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