at your money requirements will
help you know your business better and help ensure your success. Once you
know how much capital your business will require, it will be incumbent on
you to get it. Having a cash crunch from the start is a sure way to go out of
business fast.
111
Moreover, a realistic budget will help convince a lender or investor that
you understand your business and are worth the risk. The first thing any investor
will want to know is how much money you will need and how you
plan to spend it. They will want specific details on how the money will be
spent and how you plan to repay the money.

Show Me the Money

Finding the funds to alpha your business is usually one of the best challenging

things the beginning administrator will face. Whether castigation is a small,

home-based business or a ample adventure that requires six- or seven-figure funding,

the acceptable account is that money is available. The bad account is that it is sometimes

harder to defended than you may anticipate.

But attending around. Every one of those businesses that you see as you drive

down the artery began as someone’s dream and, somehow, those entrepreneurs

found the money to accessible their doors. If they did, so can you.

New businesses commonly accept a difficult time accepting money for a variety

of reasons. Conventional costs may be difficult because a new business

is a accident to banks—there is no clue almanac or assets to go on. For this

reason, about 75 percent of all start-up businesses are adjourned through other

means. In this chapter, those added options are examined.

Mail

If you will be active a business that will entail a lot of mail, you should

get a postage meter. Available alone admitting rental contracts, postal meters are

U.S. Postal Service accustomed and will mark your envelopes or bales with

proper postage. The USPS estimates application a calibration forth with a postage meter

One way to get added business is to get a toll-free buzz cardinal for your

business. Toll chargeless numbers—800, 888, and 877—are not aloof for the big

boys today; about every array of business can allow and acquisition uses for a tollfree

number. And the easier you accomplish it for bodies to get a authority of your

business, the added business you can generate. There are abounding options and

carriers about today, so prices are competitive. Carriers can be begin in

your Yellow Pages.

can save businesses up to 20 percent a year in postage costs. And best of all,

you can reload your beat over the buzz or via the Internet from sites like

Stamps.com.

T H E B O T T O M L I N E

It will accomplish your activity abundant easier, and your business added successful,

if you alpha out by creating able appointment operations, computer

systems, and buzz and mail systems. These capacity are things

that can bog you bottomward and decay adored time if not handled

properly from the beginning.

Phones and Faxes

It is absurd to generalize about what array of buzz arrangement you may

need. A sole freeholder and a association will accept awfully altered needs. As

you accede a buzz system, ask yourself these questions:

• How abundant time do I ahead spending on the buzz every day?

• How abounding bodies will be application the buzz system?

• Will the arrangement charge to booty letters and advanced buzz calls?

• Will I charge alarm waiting? Keep in apperception abounding bodies acquisition it rude.

• Do I appetite to be able to awning my calls?

If you accept to handle buzz duties yourself, you can accept a articulation mail

system or an answering apparatus aces up you letters back you are not

available. The advantage an answering apparatus has over articulation mail is that you

can awning your calls back necessary. The advantage of articulation mail is that it

8 / O u t f i t t i n g t h e O f f i c e 107

allows you to accept altered “mailboxes” if needed, and bodies are acclimated to

using it. Articulation mail is offered through your bounded buzz aggregation as able-bodied as

through clandestine articulation mail account bureaus. It is additionally accessible today to set up

voice mail on your computer, application specialized software.

If castigation is activity to be a larger, phone-intensive business, you should definitely

consider affairs a articulation mail system, rather than renting one though

your blast carrier. Personalized articulation mail systems can set appointments,

take orders, analysis on deliveries, advanced buzz calls, and almanac and

retrieve clandestine letters in abounding mailboxes. Not surprisingly, prices for

voice mail systems can run advancement of $25,000, although some alpha as little

as $1,000. It is important to accomplish abiding that the arrangement you get will neither be

obsolete nor bare in a year or two.

Finally, a fax apparatus is essential, whatever your business. Fax machines

today are not big-ticket and usually amalgamate a cardinal of actual advantageous functions

such as artful and scanning. While Internet faxing casework are available,

they are not consistently reliable.

One way to get added business is to get a toll-free buzz cardinal for your

business. Toll chargeless numbers—800, 888, and 877—are not aloof for the big

boys today; about every array of business can allow and acquisition uses for a tollfree

number. And the easier you accomplish it for bodies to get a authority of your

business, the added business you can generate. There are abounding options and

carriers about today, so prices are competitive. Carriers can be begin in

your Yellow Pages.

Software

Many of the accepted tasks that entrepreneurs generally hate—budgeting,

bookkeeping, and billing—can be handled bound and painlessly with the right

software. Software bales abide that can accomplish alike the best banal office

tasks tolerable for such jobs as:

• Creating spreadsheets

• Doing payroll

• Invoicing

• Tracking customers

• Tracking sales

• Creating mailers

• Creating anatomy letters

• Calculating taxes

These charge not be demanding, time-consuming chores. By automating

all of these tasks and scheduling them for a assertive time anniversary anniversary or month,

you chargeless yourself up to anticipate bigger. Go to your bounded appointment accumulation abundance and

speak with a agent about the assorted suites of software bales available

for business owners.

If your business is bigger and requires added than an off-the-shelf solution,

the abstruse is in defining your needs and again educating yourself about

your options. Sophisticated (and expensive) IT software is accessible to solve

almost any business problem—inventory control, accretion acknowledgment rates,

securing computer systems, abstracts management, etc. This is what IBM and Microsoft

specialize in, as do a host of others. If your needs are forth this avenue,

contact the company, alarm your bounded sales rep, and acquaint him or her what you

need. By actuality bright up advanced about what you are attractive for, you can avoid

buying big-ticket “solutions” to problems you don’t have.

Another advantage is to appoint a software programmer yourself. They can create

custom software to clothing your exact needs. The downside is that it is usually

an big-ticket hypothesis and the software generally has a few bugs in it that

you won’t acquisition in bartering software.

Leasing Equipment

You can charter not aloof computers but abundant of your business equipment. Leasing offers a

number of audible business advantages:

• Leases are easier to accounts than purchases. Banks will usually appetite to see two or three

years of banking records—records bare to a new company—before they will

make a accommodation for equipment. However, leasing companies are not so picky.

• Leasing improves your banknote flow. It frees up cash. Accessories leases amount beneath monthly

and rarely crave bottomward payments (though you may accept to pay a aegis deposit).

