Posted by Biz Central USA Marketing Team on September 24, 2008 under Small Biz and Entrepreneurship | 
Many contractors are unaware of the numerous small business certification and assistance programs that exist today to aid underprivileged businesses. In fact, many of these programs are aimed specifically at overcoming the effects of discrimination, which may be a significant obstacle for such individuals to conquer. Here at BizCentral, we seek to create increased awareness of these opportunities, as well as to assist socially and economically disadvantaged firms in obtaining the credentials necessary to compete with larger entities.
Numerous government entities, including the Small Business Administration and Women”s Business Enterprise National Council offer innovative opportunities to assure that small contractors are not left behind in the race for federal contracts. Programs such as the SBA’s 8a teach small companies how to compete in the federal contracting arena and how to take advantage of greater subcontracting opportunities available from large firms as the result of public-private partnerships. For more detailed information on the most common certification programs, check out:
•SBA- 8a or SDB
•Women’s Business Enterprise National Council
• Minority Supplier Development Council
• HUB Zone
• Veteran Owned Business
• Department of Transportation
Nonetheless, the process for applying for inclusion in these programs can be grueling. You must meticulously review application requirements and organizational documentation to assure that each your business has the greatest chance at successfully obtaining certifications and subsequently competing for beneficial contracts, thus bolstering profits. These programs are, in effect, the gateway to opportunity for small contractors and subcontractors.
Posted by Biz Central USA Marketing Team on September 19, 2008 under Small Biz and Entrepreneurship |
Most small business owners view promotion and advertising as a luxury that they cannot afford. Unfortunately, this usually results in ineffective promotion and poor results. You should assess your potential customers and competition and the business’s products and services to determine a promotion strategy. Undertaking market research and developing a marketing strategy is essential to success. Such research should answer questions such as:
Who is your typical buyer?
How do your potential customers’ habits and behavior play into their purchasing decisions?
How do you know they want what you offer?
How much are they willing to pay?
Where (and how) will your customers want to buy your product or service?
How many people are in the overall market you’re going after?
What media has the greatest impact with your target market?
Once you have completed quality market research, you’ll have a better idea of the specific marketing methods that will be best for your business. There are various types of marketing for you to consider:
Grassroots Marketing- Consists of using resources you already have to spread the word about your product or service.
Public Relations- Common activities include speaking at conferences, winning industry awards, working with the press and employee communications.
Affiliate Marketing- Involves hooking up with other businesses or organizations that share a similar target audience to yours.
Online Marketing- Creating a website can be made fairly simple by working with a company that specializes in helping small businesses create their web presence.
Traditional Marketing- Includes billboards, magazine and newspaper ads, broadcast spots such as those on TV and radio, and even direct mail pieces
If this seems like a lot to undertake, that’s okay. Experienced marketing professionals can assist you every step of the way, making your journey to success a smooth one.
Posted by Biz Central USA Marketing Team on September 16, 2008 under Small Biz and Entrepreneurship |
Once you’ve developed your idea, selected the best legal form of your company, and obtained adequare financing, there are still additional factors to consider.
One important decision will be to choose an appropriate location for your business. The choice of location is important to the success of your business and you should begin such consideration early in the planning process. You must consider location in regard to customers, suppliers, employees, and government regulations. You should outline the business’s needs and select a site that best meets these requirements.
Another consideration that must be made is compliance with any and all registration or licensing regulations. Various types of licenses are required in order to conduct business:
Local- Business licenses are issued by cities to businesses located within the city limits and for businesses conducting business within the city limits.
State- Your business may need to be registered with the state tax authority.
Federal- Your business must have a federal identification number (federal tax number).
Additionally, there may be other licenses that affect your particular business:
Occupational Safety & Health Administration
Health Department
Alcoholic Beverage Control in your state
Department of Consumer Services in your state
You should check with your industry association to determine if other licenses apply to your business.
Posted by Biz Central USA Marketing Team on September 11, 2008 under Small Biz and Entrepreneurship |
Once you have developed the idea for starting your small business, and have determined your preferred legal structure the next, and possibly most cumbersome, step is to obtain financing for your business. This is a critical step. You’ve got to find funding for your business but ensure that it’s the right kind of funding. You must be selective and smart when seeking money for your startup. To identify which form of financing is just right for you, think about your long-term personal and business goals.
There are seven common ways to fund your business. These include:
Bootstrapping- Funding the business yourself, using your savings, your initial revenues, credit cards, equity pulled from your home, etc.
Debt financing- Requires that you qualify for a traditional bank loan or that you find a bank that can provide you a loan with a SBA guaranty.
Grants- Special programs designed to fuel the innovative fires of small businesses, and typically target specific groups or types of businesses, such as technology businesses, veteran-owned businesses, women-owned businesses and minority-owned businesses. These are rare for for-profit ventures.
Friends and Family- Just like it sounds, raise money from people you know well, either in exchange for equity or as a loan to be repaid.
Angel investors-Individuals who invest in companies at an early stage in exchange for equity and the chance to help guide the company.
