contrary, we advise that before investing any money in a business

venture, you seek counselling and help from a qualified

accountant and/or attorney.

Just about the first thing you should consider before deciding to

start or purchase a business is the legal form you'll be

operating under. There are basically four choices: sole

proprietorship, partnership, limited partnership, and/or

corporation.

Each has a number of advantages and disadvantages. We'll try to

enumerate some of them for you.

As much as anything else, for many people starting a business is

a form of ego-gratification, and they form a corporation for some

sort of prestige gain - just to say, "I own a corporation."

With just a little bit of observation, you'll find that one of

the major causes of business failures is due to the founder

wasting start-up capital on frills, such as an impressive

store-front office, expensive furnishings, and corporate legal

costs.

One of the basic traits you must develop it you're going to be

successful in business, is a tight hold on your expenditures. In

fact, a good rule of thumb is that anything that does not make

money for yo or protect your investment, should not be purchased

at this time. Very definitely, this applies to the expense of

setting up your own corporation.

Unless you have a partnership and start your business as such,

the only real advantage to forming a corporation would appear to

be that a corporate structure will semi-protect the property you

personally own.

As an example, you own a home and car. You form a corporation to

protect these possessions from business losses. Yet, if you can

be found guilty of misusing corporate funds, your business

creditors can pierce the corporate shield and come after your

possessions.

Basically, if you invest everything you have in your business, as

most newcomers do, you don't usually need a corporation because

you have nothing to protect. Your household possessions,

personal belongings, generally your car, and even a portion of

the equity in your home is protected by the homestead provision

of the Federal Bankruptcy Act, and cannot be taken away from you.

As a sole proprietor or partner of a business you'll be paying

taxes on your overall earnings, much the same as if you were

holding down a salaried or hourly paid job. Whether you do or

don't take out money as a salary will have no bearing on the

earnings of your business and tax return.

The often advertised advantage of incorporating, that you can

manipulate your salary in order to save on tax dollars, is real

because of corporation laws. However, the IRS frowns on this

practice. When your business is successful and making a lot of

money, definitely check with your accountant on the advantages of

incorporating.

As a corporation, you'll be subject to a number of other

drawbacks as well: generally higher state taxes, stricter laws

concerning the operation of your business, more elaborate

accounting procedures, and legal papers that are required just

about every time you make a major move or sign almost any

contract. Thus, your legal and accounting fees will be much

higher as a corporation than will those required for a sole

proprietorship type of business.

As a sole proprietor or partnership, you'll find many areas

require the registration of your business name. The cost

however, is minimal, ranging from $5 to $100. About the best way

to find out what laws apply in your area, is to call your bank

and ask if they need a fictitious name registration card or

certificate in order for you to open a business account.

Selecting a name for your business is quite important to you and

particularly relative to advertising. Your business name should

describe the product or services you offer. Fancy names such as,

Linda's Clipping Service will lose potential "walk-in and

passing" customers to the beauty shop across the street that

calls itself, Patti's Beauty Salon or Jane's Hair Styling Shop.

The advantage of using your full name in the title of your

business, such as Johnny Jones' Meat Lockers, has the advantage

of making credit somewhat easier to come by - provided you pay

your bills on time - but it also includes the disadvantage of

confining your services to a local or at most, a regional area.

Should you buy, lease, or rent a space for your business? think

twice before you make any decision along these lines. Most

businesses tend to grow quickly or they never get off the ground.

There are a few exceptions, but only a very few, that tend to

grow at a modified rate.

So, buying a piece of property and setting up your business on or

within that property, obligates you to ownership regardless of

what happens to your business.

Leases are almost always very strong contracts written by

attorneys to the advantage of the property-owner. When you sign

an agreement to pay someone for the use of their space over any

length of time, you're "nailed in" to paying for that space

regardless of what happens to your business.

In the beginning, it's wise to either get the shortest-term lease

possible, or arrange to rent with an option to lease at a later

date. This does not apply to a retail business, unless your

particular business happens to be an untried one.

Definitely, you should open a business bank account. In

selecting a bank for your business, scout around and look for one

that can, and will help you. Determine what your banking needs

will be, and then via telephone, interview the managers of the

banks in your area. The important convenient bank to your

business location.

A point to remember: the closer you can make the relationship

between you and the bank manager, the better your chances are

going to be for approval on loans and/or special favors you may

need at a later date.