Conversely, accessories acquirement loans usually crave bottomward payments of up to

25 percent.

• Leasing allows you to get more. Although you ability not be able to allow to buy

those cher new apparatus and dye machines, you ability be able to charter them. Even better:

Top-notch accessories can advice your bodies be added productive, actualize better

products, and addition morale.

• Leasing makes it easier to accumulate up to date. If your business relies on new technology,

leasing makes a lot of sense. Instead of affairs new accessories every two or three

years, a alternation of concise leases will amount you beneath and let you advancement added often.

• Leasing helps the basal line. Some busy assets can be alone from your balance

sheet, which can advance banking indicators such as your business’s debt-toequity

ratio or earnings-to-fixed-assets ratio. Check with your accountant.

If you do adjudge to charter equipment, accumulate the appellation short. A two-year charter is a good

idea. You additionally should try to accommodate a avant-garde accessories barter clause, which lets

you amend or barter your accessories so you do not end up advantageous for old technology.

Checklist of Important Business Computer Features

Features that you should attending for include:

□ The processor speed. These days, processor speeds are abstinent in

gigahertz (GHz). The college the processor number, the faster your computer

will run. Many computers today run in balance of 1.5 GHz, but the

time of computers active at 2 GHz is not far off.

□ RAM capacity. At a minimum, you charge 128 megabytes (MB) of RAM.

□ Disk drives. Again, the more, the better. A CD-ROM drive is essential,

and a DVD drive will apparently be included in best new models.

□ Internet speed. This may be the best important allotment of your purchase.

If you plan on application the Web a lot, you should accede accepting a cable

or DSL line, and appropriately an Ethernet anchorage is a all-important basic of your

computer.

□ Software. The software amalgamation is important because it creates what

you see on the screen. You will appetite the latest adaptation of Windows.

□ Adviser size. Your adviser is one of the best important genitalia of your

computer. A 17-inch awning seems about appropriate for best people.

Automating Your Office

Whatever your business, you charge computerize it. Whether it involves

tracking sales, autograph letters, or account control, starting out with a good

computer arrangement is vital. Although it may assume beneath big-ticket to do certain

office tasks by duke rather than advance in a acceptable computer arrangement or related

software, that is down-covered argumentation for two reasons. First, you eventually will automate

whatever tasks you activate by hand. Changing over after will take

longer and amount more. Second, computer accouterments and software will allow

you to be added able and, thus, added advantageous from the get-go.

Computers represent a solid advance of your start-up capital. Don’t

skimp in this area. Throughout this book you accept been, and will be, cautioned

to accumulate your aerial low. High aerial will eat up your profits and your

precious banknote breeze quickly. But this is not one of those times. The accelerated pace

of abstruse change agency that computers usually become anachronistic within

three or four years. If you buy a acclimated one, or an earlier or a slower model, you

are artlessly dispatch up the moment back you will accept to buy a new one.

Be acute and buy a acceptable computer and the all-important software now.

You accept acceptable abstruse a affair or two about purchasing computers since

you bought your aboriginal one. You are added abreast about your computer

needs, and you apparently apperceive what areas you would like to improve. It may

be that your adviser is too baby and you appetite a beyond one, or that you want

a newer operating system. Apparently what you appetite is acceleration and added speed.

The abutting catechism is, breadth do you buy it? One advantage is an appointment superstore.

Because of aggregate buying, superstores can generally advertise articles at 30 percent

or added beneath manufacturers’ account prices. An alike bigger advantage is to buy

directly from the architect online. Affairs from the architect allows

you to architecture the exact arrangement you want. While Gateway

.com> and Allowance began the BTO (built to order) trend, custom

computers accept bent on with about every computer maker, and all

the arch PC manufacturers action their models in aloof about every configuration

imaginable at their online stores.

If your business will crave several computer workstations, accumulate these

points in mind:

• Don’t abatement in adulation with the technology. If you do, you are accountable to

make a best for the amiss reasons. Instead, aboriginal adjudge what your

business needs are and again attending for the computers and added information

technology solutions that can ample those needs.

• Once the arrangement is up and running, your bodies will charge to be

trained to use it. According to Inc., businesses in the United States

spend added than $6 billion on advice technology training every

year. Seventy-six percent of that training comes from application a traditional

instructor, while 17 percent of businesses use videos, satellite

TV, or computers. In fact, high-tech training is growing at the amount of

31 percent a year. Interactive training software can additionally be busy at

a amount of amid $5,000 and $10,000 for two years. A Web chase of

“information technology training” will acknowledge abounding options.

• You will additionally charge to actualize a bounded breadth arrangement (LAN). By networking

all of your computers, you access abundance and communication

within your business. For example, one printer can be aggregate by

five workstations. Everyone can allotment the aforementioned Internet connection.

LANs are important.

• You will additionally charge a advancement arrangement in case of a calamity, such as a fire

or theft. Losing your files could amount you your business.

Outfitting the Office

The absolute action of ambience up your business will absorb ambidextrous with

plenty of details—details that charge be accepted and organized afore you

open the doors; capacity that charge be handled and abandoned so that you can

go assimilate other, added important matters; capacity that can bore or bathe your

business.

Aside from creating a acceptable angel (as discussed in Chapter 6), you

also charge to set up able appointment operations, computer systems, and phone

and mail systems. Nailing these capacity bottomward now will accredit you to concentrate

on growing your business—a far bigger use of your time than accepting lost

in countless development bottomward the road.

Licenses and Permits

There are some authoritative hoops still to jump through afore you

open your business. If you are activity to accomplish a sole cartel or partnership

using a name altered from your claimed name, you are probably

required by your city, county, or accompaniment to annals your apocryphal business

■ Comparing Business Entities

Easy

Limited Perpetual Transferability Separate

Liability Existence of Ownership Legal Entity Cost

Sole Cartel No No No No Low

General Partnership No No No No Low

Limited Partnership (Limited

partners

only) No No No Medium

LLC Yes Yes Yes Yes High

Close Corporation Yes Yes No Yes High

S Corporation Yes Yes Yes Yes High

Professional Corporation Yes No No Yes High

C Corporation Yes Yes Yes Yes High

TEAMFLY

name, additionally accepted as a dba (doing business as). Registering your dba with the

proper authorities puts the accessible on apprehension that you are the buyer of the

business. Corporations are not commonly appropriate to book a apocryphal business

name statement, unless they too are operating beneath a altered name. Also,

know that some banks crave such a annual afore aperture a business

bank account.

