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