Small Business Forum

I've Moved!

2006-05-19T04:10:00.000-07:00

I've neglected this blog for such a long time because, to be honest, I really don't care for blogger so much.

You can find the small business assistance blog here.

Charter One ranked first in overall number of loans for small business

2005-10-23T21:34:00.000-07:00

Charter One Bank today announced it was
named the No. 1 small business lender in Michigan and the Midwest by the U.S.
Small Business Administration (SBA).
   During the annual SBA fiscal year from October 1, 2004 to September 30,
2005, Charter One Bank provided 955 loans, valued at $53.9 million, to small
businesses in Michigan -- giving the bank a commanding 524-loan lead over its
nearest competitor.
   Fiscal year 2005 marks the first time Charter One Bank has become the
leader in SBA lending. Charter One enhanced its focus on small business
lending to better serve the needs of its customers. Charter One was acquired
last September by Citizens Financial Group, Inc., the No. 1 SBA lender in the
New England and Mid-Atlantic regions and the No. 2 SBA lender in the country.
   "We want Michigan to know that we care about the needs of small business,"
said Sandra Pierce, President and CEO of Charter One Bank, Michigan. "We
believe small business owners want to deal with a lender that provides
personal service and understands their needs. We are committed, as indicated
by SBA's top ranking, to making credit available to help small businesses grow
and succeed."
   David Farmer, owner of Oakland Steel Inc. in Troy, Michigan, was able to
secure an SBA loan from Charter One, and in the process made his dream of
owning a company a reality.
   "I've worked in the steel distribution business for over 20 years and
learned what was needed to be successful, but I needed access to capital. If
it wasn't for the SBA and Charter One, I would not be in business today. I
obtained a term loan and line of credit that enabled me to pay off my initial
investment in the company while diversifying my customer base and the services
we provide," said Farmer.
   Oakland Steel, Inc. caters to the small business market by stocking and
distributing smaller quantities of steel purchased directly from steel mills.
"We've kept many machine shops running with emergency deliveries of steel on a
Saturday or in the evening. Service is everything," explains Farmer.
   Today Oakland Steel is thriving, having quadrupled its sales in just under
a year with plans to expand its workforce further.
   "Charter One Bank has demonstrated its commitment and understanding of the
smaller end of the market, those entrepreneurs needing $50,000 or less in
capital," said Richard Temkin, District Director of the SBA's Michigan office.
"This market has historically had difficulty obtaining access to capital. We
applaud Charter One for helping a record number of small business owners
realize their dreams over the past 12 months, and we look forward to their
continued support of the small business community."
   Since September 2004, Charter One has established an aggressive small
business initiative that includes:

   *  The addition of 40 new business banking officers and relationship
      managers dedicated to the small business initiative
   *  A more streamlined process for small business loan applications with
      fewer forms and a simpler approval process
   *  A comprehensive marketing program to educate small business owners
      about the products and services available
   *  Extensive training for all business bankers, underwriters, and retail
      branch staff

U.S. Cellular Gearing Up to Serve Small Businesses

2005-10-23T21:30:00.000-07:00

Four out of five small
businesses now use cell phones, and three-quarters of those find cell phones
essential or important to their operations, according to a National Federation
of Independent Business survey. But with the demands of small businesses often
exceeding the traditional "nine-to-five" workday, small businesses need
service on their own terms. To give small businesses the individual attention
they require and to provide them with cellular solutions that are specific to
their business, U.S. Cellular has created a team of experts and solutions
tailored to the small business client.
   "Small businesses aren't like other customers. They shouldn't be treated
like large corporations or lumped in with traditional consumer customers,"
said Sherry Davenport, director of segment marketing for U.S. Cellular. "U.S.
Cellular has developed and trained a team that will provide small business
owners and managers with convenient, individualized attention whether they
choose to visit a store or call our toll-free number."
   U.S. Cellular began the development of its small business team by training
more than 6,000 existing associates specifically to assist small business
clients in both their sales and customer care needs. This team will work with
owners to conduct a business-specific needs analysis and educate them about
the specific services that U.S. Cellular has developed for small businesses,
including versatile payment options, business calling plans, easy repair and
replacement options, and business-specific data service applications through
the company's easyedge(SM) service. In addition, U.S. Cellular will offer
customized account set up options, including scheduled appointments for
activating all employee lines and training to ensure that employees get the
most out of their plans and phone features.
   The company also developed a special small business toll-free number so
that owners and their employees are not spending precious work hours waiting
to speak with a customer service representative. Their needs will be promptly
addressed by the team dedicated to them.
   "Training existing employees and creating dedicated business wireless
plans were only the first steps taken to create our small business expertise,"
said Davenport. "U.S. Cellular also needed to ensure the cellular experience
would be convenient for owners throughout the entire process, and we
implemented additional services to make this happen."
   Training 500 subject matter experts to be part of the company's small
business team is just one of these additional services. The subject matter
experts offer in-store analysis of and solutions to the different needs of all
kinds of small businesses. By conducting a Wireless Needs Analysis, U.S.
Cellular small business experts will identify the services that are right for
each business. Experts will closely work with owners to analyze their needs,
and then provide recommendations on the best wireless plans, services and
equipment. They will then provide every small business with a written proposal
outlining their recommendation.
   And, because U.S. Cellular understands that the wireless decision is an
important one and may take time, the company has developed a personalized set-
up program allowing owners the opportunity to schedule appointments with a
small business representative to activate their wireless service once a
decision has been finalized. To save owners additional time, they also are
able to schedule individual dates and times for each employee to pickup and
activate their own cell phones.
   "In our conversations with small business owners, we found that they need
different decision making time tables and strategies for service, and we've
changed the way we operate to best serve their needs," said Davenport.
   U.S. Cellular developed its small business expertise, customized service
solutions and business specific plans based on bi-annual research and focus
groups conducted by the company, as well as its 20 years of experience.
Small businesses will receive the same exemplary service for which U.S.
Cellular is known. The company leads the industry in customer loyalty and
receives the lowest percentage of customer complaints, which can be attributed
to its five Customer Care Centers located throughout the U.S.