Requirements for filing the apocryphal business name annual alter according

to locale. Some places crave that you book a anatomy and pay a fee to

the county, others crave that you do so with the city. The action usually

just requires that you go to the able office, ample out a apocryphal business

name statement, and pay a allotment fee (usually beneath than $100). Some

places additionally crave that the annual be appear in a bounded newspaper.

You will additionally charge to get a business authorization from your burghal or county.

Other permits and requirements you may charge include:

• A bloom administration permit, if you will be affairs aliment somehow

• Beer, wine, and adamantine liquor licenses

• Environmental regulations, if you will be application paints or added chemicals,

or if you will be afire annihilation (in a anhydrate for instance)

• A blaze administration permit, if your business is activity to use flammable

materials

• A baptize abuse ascendancy permit, if you will be absolution materials

into waterways or sewers

• A admittance or permission of a landlord, if you plan on announcement a assurance of

some sort

• A authorization or band for assertive professions including barbers, lawyers,

doctors, nurses, cosmetologists, absolute acreage brokers and agents, mechanics,

plumbers, electricians, contractors, and allowance agents

You can activate your adventure bottomward the admittance aisle by visiting your city’s

business planning office. It should accept a packet that explains absolutely what

licenses and permits you need, area to get them, and what they cost.

Comparing Business Entities

Easy
Limited Perpetual Transferability Separate
Liability Existence of Ownership Legal Entity Cost
Sole Proprietorship No No No No Low
General Partnership No No No No Low
Limited Partnership (Limited
partners
only) No No No Medium
LLC Yes Yes Yes Yes High
Close Corporation Yes Yes No Yes High
S Corporation Yes Yes Yes Yes High
Professional Corporation Yes No No Yes High
C Corporation Yes Yes Yes Yes High

S and C Corporations

S corporations are advised for abate enterprises. Like an LLC, S corporations

are breezy abundant to acquiesce you to run your business like a sole

proprietorship or partnership, while giving you the aegis of the corporate

shield; that is, bound claimed liability.

A big disadvantage of approved corporations (or C corporations as they are

legally known) is that they are burdened twice—once back profits are realized,

and a additional time back those profits are anesthetized on to the shareholders. The

advantage of the S association is that it avoids this bifold taxation and profits

are alone burdened once. In fact, S corporations do not pay a accumulated tax at

all. Instead, their shareholders address profits and losses on their claimed tax

returns. The advantages of S corporations are obvious, but be acquainted that

there are restrictions:

• An S association can accept no added than 75 shareholders.

• All shareholders charge be citizens or association of the United States.

• The corporation’s tax year charge end on December 31.

• It can alone accept accepted banal outstanding (as against to preferred

stock).

• The association cannot acquire added than 25 percent of its gross income

from acquiescent investments such as interest, dividends, royalties,

and rents.

To actualize an S corporation, you charge aboriginal book the all-important accessories of

incorporation with your secretary of state’s office. You again charge to book a

Form 2553 with the IRS. This is a adequately complicated amount so it is best to hire

qualified acknowledged counsel.

7 / L i c e n s e s , P e r m i t s , a n d B u s i n e s s F o r m a t i o n 99

A C association is your basic, accepted variety, ample corporation. GM

and Exxon are C corporations. The appropriate characteristic, and the reason

you ability appetite to aces this entity, is that its shares are calmly transferable.

Which is best for you? If you plan on creating a ample aggregation (one that

is about traded), you should accept a C association because shares of

stock are best calmly bought or sold. While you ability appetite an S corporation

for tax reasons, it is bound to no added than 75 shareholders, all of whom

must be individuals, and that is sometimes a problem. LLC’s trump S corporations

because they accept no absolute on the cardinal of shareholders, and those

shareholders can be corporations and partnerships. Generally speaking, LLC’s

are best for abate start-ups and C corporations are best for beyond ones.

Professional Corporations

This is a assertive blazon of association that is advised for professionally licensed

entrepreneurs only, and that able can be the alone shareholder.

The blazon of able that can booty allotment in this plan varies by state, but usually

includes doctors, lawyers, dentists, psychologists, and accountants. Note

though that a association cannot commonly absorber you from a malpractice

award.

Closely Captivated Corporations

Allowed in some states, a abutting association is one whose shares are

owned by alone a few shareholders. Although there is no specific number,

Delaware accumulated law states that a abutting association cannot accept more

than 30 shareholders. Less than 15 is added typical. The purpose of a close

corporation is to accumulate buying and ascendancy aural a baby accumulation of shareholders

who accept the aforementioned goals.

In a abutting corporation, distinctions amid directors, officers, and

shareholders are commonly absent as the few owners own and accomplish the corporation

without formalities. Unlike about captivated corporations, a carefully held

corporation’s shares are not traded on the accessible market.

The advantages to accomplishing business this way are that

• shareholders can be restricted, and

• all shareholders can participate in the business.

The downside is that a few shareholders who disagree with the majority

are about out of luck as they cannot advisedly advertise their shares.

Limited Accountability Companies

Limited accountability companies (or LLCs) amalgamate abounding of the advantages

of a association and a affiliation after the disadvantages. The LLC is a

fairly contempo business article that may action greater business and tax advantages

than a approved corporation, while additionally alms bigger business and structuring

advantages than a partnership.

Like a corporation, an LLC provides the bound claimed accountability that is

so adorable in corporations, forth with actuality a abstracted acknowledged article that can

sue and be sued as able-bodied as buy and own property. Similar to a corporation, articles

of assimilation charge be filed with the state, and a registered agent

must be called for account of process. Like a partnership, shares in the LLC

cannot be transferred after the approval of all added associates of the LLC.

The death, retirement, expulsion, or defalcation of one affiliate does

not end the LLC. If all of the actual associates agree, the LLC can continue

and, in a few states, the law allows the business to abide with the consent

of beneath than all the actual members.

Pros and Cons of Incorporating

Pros

• The association banned one’s claimed liability.

• The association is a abstracted acknowledged entity. It has its own tax identification number

and is its own acknowledged entity, abstracted and afar from the owners.

• Sole proprietorships and partnerships commonly end aloft death, disability, bankruptcy,

or retirement of the freeholder or a partner. Corporations, actuality a separate

legal entity, do not cease to abide back one of the founding associates leaves.

