| Starting a business can be a rewarding | | | | ask the broker to do a risk assessment |
| experience, but it can also be very time | | | | to determine what coverages you might |
| consuming and difficult. Many resources | | | | need and why. Remember, the broker makes |
| are available to assist you, but | | | | money by selling you insurance |
| information overload can cause you from | | | | "products" so be sure to question the |
| moving forward. | | | | types of coverage and amounts. If your |
| Keeping it simple is often the best way | | | | broker can't explain why he or she is |
| of maintaining the momentum necessary to | | | | recommending the types and amounts of |
| get your business started. There are a | | | | coverage in the risk assessment, find |
| series of steps to ensure success. | | | | another broker. |
| The first step toward getting your | | | | The fourth step is recognizing and |
| business going is deciding on a name, | | | | implimenting taxes. Sole proprietors |
| for example "New York Landscaping." Any | | | | need to be conscious of local, state and |
| name that you do business under other | | | | federal taxes and registration |
| than your own given name is called a | | | | requirements relating to their |
| "fictitious" or "assumed" name, and | | | | businesses. |
| certain steps need to be taken in order | | | | Hiring an accountant or bookkeeper to |
| for you to do business under that | | | | help set up a simple accounting system, |
| fictitious or assumed name. | | | | or using a software package is a good |
| Depending on where you live, different | | | | place to start. |
| government agencies track which names | | | | Hiring a tax professional knowledgeable |
| are available. Look in your local phone | | | | about local and state taxes relating to |
| directory, under government agencies to | | | | your business, or contacting the local |
| find the number, or contact your local | | | | tax authorities before you begin |
| Secretary of State. | | | | generating revenue or expending money |
| Check to find out if the name you want | | | | can help you stay organized and be ready |
| has been taken. If it is available, you | | | | for tax time. |
| may need to file a fictitious or assumed | | | | Additionally, the IRS offers assistance |
| name certificate with the state or local | | | | for entrepreneurs starting a small |
| fictitious name office. Some areas will | | | | business in various publications. You |
| also require you to publish a notice in | | | | can download IRS Publication 334, |
| the local paper about your new assumed | | | | entitled "Tax Guide for Small Business", |
| name. Both state and federal law | | | | and Publication 583, entitled "Taxpayers |
| regulates the use of names and | | | | Starting a Small Business" from the IRS |
| "trademarks". To avoid conflicts with | | | | web site. |
| other businesses regionally or | | | | The fifth step is hiring employees (if |
| nationally using your business's name, | | | | needed). Though many small business |
| or the names of your products, you may | | | | people start out running their own shop, |
| want to consider registering your | | | | success will often bring the need for |
| trademark on the federal or state level. | | | | expansion. When an employee is added, |
| Contact an intellectual property | | | | you must obtain an Employer |
| attorney for trademark search and | | | | Identification Number from the IRS. You |
| registration services. | | | | can download Form SS-4 from the IRS web |
| The second step is knowing that | | | | site. |
| different areas have differing licensing | | | | In the United States, the Workers |
| and permit requirements depending on the | | | | Compensation scheme does a lot to |
| type of business you are going into. | | | | protect employers from lawsuits by |
| Most businesses that require a license | | | | employees injured on the job, while also |
| will have a local licensing authority | | | | providing employees with easier |
| that can guide you through the process. | | | | compensation for workplace injuries. Be |
| Find out the licensing requirements on | | | | sure to talk to your insurance broker |
| federal, state, and possibly even local | | | | about workers' compensation insurance. |
| levels for your type of business and get | | | | Talk to your tax adviser, and make sure |
| licensed. Failure to be properly | | | | you register with your state for payment |
| licensed could result in penalties such | | | | of unemployment compensation taxes. |
| as fines, closure of your business, and | | | | Download IRS Form W-4 from the IRS web |
| imprisonment in some cases. | | | | site to take care of employee |
| The third step is getting insurance. | | | | withholdings. You should get copies of |
| When things are going smoothly, | | | | INS Form I-9 to verify your employees' |
| insurance can seem an unduly burdensome | | | | eligibility for employment in the United |
| expense on a small business. But when | | | | States. |
| things go wrong, whether or not you have | | | | Finally, issues regarding wrongful |
| insurance can mean whether or not you | | | | termination, discrimination, workplace |
| and your business survive a catastrophic | | | | harassment, and other legal issues have |
| event like a lawsuit, fire, or natural | | | | come to the forefront in today's |
| disaster. | | | | business environment. Make sure you have |
| Liability insurance protects you against | | | | an employment agreement that spells out |
| liability in the event of injury to | | | | whether your employee is "at-will". ex: |
| others or damage to other persons | | | | can be let go at any time without cause, |
| property. Liability insurers most often | | | | or the terms of the employee's contract |
| have two duties: | | | | for employment. |
| 1. The duty to defend you. Hire a | | | | Make sure you Draft employee guidelines |
| lawyer, if you get sued and | | | | or an employment manual to make sure |
| 2. the duty to indemnify you. Pay for | | | | there are no misunderstandings about |
| damage or injury to others. Both duties | | | | what expectations, rules and |
| are extremely important, but the first | | | | responsibilities are in place. Document |
| is often overlooked by small businesses. | | | | any issues relating to your employees |
| The cost of defending a lawsuit can | | | | well and be proactive about handling |
| easily run into the tens of thousands, | | | | disputes. A little planning in the |
| or even hundreds of thousands of dollars | | | | beginning can save a lot of headaches |
| even if you win. That's why being | | | | and legal expense later on. |
| careful is no substitute for liability | | | | In conclusion- hiring independent |
| insurance. | | | | contractors is often a good way to avoid |
| Make sure you have adequate coverage for | | | | the administrative burdens of hiring |
| your vehicles and those of your | | | | employees, but be precautious. There are |
| employees when used for business | | | | many pitfalls to hiring an independent |
| purposes. You can be sued and held | | | | contractor who is for all intents and |
| liable for injury or damage done by your | | | | purposes an employee. Talk to a lawyer |
| employees if it is within the course and | | | | and your tax advisor about who is an |
| scope of their employment. | | | | employee versus a contractor. |
| Property and theft insurance may be an | | | | Copyright © 2005 Abe Cherian |
| important consideration, as well as | | | | You may publish this article in your |
| product liability or service liability | | | | ezine, newsletter on your web site as |
| insurance. This is often called "errors | | | | long as the byline is included and the |
| and omissions" coverage. | | | | article is included in it's entirety. I |
| Interview a few local insurance brokers | | | | also ask that you activate any html |
| and find one that seems knowledgeable | | | | links found in the article and in the |
| and that you feel comfortable with. Then | | | | byline. |