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Five Steps to Starting a Business By Abe Cherian Copyright ? 2005

Starting a business can be a rewarding experience, but it can
also be very time consuming and difficult. Many resources are
available to assist you, but information overload can cause you
from moving forward.

Keeping it simple is often the best way of maintaining the
momentum necessary to get your business started. There are a
series of steps to ensure success.

The first step toward getting your business going is deciding on
a name, for example “New York Landscaping.” Any name that you do
business under other than your own given name is called a
“fictitious” or “assumed” name, and certain steps need to be
taken in order for you to do business under that fictitious or
assumed name.

Depending on where you live, different government agencies track
which names are available. Look in your local phone directory,
under government agencies to find the number, or contact your
local Secretary of State.

Check to find out if the name you want has been taken. If it is
available, you may need to file a fictitious or assumed name
certificate with the state or local fictitious name office. Some
areas will also require you to publish

a notice in the local paper about your new assumed name. Both
state and federal law regulates the use of names and
“trademarks”. To avoid conflicts with other businesses
regionally or nationally using your business’s name, or the
names of your products, you may want to consider registering
your trademark on the federal or state level. Contact an
intellectual property attorney for trademark search and
registration services.

The second step is knowing that different areas have differing
licensing and permit requirements depending on the type of
business you are going into. Most businesses that require a
license will have a local licensing authority that can guide you
through the process.

Find out the licensing requirements on federal, state, and
possibly even local levels for your type of business and get
licensed. Failure to be properly licensed could result in
penalties such as fines, closure of your business, and
imprisonment in some cases.

The third step is getting insurance. When things are going
smoothly, insurance can seem an unduly burdensome expense on a
small business. But when things go wrong, whether or not you
have insurance can mean whether or not buy generic drugs online you and your business
survive a catastrophic event like a lawsuit, fire, or natural
disaster.

Liability insurance protects you against liability in the event
of injury to others or damage to other persons property.
Liability insurers most often have two duties:

1. The duty to defend you. Hire a lawyer, if you get sued and

2. the duty to indemnify you. Pay for damage or injury to
others. Both duties are extremely important, but the first is
often overlooked by small businesses.

The cost of defending a lawsuit can easily run into the tens of
thousands, or even hundreds of thousands of dollars even if you
win. That’s why being careful is no substitute for liability
insurance.

Make sure you have adequate coverage for your vehicles and those
of your employees when used for business purposes. You can be
sued and held liable for injury or damage done by your employees
if it is within the course and scope of their employment.

Property and theft insurance may be an important consideration,
as well as product liability or service liability insurance.
This is often called “errors and omissions” coverage.

Interview a few local insurance brokers and find one that seems
knowledgeable and that you feel comfortable with. Then ask the
broker to do a risk assessment to determine what coverages you
might need and why. Remember, the broker makes money by selling
you insurance “products” so be sure to question the types of
coverage and amounts. If your broker can’t explain why he or she
is recommending the types and amounts of coverage in the risk
assessment, find another broker.

The fourth step is recognizing and implimenting taxes. Sole
proprietors need to be conscious of local, state and federal
taxes and registration requirements relating to their
businesses.

Hiring an accountant or bookkeeper to help set up a simple
accounting system, or using a software package is a good place
to start.

Hiring a tax professional knowledgeable about local and state
taxes relating to your business, or contacting the local tax
authorities before you begin generating revenue or expending
money can help you stay organized and be ready for tax time.

Additionally, the IRS offers assistance for entrepreneurs
starting a small business in various publications. You can
download IRS Publication 334, entitled “Tax Guide for Small
Business”, and Publication 583, entitled “Taxpayers Starting a
Small Business” from the IRS web site. http://www.irs.gov

The fifth step is hiring employees (if needed). Though many
small business people start out running their own shop, success
will often bring the need for expansion. When an employee is
added, you must obtain an Employer Identification Number from
the IRS. You can download Form SS-4 from the IRS web site.

In the United States, the Workers Compensation scheme does a lot
to protect employers from lawsuits by employees injured on the
job, while also providing employees with easier compensation for
workplace injuries. Be sure to talk to your insurance broker
about workers’ compensation insurance.

Talk to your tax adviser, and make sure you register with your
state for payment of unemployment compensation taxes.

Download IRS Form W-4 from the IRS web site to take care of
employee withholdings. You should get copies of INS Form I-9 to
verify your employees’ eligibility for employment in the United
States.

Finally, issues regarding wrongful termination, discrimination,
workplace harassment, and other legal issues have come to the
forefront in today’s business environment. Make sure you have an
employment agreement that spells out whether your employee is
“at-will”. ex: can be let go at any time without cause, or the
terms of the employee’s contract for employment.

Make sure you Draft employee guidelines or an employment manual
to make sure there are no misunderstandings about what
expectations, rules and responsibilities are in place. Document
any issues relating to your employees well and be proactive
about handling disputes. A little planning in the beginning can
save a lot of headaches and legal expense later on.

In conclusion- hiring independent contractors is often a good
way to avoid the administrative burdens of hiring employees, but
be precautious. There are many pitfalls to hiring an independent
contractor who is for all intents and purposes an employee. Talk
to a lawyer and your tax advisor about who is an employee versus
a contractor.