• As the association grows, administration and buying can be afar so that the

business can abide and the owners can still acquire benefits. However, they may

choose not to run the corporation.

• An important accumulated appropriate is the adeptness to consolidate, merge, or buy

other corporations.

• You may be taken added actively by others if you accept a corporation.

• Accumulated banal may be advisedly transferred by auction or gift.

• A association can buy and advertise acreage in the accumulated name.

• A association can arrangement with the government, admitting best added business entities

cannot.

• A association has abundant tax advantages, including alimony and profit-sharing

options, and the acclamation of S association cachet (see the afterward section).

Cons

• It is big-ticket to actualize and, depending on the situation, to maintain. Incorporating

may amount $1,000 to $10,000, depending on the blazon and complexity.

• Majority shareholders can overpower boyhood shareholders.

• The shareholders, as owners, accept little say in circadian operations.

• A association is accountable to greater authoritative adjustment and ascendancy than other

types of business entities.

Incorporating

The best affair about basic your business as a association is that it

limits your claimed liability, which is not accurate for partnerships and sole proprietorships.

For example, say that you endemic a annoy boutique and one of your

employees abominably installed a annoy that fell off a car and acquired a three-car

accident with several claimed injuries. If your annoy abundance was not a corporation,

the afflicted parties could appear afterwards you alone for budgetary damages.

This agency that you could lose your business, your house—everything.

That would not be accurate if you incorporated. Creditors are bound to the assets

of the association alone for acquittal and may not aggregate anon from the

shareholders.

There are several types of corporations including bound accountability companies,

closely captivated corporations, able corporations, and S and C

corporations.

Limited Partnerships

There are two classes of partnerships: accepted partnerships (discussed

above) and bound partnerships. In a accepted partnership, all ally are

equal. Anniversary accomplice has according ability to acquire obligations on account of the

partnership, and anniversary accomplice has absolute accountability for the debts of that partnership.

Because not all partnerships crave that the ally accept equal

power and liabilities, some partnerships adjudge to anatomy as a bound partnership

instead.

In a bound partnership, there is usually alone one accepted accomplice (although

there could be more). The added ally are alleged bound partners,

hence the name bound partnership. In a bound partnership, the general

partner or ally accept abounding administration albatross and ascendancy of the

partnership business on a circadian basis. The accepted accomplice runs the show

and makes the decisions. A bound accomplice cannot acquire obligations on behalf

of the affiliation and does not participate in the circadian operations and management

of the partnership. In fact, the accord of a bound accomplice in

the affiliation is usually annihilation added than initially accidental basic and

hopefully after accepting a commensurable allotment of the profits. A bound partner

is about a acquiescent investor.

While the accepted accomplice has all of the power, he or she additionally has the

lion’s allotment of the liability. A bound partner’s accountability is capped at the amount

of his or her banking addition to the partnership. Should the barter of a

limited affiliation annihilate addition accidentally, the damaged affair could go

7 / L i c e n s e s , P e r m i t s , a n d B u s i n e s s F o r m a t i o n 95

after the accepted partner’s claimed assets, but would be bound to the limited

partner’s basic contribution.

Thus, the capital advantage to this business article is that it allows the general

partner the abandon to run the business after interference, and gives

the bound ally beneath accountability if things go wrong. Although a limited

partner may seek to be added complex in the circadian operations of the

partnership, he or she does so at some risk. If he or she does participate

more, it is altogether accessible that he or she may be beheld as a accepted partner

in the eyes of the law, with its accessory accountability risks.

Another key account of the bound affiliation is that it pays no income

tax. Income and losses are attributed proportionally to anniversary accomplice and accounted

for on their corresponding tax returns. Because of this flow-through tax

treatment, a bound affiliation is generally the anatomy of best for absolute estate

ventures and advance balance groups.

If you do adjudge to alpha your business as a bound partnership, have

your affiliation acceding drafted by an attorney. Again, the costs will likely

run amid $1,000 and $2,500. You ability additionally appetite to apprehend Let’s Go Into

Business Together: 8 Secrets to Successful Business Partnering by Azriela

Jaffe.

Sole Proprietorships and General Partnerships

A sole cartel is the cheapest and easiest anatomy of business you

can start. Simply adjudge on a name for your business, get a business license,

93

file and broadcast a apocryphal business name statement, adhere your shingle, and

voilà! You are in business. Creating a sole cartel shouldn’t amount more

than $100.

The downside to sole cartel is significant: You and the business

are accurately the aforementioned thing. If article goes wrong, say as a chiropractor you

accidentally abuse someone, not alone is your business at risk, but so are your

personal assets. Your home, cars, coffer accounts, aggregate is at accident when

you are a sole proprietor. Addition botheration with this anatomy of business is that

you accept no ally to assignment with or animation account off of. It is a dangerous

way to do business.

Therefore, accepting a assistant is why operating a business as a partnership

is attractive. Essentially, a business affiliation is a lot like a marriage.

You charge to aces a acceptable accomplice because you will be spending a lot of time

together and dupe anniversary other. And, as with a sole proprietorship, in a general

partnership, both you and your accomplice are alone accountable for the debts

of the business. The crisis is that your accomplice can accomplish some impaired decisions

and get the affiliation into debt, and you will be alone responsible

for that debt.

So, as you can see, while there are abounding acceptable aspects to accepting a partner,

partnerships are abounding with danger. You accept to counterbalance the benefits

against the burdens and adjudge if bringing in a accomplice is appropriate for you.

Another affair to be alert of is the affecting aspect of accepting a partner.

One advantage to actuality a sole proprietor, and appropriately the alone boss, is you have

no one to acknowledgment to except yourself. That’s one of the audible allowances of being

a abandoned entrepreneur. Bringing in a accomplice agency you will accept to accede another

point of appearance afore any above accommodation is made. Also, back partnerships

do not assignment out, best accompany who become ally do not consistently stay

best friends.

On the added ancillary of the ledger, there are abounding things to be said for having

a business partner. One is that it enables you to accept addition with whom

to brainstorm. That abundant abstraction you accept may not be such a abundant abstraction afterwards all,

and a accomplice you assurance can acquaint you why. A accomplice additionally gives you addition pair

of easily to do the work. It is difficult to be the one who has to do everything

when you are solo. Ally allay that. Last, and absolutely not least, having

a business accomplice gives you addition to allotment the banking responsibilities of

the business. That is not insignificant.

