Getting A Business License: Once you have met with the zoning and business license departments and have determined that your business meets all the specific requirements for operation as a home-based business, you are ready to officially apply for the license. Business licenses are generally issued through the city or county clerk’s office and require completion of an application form. The most common information asked will cover business name, type of legal structure, location, type of business, number of employees, expected gross income and vehicles to be operated. Upon submission of the application and fee, the application will be reviewed prior to being issued. The license is renewed annually, subject to adherence to the city’s codes and regulations.

Filing Your DBA: If you plan to conduct your business under a fictitious name, you must file a DBA, which stands for “Doing Business As.” It may also be referred to as the Fictitious Name Statement. A fictitious name is any business name that does not contain your full legal name as a part of it. In some states you will be required to file a DBA even if you are using your legal name.

The purpose of the DBA is to inform the general public that you are beginning an operation under an assumed or fictitious name and that you are the individual who will be conducting that business. It must be published in a general circulation newspaper in the county in which your business is located. The ad generally must run in four consecutive issues. During this time, anyone may challenge your right to do business under that name. Following publication, verification must be filed with the city or county clerk.

The DBA gives you the exclusive right to use the name and keeps others from using the same or similar name. The time and money spent is very small compared to the benefits you will derive from becoming the owner of your business name.

Obtaining A Seller’s Permit: A seller’s permit number is required of anyone who purchases items for resale or who provides a taxable service in all states where sales tax is collected. An example of a taxable service would be clock repair. The labor or repair is not taxable, but the parts may be. A seller’s permit is obtained through the state agency responsible for the collection of sales tax. Most often it will be the Department of Revenue.

The retailer or final seller, not the customer, is responsible for paying the sales tax. Consequently, every seller engaged in the business of selling a tangible product or of providing a taxable service in a state where sales tax is collected is required to hold a seller’s permit for the purpose of reporting and paying their sales and use tax liability. The seller’s permit may also be referred to as a resale number or a resale certificate.

Your application must be based on the fact that you will be purchasing taxable items that you will offer for sale to the ultimate consumer or to other resellers or that you will be providing a taxable service. Any other reason for your request may be grounds for denial.

Sales Tax: The rule of thumb is: if you do not intend to resell your purchase through your business, do not use your resale number to buy it tax-free. Contact the agency responsible for the collection of sales tax in your state to determine the regulations on your particular type of business.

Setting Up A Business Bank Account: Often a business owner is tempted to run business finances through personal accounts. It is imperative that you keep your personal and business finances separate. Failure to do so can cause problems with your recordkeeping and tax computations. Business accounts are necessary for credibility when dealing with other businesses. You will not have much credibility with wholesalers or suppliers if you do not pay with a business check.

The first account opened with a bank is usually the business checking account. You must show proof of DBA filing before the account can be opened under your business name. The DBA gives verification that you are authorized to deposit checks made out to the business name. The DBA gives verification that you are authorized to deposit checks made out to the business name. Be sure to take your verification with you. The bank will make a copy for their records.

Tip: When you open your account, request that your checks be numbered beginning with a number higher than 101. This is a tip-off that you are a new business. You want to look established in the eyes of your creditors. The selection of the bank with which you will do business should be undertaken with consideration. Banks vary greatly in the services they offer, as well as in the charges for those services.

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What is a Business Plan?

You can pretty much define a business plan as a resume for your business idea in mind. Some may say it’s like your company’s calling card. When you need money to start your business, or when you need an office space, your business plan is what will do most of the talking to convince your investors / lenders or property managers to believe in your business and give you what you need.

Why is it important to have a Business Plan?

The time that you spend on writing a solid business plan will pay for itself in corporate strategic and tactical clarity as your business grows. A solid business plan: (not in particular order)

• Allows you to describe your vision / concept in writing, helping your potential investors to understand and believe in you; it serves as a basis for discussion with third parties such as shareholders, agencies, banks, investors…etc.
• Allows you to identify the structure of your business, giving you the chance to focus on the big picture. Your business plan is the “framework” which your business must operate within. A solid business plan provides a considered and logical framework within which a business can develop and grow with business strategies in the long run (not for just short-term growth).
• Determines the startup and managing costs.
• Clearly defines your target audience and provides detailed research on your target market.
• Identifies potential opportunities and obstacles that the business may encounter down the road.
• Identifies the strengths and weaknesses of your business and your competitors.

No businesses are the same, and no business plans are the same. Your business plan is like your business blueprint; it should be unique. While it is important to be able to illustrate your business concept well enough for others to understand what you hope to be doing, the business plan is essential for your own use. It is about the process of developing the business plan; the process helps you to focus on exactly what you are trying to achieve. It will give you a lot more clear vision of the entire structure of your business as you develop your business plan through detailed research and planning.

A business plan consists of the following parts:

Executive Summary

• Briefly describes the business concept
• Highlights the important financial points of the business such as sales, profits, cash flows, ROI
• Clearly states the capital needed to start the business and to expand
• States legal information about the business, the owners and key personnel.

Business Description

• Describes the business structure on how it operates / profits
• Describes the nature of industry in which the business plans to operate
• Identifies the business’ current position and future possibilities

Market Strategies

• Defines the target market
• Defines the strategies the business plans to use in order to tap into the target market
• Describes the pricing of products or services with respect to the demand of the target market

Competitive Analysis

• Describes the competitors in your target market and how you plan to obtain your share of the market
• Analyzes your competitors in the following categories: product, distribution, pricing, promotion, and advertising.

Design and Development Plan

• Describes the steps the business will take to carry out its plan with scheduling and cost analysis.
• Identifies the risks during the development period

Operations and Management Plan

• Describes the strategies the business will implement in order to operate and grow effectively

Financial Statements

• Defines all the financial aspects of a business.

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