Factoring- A financial institution (factor) advances the entrepreneur money against proceeds from the entrepreneur’s outstanding accounts receivables.
Venture capitalists- Individuals or companies with large amounts of capital to invest and expect higher returns. They invest as a profession and generally on behalf of other investors.
Stay tuned for more…
Posted by Biz Central USA Marketing Team on September 9, 2008 under Small Biz and Entrepreneurship |
As mentioned in Part 1, a crucial step in starting your small business is the selection of a legal structure for your company. There are many things to consider in making this choice, but for starters it’s important to take the time to review your business plan. What should emerge are answers to questions like:
• Do you want investors as shareholders in your company?
• Do you want to maintain control of the company if you have investors involved?
• Do you want to avoid double taxation?
• Is there a great risk of liability associated with your specific business?
Sole Proprietorship
A sole proprietorship is limited to a single owner who has total control of and responsibility for the business. The profit or loss of the business is taxed as personal income and is included on the owner’s individual tax return. The sole proprietor has full legal liability for debts and claims against the business.
Advantages:
1. Easy to organize and flexible
2. Owner has control and responsibility
3. Minimum legal restrictions
4. Income taxed as personal income
5. Minimal organizing costs
Disadvantages:
1. Owner is personally liable for debts or claims
2. Business terminates with the owner
3. Limited ability to raise capital
Partnership
A partnership is an association of two or more persons acting as co-owners of the business. A Partnership Agreement should be prepared to establish the rights and duties of the individual partners. As with sole proprietorships, your company name is not protected. This means any new or existing business could incorporate using your company name.
Advantages:
1. Simple to organize
2. Combined funding and talents of partners
3. Flexibility in profit or loss sharing
4. Income taxed as personal income
Disadvantages:
1. Unlimited legal liability for all partnership debts and claims
2. Partnership terminates upon death, withdrawal, or addition of partner
3. Individual partners act as agents for the partnership
Corporation
A corporation is a separate legal entity that is formed by filing Articles of Incorporation with the Secretary of State. The owners of a corporation are known as stockholders. Incorporating shields you and the members of your company from personal liability and reserves rights to your company name. A subchapter S corporation is a special form of a regular corporation. It is incorporated as a regular corporation, but asks for special permission from the IRS to be taxed as a partnership.
Advantages:
1. Limited liability for managers and stockholders
2. Ownership is transferable
3. Corporation does not terminate when ownership changes
4. “S” corporation income or loss is passed through to stockholders and taxed at the individual level
Disadvantages:
1. Costly and complicated to establish
2. Double taxation for regular corporations
3. Extensive record keeping necessary
4. One class of stock for “S” corporations
Limited Liability Company
The Limited Liability Company (LLC) is a hybrid form of organization that combines the attractive features of both a general partnership and a corporation. An LLC is established by filing the Articles of Organization and an Operating Agreement with the Secretary of State’s Office.
Advantages:
1. LLC owners are not personally liable for business debts, such as court judgments, or legal settlements obtained against the business.
2. Flexible Management
3. One-level taxation: The LLC, like a partnership, is normally recognized by the IRS as a “pass through” tax entity
4. Flexible distribution of profits and losses: The LLC is treated like a partnership for tax purposes, and this applies to the division of profit and losses of the LLC.
Disadvantages:
1. Mergers: If a corporation is later merged with another stock being traded for stock, the transaction may be tax-free. LLCs don’t qualify for this favorable tax
2. Taxes: A few states impose very high taxes on LLCs.
Stay tuned for Part 3…
Posted by Biz Central USA Marketing Team on September 5, 2008 under Small Biz and Entrepreneurship |
Each year millions of people identify a business opportunity and try to translate the opportunity into a profitable business. In fact, over one million new businesses are formed each year. You may be thinking of starting your own small business but aren’t sure where to begin. Here are some tips to get you started.
First, you’ll need to learn as much as you can about your proposed business. Ask questions. Join industry associations. Study competitors carefully. Is there a need for the product or service you are going to offer? Once you’ve decided your business is a go, the next step is to fully plan for success.
Every business begins with an idea and a business plan is necessary to guide the investigation and development of this idea. A business plan is the road map for the success of your business. In writing a business plan, you will consider all the parts of your business in detail. You will look carefully at your business, the industry, your competition, your customers, and your ability to succeed. Most importantly, you will create a financial plan for the business.
Next you’ll need to determine the legal structure of your business. There’s no universally “right” structure for all businesses. The decision for the legal form of business will be made to best suit your needs, personal management style, and financing requirements.
Before setting up your company, it’s important to understand all the options available to you—in particular, you’ll want to evaluate the advantages and disadvantages of each business formation, paying special attention to the tax implications and government formalities. If you are unsure about this decision, you should consult an expert.
Four forms of business ownership include:
Sole Proprietorships
Partnerships
Corporations
Limited Liability Companies
In Part 2, I’ll discuss each of these ownership structures in detail.