Try to become acquainted with as many of the bank employees as

possible. The better you know them, the more courtesies they'll

be extending especially to you in the course of your association.

Just as a doctor is a specialist in his field, and you go to him

for medical problems, your banker is a specialist in his field

and you should go to him for your money problems. In business,

you'll have to learn that everyone is an expert in his own line

of work, and in your associations with other business people,

refrain from acting like a "sharpie" and/or pretending that you

know exactly how everything works in someone else's specialty.

You'll find that very often, different banks specialize in

different types of businesses. As an example, you're sure to

find banks that specialize in real estate transactions,

export-import businesses, and even manufacturing operations only.

What I'm saying here is that if you're planning to sella fairly

expensive item, your customers will probably need and/or want

financing. It will behoove you to select a bank familiar with

your type of product that will afford your customers, through

you, contract financing.

Some of the questions you should ask of your banker include the

following:

Is it necessary to maintain a certain balance in your account

before the bank will approve a loan for you?

What qualifications must you have in order to obtain a line of

credit with the bank?

Does the bank limit the number of loans, or types of loans it

will approve for small businesses?

What is the bank's policy regarding the size of a check you might

deposit that requires holding for collection?

And what about checks less than that amount - will they be

immediately credited to your account?

In almost all types of businesses, it will be to your benefit to

set up with your bank, a method of handling VISA, Master Charge,

and regional credit cards. The important thing here is to

ultimately set up your account in the bank that will service all

of these credit transactions for you - one stop for all your

banking needs. In most instances, you'll find that having the

capability to fill orders/make sales via credit card

transactions, will increase your volume of sales appreciatively.

Once you've made the decision as to which bank is going to handle

your account, you'll need your Social Security Number or your

Federal Employer's Identification Number, your driver's license,

the fictitious name certificate, and if you're requesting a VISA

or Master Charge franchise, you'll also need a financial

statement.

For corporations, you'll also need a corporate resolution

approving of the opening of your business account.

There are different policies exercised in just about every state

regarding installation/hook-up charges by the telephone and

utility companies. Some require a deposit, and some don't.

You'll find that a great number of city business license

departments are there solely for the purpose of collecting

another tax. Depending on the type of business you're asking a

license for, the building and zoning people may inspect your

premises for soundness of structure and safety. Generally, you

won't encounter any difficulties - you simply pay your fee to

operate your business in that city, and the clerk types your name

onto a city license certificate.

Relative to sales tax permits and licenses, each state's rules

and regulations very widely. The best thing to do is call your

state offices and ask for information concerning registry and

collection procedures. Many states require an advance deposit or

bond, and you'll find that some wholesalers or manufacturers will

not sell to you at wholesale prices until you can show them your

sales tax permit or number.

Should your business entail selling your products or services

across state lines, in another state, you're not required to

collect taxes except in those where you have offices or stores.

You may find also that your particular business requires the

collection of Federal Excise Taxes. For information along these

lines, check in with your local office of the Internal Revenue

Service.

Some states also require certain businesses to hold state

licenses, such as those required in many states for TV Repairmen.

These are known as "occupational permits" and are most often

required of barbers, hair stylists, real estate people and a

number of other consumer oriented businesses. If you have any

doubts, check with your state offices for a list of those

occupations that require licensing.

Any business doing business in any type of interstate commerce is

subject to federal regulations, usually through the Federal Trade

Commission. This means that any business that shops, sells or

advertises in more than one state is subject to such regulation,

and this includes even the smallest of mail order operations.

Normally, very few business people ever have and contact with the

federal regulatory agencies. The only exceptions being when

there is a question of your operating your business unethically

or illegally.

Any business that sells or distributes food in any manner almost

always requires a county health department permit. If your

business falls into this category, simply call the county health

department and invite them out to your place of business for an

inspection. The fees generally range from about $25, depending

on the size of your business when they first inspect it for

permit approval.

There are also a number of businesses that require inspection by

a fire marshall, and fire department approval. Generally, these

are those that handle flammable materials or attract large

numbers of people, such as a theater. Overall, the local fire

department has to be allowed to inspect your premises whenever

they desire to do so.

You may also run into a requirement for an air and/or water

pollution control permit. These specifically apply to any

business that burns anything, discharges anything into the sewers

or waterways, or use any gas-producing product, such as a paint

sprayer.