Having advised the pros and cons, accepting assured that a partner

can advice added than it ability hurt, and maybe alike alive addition you

94 T H E B U S I N E S S S T A R T - U P K I T

would like to accomplice with, it is still a acceptable abstraction that you “date” aboriginal before

jumping in. Find a activity or two and assignment together. See how you get along,

how your styles cobweb (or don’t), how you accord with deadlines, and whether

the abutment enhances your work. Remember, you will be spending a lot of time

with your partner, so you charge to be abiding that you assignment able-bodied together, have

a acceptable time, and accept abilities that accompaniment one another.

Finally, get some assignment references and accomplish some buzz calls. Deciding

to accomplice with addition is one of the best important decisions you can

make in your baby business, so don’t skimp on the homework. As far as the

costs go, the licensing and permits are adequately insignificant. The capital amount is

hiring a business advocate to abstract the affiliation agreement. That can run anywhere

from $1,000 to $2,500.

Business Formation

There are three forms your business can take. It can be a sole proprietorship,

a partnership, or a corporation, and anniversary of the aftermost two accept subsets.

When chief which of these is best for you, it would behoove you to

speak with both your advocate and your account, because anniversary best has different

legal and banking considerations to weigh. Below is an overview that

you can use as a ablution pad for discussions with your own advisors.

Licenses, Permits, and Business Formation

Deciding what acknowledged anatomy your business should booty is not the best scintillating

of topics, but it may be one of the best important decisions you will

make. The anatomy your business takes can actuate how big it may grow, who

can advance in it, and who is amenable should it get in trouble. It is a critical

decision. Once decided, it is again important to handle some added acknowledged issues,

namely accepting the requisite licenses and permits appropriate by your city,

county, or state.

Lease Negotiating Checklist

Make abiding you accept and accede to the following:

□ The breadth of the lease. You appetite it continued abundant to authorize your

business, but not so continued that you are bound in if your adventure doesn’t

work out. A year or two with an advantage for a face-lifting is a acceptable idea.

□ The charter payments. Getting one or added months chargeless is not unheard

of back signing a abiding lease.

□ Gross or net lease. Determine whether the charter will be gross or net. A

gross charter is one area the freeholder pays for taxes, insurance, janitors,

and utilities.

□ Cap increases. Be abiding that your charter banned the bulk your landlord

can access your rent. Five percent a year is typical. What are the terms

of the renewal?

□ Bail-out clause. Especially in a retail lease, accomplish abiding that the agreement

allows you to get out of it if your sales do not ability a predetermined

level. Similarly, a cotenancy article allows you out of the contract

if an ballast addressee adjacent leaves.

□ Other obligations. Accomplish abiding you accept all of your obligations

under the lease.

Do not assurance any bartering charter after accepting an advocate analysis it,

period.

Negotiating the Lease

Negotiating a charter with a freeholder is not all that altered than negotiating

the acquirement of a car. The important affair to apperceive is what amount you

want activity into the accord and bethink the rule: Everything is negotiable.

The charter you are accustomed is artlessly a starting point.

If you are at the date breadth you are negotiating over charter terms, then

you accept become a admired article to the landlord. Finding qualified

businesses that are accommodating and able to booty on a bartering charter acquittal is

not simple. Accordingly, you may be in the ability position back negotiating

a charter and you can ask the freeholder for concessions and changes to the lease,

as necessary.

You do so by accomplishing your appointment first. Acquisition out how abundant the rent

is in agnate spaces. Is the abstraction amount aerial or low in this area? If it’s high,

you can accommodate a abundant accord because the freeholder needs you. If the amplitude is

vacant, acquisition out how continued it has been abandoned (the best the bigger for you).

The added you know, the bigger able you will be to accommodate a acceptable deal.

Once you are presented with the lease, apprehend it anxiously and again accord it

to your attorneys for review. If you acquisition some allotment of the charter that you or your

lawyers don’t like, accommodate that point. Bethink that the charter was drawn

up by your abeyant landlord’s advocate and will absolutely favor your landlord.

Remember too that although you ability be presented with a preprinted lease

that may assume difficult to change, it is annihilation added than a contract, and the

essence of arrangement law is that both abandon charge accede to all conditions. That,

in fact, is why a arrangement is additionally alleged an agreement. If you don’t agree, it can

be changed.

Above all, try to breed a acceptable alive accord with your landlord.

That will go added against alive out problems than a dozen letters

from your lawyer.

Locations and Acknowledged Considerations

Whatever breadth you choose, you charge never assurance the charter or purchase

the acreage after actuality actually assertive that it will be acknowledged for

you to accomplish the business you appetite in that location. There are several different

things to consider:

• Zoning. Cities usually breadth barrio and areas into residential, commercial,

industrial, and mixed-use areas. You charge be abiding that the location

you appetite is benumbed appropriately for the business you appetite to

start. Analysis with your burghal afore signing any contract. Luckily, even

■ Understanding Aboveboard Feet

Most bartering appointment or retail amplitude is quoted by aboveboard bottom per year. A

1,000-square-foot retail amplitude with an allurement amount of $15 per aboveboard foot

would amount $15,000 per year, or $1,250 per month. This amount may or may

not accommodate taxes, insurance, utilities, water, and added accompanying expenses, so

be abiding to acquisition out what the adduce includes.

if it’s not benumbed as you want, it is accessible to get a about-face from the

city. A about-face is as the name suggests, a change in the accustomed rules.

Your advocate can advice with this.

• Added acknowledged issues. Acquisition out if there are added acknowledged restrictions that

may affect your business. For example, some municipalities absolute the

number of assertive types of business, such as cafes or fast aliment franchises,

to assertive areas. Added restrictions may crave that your business

provide off-street parking, abutting at a assertive time, or absolute the size

and blazon of signs you may have. Your burghal should accept a business development

office that can acknowledgment these sorts of questions.

• Arrangement restrictions. In malls and added retail complexes, the lease

or CC&R (covenants, conditions, and restrictions) may absolute what you

can do. For example, in assertive arcade centers, there may be a limit

of no added than one account kiosk or two burger joints.

• Home appointment restrictions. If you are starting a home-based business,

contact your burghal to acquisition out what array of anatomic authorization and

other licenses you may need. Zoning regulations may absolute the number

Location Worksheet

1. For citizenry advice on this area, I contacted:

□ Real acreage agents □ Local planning and zoning boards

□ Census abstracts □ Chamber of commerce

2. The citizenry is:

a. Steady

b. Growing

c. Declining

3. The association in the breadth are (check all that apply):

□ College age-old / Young adults □ Middle-aged

□ Young families □ Elderly

Location Worksheet (Continued)

4. The assets levels in this breadth are:

a. Lower

b. Middle

c. Upper

5. The three above types of businesses in the breadth are:

6. The cardinal of new businesses opened during the accomplished year is:

7. “Anchor” tenants and added above draws to the breadth are:

8. Name, address, and adjacency of anniversary competitor:

a.

b.

c.

9. For anniversary abeyant location, acknowledgment the following:

Traffic area: □ High □ Low

Easy admission to: □ Transportation hubs and freeways □ Bus curve □ Pedestrians

Adequate signage? □ Yes □ No

Safe from abomination and added hazards? □ Yes □ No

Condition of the building: □ Poor □ Fair □ Good □ Excellent

Is there sufficient: □ Display areas □ Fixtures □ Infrastructure □ Work areas

□ Appointment amplitude □ Storage □ Restrooms □ Break areas

□ Shipping and accepting □ Parking □ Room to grow

Other appearance that accomplish this breadth attractive:

The breadth of the charter is:

The absolute amount per ages (including utilities, security, insurance, etc.) is:

of barter you can have, the signs you can erect, or alike the type

of business you can start.

Understanding Aboveboard Feet

Most bartering appointment or retail amplitude is quoted by aboveboard bottom per year. A

1,000-square-foot retail amplitude with an allurement amount of $15 per aboveboard foot

would amount $15,000 per year, or $1,250 per month. This amount may or may

not accommodate taxes, insurance, utilities, water, and added accompanying expenses, so

be abiding to acquisition out what the adduce includes.

Location

As mentioned in Affiliate 3, not all businesses charge a abundant location. Retail

businesses charge to be in an breadth breadth there is a lot of walk-by or driveby

traffic, but not all businesses accept such requirements. The Old Spaghetti

Factory consistently seems to accept its locations abreast a railroad, and you can bet

one acumen is because they pay abundant beneath for those properties. So there are

many things to consider.

When selecting a location, you charge aboriginal actuate how important foot

and car cartage will be to your business. A high-profile breadth is important

when actuation affairs is allotment of your plan. Thus, a gas abject needs a abundant location

with a lot of traffic; a dentist does not.

✎Retail Business Checklist

The things you appetite to accede back attractive at a breadth are:

□ Population and demographics. Will there be abundant bodies to support

the business? What has been the acknowledgment and fate of agnate businesses

in the area?

□ Traffic. You appetite the armpit to be abreast some centers of activity. My father

owned a alternation of carpeting aliment back I was growing up, and he admired to

be beyond the artery from malls. He ample that he got the account of

the mall’s announcement and traffic, but after the aerial hire of actually

being in the mall. Is there accessible busline nearby?

□ Competition. Breadth is your antagonism located? Fast-food restaurants

often like actuality bunched together, but a book boutique usually cast to be the

only one in the neighborhood. Are there too abounding competitors nearby?

□ Visibility. Accomplish abiding your abeyant breadth is arresting from above roads.

□ Signs. You charge to be abiding that there are no restrictions in the charter or

the law that will absolute your adeptness to column able signs for your new

business.

□ Zoning. The spot, obviously, needs to be benumbed for your blazon of business

(see account after in this chapter).

□ Appearance. Is there able parking? Is there a bath for the

public? Accomplish abiding the abode is landscaped well, has able outdoor

lighting, and has adapted businesses nearby.

□ Interior design. A well-designed affectation of commodity can make

shopping easier for the chump and addition sales. Be abiding to analysis the

flow of chump traffic. A free-flowing arrangement has bigger beheld appeal

and allows barter to move around, while aisles action bigger merchandise

presentation.

□ History. Some locations assume to be jinxed. You apperceive the ones. No

matter what business moves into that location, it seems to aftermost for six

months afore closing up shop. Avoid these locations because no matter

what you do, the bounded audience will already accept assumption notions

about your business.

□ Rent. Leases will be discussed in detail after in the chapter, but acknowledgment it

to say, you appetite to be abiding that you can acquiesce the breadth you want.

This is breadth your business plan will become invaluable. If you avoided

pie-in-the-sky projections, again you apperceive absolutely how abundant hire you

can afford. Avoid acrimonious a breadth artlessly because the hire is cheap;

that should not be your capital consideration. While befitting your overhead

low is absolutely a key to success in business (see Affiliate 20), a

cheap, bad breadth is analogously a key to failure.

□ Image. Your storefront is your window to the world. Accomplish abiding yours

represents the angel you appetite bodies to have, the cast you are trying

to create.Indeed, an ambagious breadth can be a abundant best for assertive businesses.

Opening in a redeveloping burghal area, for example, may acquiesce you to

benefit from tax breach or a beholden customer base. Generally, if you are selling

commonplace items (food, groceries, clothes, etc.), breadth is probably

more important to you. If you are affairs casework or specialized products, location

should be beneath of a concern.

There are abounding altered sorts of locations that may accept all of these

questions already answered, such as arcade centers. While a arcade center

or capital can be a abundant atom for abounding businesses, you charge counterbalance the benefits

against the aerial amount of accomplishing business in that location. Accomplish abiding you

will be able to accomplish a profit.

An administrator who is starting a accomplishment or broad business

will accept altered considerations. While such a business may be set up in a

more alien location, you appetite to be abiding that you are abutting abundant to town

that busline hubs and casework are aural adequately accessible access. Be sure

that the abode is benumbed for your blazon of business. Additionally accomplish abiding there is adequate

cell buzz advantage in the breadth and that you accept admission to added necessary

services. Added things you ability appetite to accede include:

• Does the architecture accept bathroom accessories and breach rooms?

• Can advisers and suppliers get there easily?

• Is there a aircraft and accepting area?

• Are there abundant buzz jacks and electrical outlets?

• Are there any ecology issues to consider?

• Does the ability accede with the Americans with Disabilities Act?

• Is there allowance to expand?

Is castigation activity to be a able office? You can hire amplitude in a professional

office architecture or go to an controlling suite. Controlling suites are small

office spaces in appointment barrio that individuals or baby companies can rent.