Without a doubt, you'll need to check on local regulations

relating to advertising display signs. Each city or township

makes its own

rules and then enforces those rules according to its own thinking

-check before you contract to have a sign made for your business.

The design and placement of your sign is very important to your

business - specifically to retail establishments - but let me

remind you that your business sign is usually the first thing a

potential customer sees and as such, it should catch his eye and

leave an impression that lasts. It would be a good idea to ride

around your town and take a look at the signs that catch your

eye, and try to determine the impression of the business that

sign leaves on you. This is a basic learning formula for

determining the design, size and placement of your business sign.

Some of the other things to consider before opening for business

- If you intend to employ one or more employees, you'll be

required to deduct Federal Income Taxes, and Social Security

payments from their checks. This will involve your filing for a

Federal Tax Number and necessitates contact with your local IRS

Office.

Most states have "unemployment taxes" which will have to be

deducted from the paychecks of any employees you hire. And there

are a number of states that have income taxes - disability

insurance - and any number of other taxes. Again, the best thing

to do is check with your local office of the IRS. And above all

else, don't forget to ask for the rules of the minimum wage law,

and comply.

When your business grows to the point of needing additional help,

don't be afraid to look for and hire the help you need. when

you're ready to hire someone, simply run an ad in your local

paper and/or register your needs with the local office of your

state's employment service. Businesses either grow or die, and

those that grow eventually need more people in order to continue

growing.

When that time comes, hire the additional people you need, and

your business will continue growing. If you don't, for whatever

reason, you'll find yourself married to your business and your

business growth stymied.

Regardless of how small your business is when you begin, never

walk in with the thought in mind that it's something to keep you

busy. Anyone with an attitude of that kind is a fool. You begin

and make a business successful in order to realize financial

freedom. Establish your business. Put it on its feet, and then

hire other people to do the work for you. And those businesses

that require an operations manager, or someone to run a phase of

the business you're too busy to handle, hire the person needed or

the business will surely suffer.

To protect the investment of your business, you need business

insurance. If you've never had any experience with business

insurance, simply look under the heading of "business insurance"

in your phone directory. Ask for bids from several different

companies or agents...Primarily, you should have a policy that

gives you general liability, fire, workmen's compensation,

business interruption, and vehicle coverage. You amy also want

coverage against possible losses related to burglary, robbery,

Life & Accident, Key Man, and Fidelity Bonds.

As the sole proprietor of a business, you won't be paid as an

employee, so there will be no income tax deducted from whatever

you

withdraw from the company's earnings. What you'll have to do is

a gain check with the IRS Office for a Tax Guide For Small

Businesses Handbook, and probably end up filing an estimated tax

return on a quarterly basis.

The minute you open your doors for business, you'll have to spend

some time engaged in the work of bookkeeping. Exactly how, and

using what forms, you keep books, should be on the

recommendations of a good tax counselor...The same holds true for

your overall business and/or payroll accounting system. Look for

an experienced CPA that knows the accounting problems to your

particular kind of business, and solicit his advise/counseling.

If your business is going to involve the possible purchase or

lease of operating equipment, again seek the help of your tax

counselor for the most advantageous method of obtaining the

needed equipment.

Basically, arranging for your suppliers to give you materials on

credit will depend upon your honesty and personal financial

statement. The best way is usually a personal visit to the

person with the power to approve or disapprove of credit at the

company where you want to set up a credit account. Show him your

financial statement, and explain your prospects for success.

Then assure him that you've always honored all of your

obligations, and that if ever there's a question or problem,

you'd like for him to call you at home. And of course, give him

your home phone number.

We won't go into the exigencies of advertising your products,

services or business here, but there is something along these

lines you should always keep in mind. The best kind of

advertising your business can receive is that you don't really

pay for - publicity.

When something unusual happens to you, your business, or your

employees - that's news, so be sure to tell the news media in

your area about it.

In closing, let me say that the most important ingredient of your

eventual success will be the soundness of the planning you did

before you started your business. Any number of bad things can

really throw your business into a tailspin, but it you've done

your homework well - really set up a detailed business plan

before starting - your losses or setbacks will be minimal.

Success takes planning, and within this report, you've got a

basic checklist...The rest is up to you...Good luck, and may your

life overflow with success in all that you undertake from this