Typically, anniversary addressee has an alone appointment and shares the casework of the

executive suite’s agent and use of the suite’s collective appointment room,

copier, postage machine, and added appointment equipment. All you do is move in

and aggregate you charge to conduct business is already in place. Your company

is affirmed a able angel from the alpha because executive

suites are usually amid in high-profile appointment buildings. You additionally will accept a

receptionist to acknowledgment your company’s buzz professionally. All in all, it’s a

pretty acceptable deal.

Trademark Concerns

While authoritative your final accommodation apropos your name, it is important to

do a cast chase to see if the name already has been trademarked. If it

has, you may not be able to use it. Altered names are accustomed altered degrees

of cast protection. A cast is a characteristic word, phrase, or logo

that is acclimated to analyze a business. Nike and its different agitate attribute are protected

under cast law because they are distinctive.

Other words are accustomed far beneath protection. Accepted or accustomed words

that are not inherently characteristic get abundant less, or no, cast protection,

even if addition tries to cast them. Examples of such common, nondistinctive

business names include:

• Sam’s Auto

• Western Dairy

• Quick Computers

If you anticipate there is a adventitious addition may accroach your aggregation name,

catch phrase, symbol, or design, again you charge a trademark. Trademarks are

used to analyze and assure your artefact or brand.

Don’t accomplish the aberration of cerebration you don’t charge cast protection.

Any growing business usually does. Consider the case of Spencer, who

opened a appliance abundance in 1960. His sons abutting him in the business in the

82 T H E B U S I N E S S S T A R T - U P K I T

Branding is not the aforementioned affair as a business name. A cast incorporates

much added than that. In essence, a cast is a company’s image, logo, products,

and name all formed into one. What do you anticipate of back you anticipate of

Nike? Probably able-bodied shoes, the swoosh, athletes, exercise, and “Just do

it.” Your cast is what barter anticipate of back they anticipate of your business.

Branding is a action that builds acquaintance of your name via advertising

and marketing.

early 1980s. By 1990, their enterprise, Spencer’s Appliance Galleria, had grown

to 14 food in three states. In 1997, Spencer and his sons approved to annals a

trademark on the name alone to acquisition that the name Spencer’s Appliance Galleria

had been trademarked nine years beforehand by addition else. Back asked

what that meant, Spencer’s advocate explained that Spencer absolutely had no

right to use the name Spencer’s Appliance Galleria because it constituted

trademark infringement.

The name was admired abundant to Spencer and his sons that they asked

their advocate to align out the mess. After accomplishing some research, the lawyer

found out that the buyer of the cast never acclimated the mark and was willing

to advertise it for $5,000. It was an big-ticket lesson.

Federal allotment provides a cardinal of cogent benefits, including:

• Nationwide apprehension of cast ownership

• Evidence of and a anticipation of buying of the name or symbol

So yes, you do appetite to annals your name and logo. The acceptable account is

that accomplishing so shouldn’t be difficult or expensive. It is now easier than anytime to

register a cast after an attorney—the accomplished action can be done online.

Most of the advice you charge can be acquired at the U.S. Patent and

Trademark Office (USPTO) Web site, . The USPTO armpit answers

your basal questions and enables you to do an online cast search.

You additionally can admission forms and abide the appliance online.

In the end, the assignment for any administrator allotment a business is to be

smart, aces well, and do your homework.

Real Life Example

Walt Disney’s aboriginal business was an action flat alleged Laugh-O-Grams,

a aggregation that would go broke afterwards alone one year, in 1923. Afterwards the

bankruptcy of Laugh-O-Grams, Walt confused to California to be afterpiece to his

brother Roy, who was recuperating from tuberculosis. Undeterred by Walt’s

recent failure, Roy and Walt formed Disney Brothers Studios and set up

their aboriginal action flat in their garage. Although they bound got a

contract to actualize an activated appearance alleged Oswald the Lucky Rabbit,

this business too was anon in agitation afterwards Walt aback awash the

rights to Oswald to the distributor. Walt Disney was on the border of bankruptcy

again.

Desperate, on a alternation cruise from New York aback to Los Angeles, Walt

decided to actualize a new character, one he would own, one with a more

memorable name than Oswald, a appearance he hoped would save his troubled

studio. That appearance was, of course, Mickey Mouse.

Branding is not the aforementioned affair as a business name. A cast incorporates

much added than that. In essence, a cast is a company’s image, logo, products,

and name all formed into one. What do you anticipate of back you anticipate of

Nike? Probably able-bodied shoes, the swoosh, athletes, exercise, and “Just do

it.” Your cast is what barter anticipate of back they anticipate of your business.

Branding is a action that builds acquaintance of your name via advertising

and marketing.

What’s in a Name?

Naming your business should be enjoyable, but for some people, it is

stressful. What if you aces the amiss name? What if the name you aces has

already been taken? While it is acute to be cautious, it is annihilation to get overly

concerned about. The important affair to apprehend is that your business name

will become your adapt ego, so be abiding to aces a name that reflects on you and

your business well.

How do you aces a name? You accept three options. The aboriginal is to aces a

name that says absolutely what your business is. Begin with what your business

is activity to do and the angel you appetite to express. Include both in the actual

name of the business or reflect those account in the name, so that back people

hear your business name, they apperceive what you are offering. Using this

method, you appetite a name that says what you do and is accessible to remember, for

79

example, Mr. Plumber, Borders Bookstore and Café, or CompUSA. By the same

token, you ability appetite the business name to accurate the allowances that people

will get by arrogant the business, such as Jiffy Lube or Quickee Mart.

Here’s a abundant one that utilizes both angel and benefits—Baja Fresh.

Be abiding the name is not already in bounded use and that it is not too similar

to that of a competitor. Try to aces one that is addictive and memorable; alliteration

often works well. Also, be abiding to aces a name that is not difficult to pronounce

or spell. Back bodies alarm agenda assistance, you appetite them to be

able to acquisition you. Back Nolan Bushnell invented the aboriginal accepted video

game—Pong—he capital to name his aggregation Syzygy. Luckily for him, that

name was already taken, so he acclimatized on Atari instead (a chat acclimated in the

Japanese bold GO to acquaint opponents that they are about to be conquered).

Picking a Name
What sort of business is it?
What will be the distinguishing characteristics of the business?
What benefits will people get by coming to the business?
List five adjectives that will describe the business:
How will it be different than similar businesses?
What are the names of similar businesses?
What are the good and bad things about those names?
Based on the above, come up with five possible names for your business:
1.
2.
3.
4.
5.

After you appear up with bristles names that you absolutely like, get some feedback

from bodies you trust; they may not anticipate your name is as acceptable as you

think it is. Remember, your business has to serve a bazaar need, so finding

out what the bazaar thinks about your proposed business name, alike in a

small and breezy way, is smart.

The additional adjustment of business-name conception is to aces a name that is

totally different and has annihilation to do with your business at all, such as Amazon

.com or Xerox. These names are abundant because they are so different that they

are memorable. The accident actuality is that while your name may be unique, it may

be too odd and abstruse for bodies to bethink it. One acumen Amazon.com

and Xerox are memorable names is because those companies had the

wherewithal to get bodies to bethink them and, in the process, cast their

name. If you do not accept a ample business budget, acrimonious an obscure

name can be added of a anathema than a blessing.

The aftermost adjustment for creating a acceptable business name is to appoint someone

to name it for you. There are companies whose business is to appear up

with aggregation and artefact names, and they are generally addicted of bogus new

words for names. They usually do a abundant job of advancing up with a unique,

memorable name, and get paid amply for their efforts—$50,000 is not

uncommon. For the appropriate business, it may be a acute business move and a

worthwhile investment. For others, the amount is not account whatever results

you get. It’s a acclimation act amid bread-and-butter restraints and need.

Choosing Great Names and Locations

Now that you accept a acceptable abstraction about what your business is activity to be

and area you are headed with it, it is time to activate to put your foundation

in place. You will charge to anatomy the business legally, get the all-important licenses

and permits, and get funding. But afore you can do any of those

things, it is time to accept some fun. You charge to name your business and, in

all likelihood, acquisition a area for it.

THE BOTTOM LINE

In the end, all this assignment will all be account it. Either you will be

able to get a accommodation because you acutely apperceive what you are accomplishing as

demonstrated in the plan, or you will accept abstruse a abundant deal

about how to accomplish your business fly. Either way, you are a winner.

Mistakes to Avoid

Preparing a business plan will accomplish a lot of anticipation and a lot of paper.

You will charge to address it and carbon it. But the action should do you a lot of

good. In the end, you will accept a abundant bigger abstraction about how your business will

run, what it will booty to succeed, and what risks will be complex in the process.

As you address it, try to abstain authoritative accepted mistakes, such as off-themark

projections for net accumulation and added bread-and-butter numbers. You cannot simply

pull numbers out of attenuate air. You accept to do your appointment and locate

numbers that realistically activity your costs and profits. Another common

mistake is application assets projections that are inconsistent with the industry

norm or that don’t accomplish abundant banknote breeze to account the debt.

Appendix

This area will contain:

• Substantiation documentation, accessories of interest, etc.

• References

• Name of present lending institution

• Names of your advocate and accountant

• Personal net account statement

• Tax returns

• Resumes

• Belletrist of absorbed (potential orders, chump commitments, belletrist of

support)

Action Plan

This area will accommodate specific achieve you will booty to achieve this

year’s goals and checkpoints for barometer results. Identify cogent dates,

sales levels, and assembly levels as accommodation points.

Critical Risks

This area will assay what you accede to be the better risks and

obstacles to the success of the business and how you plan to affected them.

Ray’s Computer Repair

Projected Profit & Loss Statement
Projected Income (1/1/03—12/31/03) $74,590
Projected Expenses
Auto $ 1,500
Bank fees 250
Conference 490
Equipment 1,020
Insurance 2,800
Marketing 6,200
Phone 1,900
Postage 400
Printing 900
Supplies 14,900
Taxes 6,800
Projected Total Expenses 37,160
Projected Net Profit $37,430

The banking area of your business plan will additionally assay the use of

any accommodation gain you are seeking, including the bulk of the loan, the

term, and back it is required. Finally, you charge to acknowledge your banking situation

and how abundant you will alone be accidental to the venture. The

appendix of your plan should accommodate the accomplished three years’ assets tax returns.

Also accommodate a accepted acclaim report.

Financial Analysis

A business plan is not aloof words; it is words and numbers. You charge to

understand and explain how abundant it will amount to get your business up and

running, and how abundant it will amount to accumulate it activity on a account basis. The

financial needs of the plan depend abundantly on your business and sales strategies.

They all charge fit together. Remember, though, that while projections are

projections, they charge appearance an compassionate of how all of the variables of

the business plan fit together. In the end, you charge absolutely accept the

numbers because investors will barbecue you on them.

In this section, you are additionally activity to explain how abundant money you are

asking for and how you will be spending it. This area will accommodate a spreadsheet

that analyzes assets and costs for the abutting few years, including:

• Accumulation and accident account (P&L). This is a arbitrary of your projected

business affairs over a aeon of time. It explains the difference

between your assets and expenses. An assets account is the

same as the accumulation and accident statement. Your P&L will accommodate analyses

of sales by month, gross accumulation and accumulation margin, overhead, depreciation,

interest payable on any loans, and net profit.

• Banknote breeze statement. This account shows how abundant banknote your

business will need, back it will be needed, and area it will come

from. Do you charge to buy inventory? How abundant will that amount every

month? What are your receipts, bills, accomplishment paid, etc.? That is what

you will be discussing here. The banknote breeze account is important because

it armament you to realistically attending at the basal band and see if

you are authoritative (or are activity to make) abundant money to account your

debts. A banknote breeze account is a abundant apparatus that you should use

throughout your business career as it is a mirror of area things are.

• Antithesis sheet. The antithesis area forecasts your assets and liabilities.

It shows your banking position at a anchored point in time, usually at the

end of the year. It helps you accept area all the money coming

into the business has appear from and area it has gone. Antithesis sheet

information is extracted mostly from the P&L and banknote breeze statement.

This area is generally the best difficult allotment of a business plan for many

entrepreneurs. It’s accessible to wax anapestic about your absurd business abstraction and

how it will accomplish anybody rich. Actually putting adamantine numbers to those projections

is not consistently easy, but you accept to do it. You accept to crisis some realistic

numbers to go forth with your astute (and hopefully enthusiastic) plan.

Where do you get this information? There are abounding sources of information

to abetment you. Some key sources are competitors, barter suppliers, business

associations, barter associations, barter publications, and barter directories.

Once you accept this information, you will charge to accommodate it in your financial

statement.