Public Policy Climates for Small Business and Entrepreneurship

2005-10-13T00:11:00.000-07:00

Today, the Small Business & Entrepreneurship Council (SBE Council) released its tenth annual rankings of
the states according to their respective public policy climates for small
business and entrepreneurship in the "Small Business Survival Index 2005."
  According to SBE Council chief economist Raymond J. Keating, author of the
study, "The 'Small Business Survival Index' aims to gauge, state by state,
whether public policies help or hurt the entrepreneurial sector of our
economy, which of course is so important for economic growth, innovation and
job creation."
  SBE Council CEO and President Karen Kerrigan added, "Are elected officials
and policymakers living up to their rhetoric about how much they support and
appreciate small business owners?  That's the question to be answered, and we
seek to do so with the 'Small Business Survival Index' each year."
  The "Small Business Survival Index" for 2005 has been revised and
expanded, including the addition of four measures of health care regulation.
Kerrigan noted: "Health care costs are a heavy burden on small businesses, and
those costs most assuredly are affected by government regulations and
mandates."
  The Index now analyzes 26 major government-imposed or government-related
costs affecting small businesses and entrepreneurs, including an assortment of
taxes and measures that reflect various regulatory costs.  These government-
imposed or government-related costs are added together to compute an overall
rating.  The entire report is available at http://www.sbecouncil.org.
  Keating notes: "The 'Small Business Survival Index' allows states to be
compared in terms of their tax burdens and many of their regulatory costs.  As
explained in the study, economic common sense, backed up by a large body of
economic literature, makes clear that these policies matter a great deal to
entrepreneurs, businesses, employees and overall economic health."
  In terms of their policy environments, the most entrepreneur-friendly
states under the "Small Business Survival Index 2005" are: 1) South Dakota, 2)
Nevada, 3) Wyoming, 4) Washington, 5) Michigan, 6) Florida, 7) Mississippi, 8)
Alabama, 9) Indiana, 10) Colorado, 11) Texas, 12) South Carolina, 13)
Virginia, 14) Pennsylvania, and 15) Tennessee.  In contrast, the most anti-
entrepreneur policy environments are offered by the following: 37) Oregon, 38)
Montana, 39) North Carolina, 40) Ohio, 41) Iowa, 42) Massachusetts, 43)
Vermont, 44) New York, 45) New Jersey, 46) Hawaii, 47) Minnesota, 48) Rhode
Island, 49) Maine, 50) California and 51) District of Columbia.  Complete
rankings are found below.
  Keating added: "Obviously, there are virtually infinite factors impacting
economic decision-making. Does the 'Small Business Survival Index' tell us
something valuable about the economy?  Very much so.  In addition to the
various studies cited in the report noting how the various measures included
in the Index impact the economy, it's also worth noting some other facts.  For
example, from 2000 to 2004, the 25 best ranked states on the Index experienced
population growth that was 56% faster than the worst 25 states plus the
District of Columbia. Equally interesting is net domestic or internal
migration, that is, movement of people between the states.  From 2000 to 2004,
the top 25 states on the Small Business Survival Index netted a 1.64 million
increase in population at the expense of the bottom 25 states plus the
District.  For good measure, employment growth was much faster among the top
25 states versus the bottom 25 plus D.C."
  For a copy of the "Small Business Survival Index 2005," visit SBE
Council's website at http://www.sbecouncil.org.  SBE Council is a national
nonpartisan, nonprofit small business advocacy group headquartered in
Washington, D.C.
  Following are the complete state rankings for the "Small Business Survival
Index 2005":

            Small Business Survival Index 2005: State Rankings

  Rank               State                   SBSI

   1               South Dakota             24.280
   2               Nevada                   27.080
   3               Wyoming                  33.360
   4               Washington               37.430
   5               Michigan                 37.490
   6               Florida                  38.525
   7               Mississippi              38.970
   8               Alabama                  39.465
   9               Indiana                  40.140
   10              Colorado                 41.190
   11              Texas                    41.210
   12              South Carolina           41.790
   13              Virginia                 41.885
   14              Pennsylvania             42.261
   15              Tennessee                43.090
   16              Arkansas                 43.832
   17              Arizona                  44.238
   18              Missouri                 44.976
   19              Idaho                    45.020
   20              New Hampshire            45.030
   21              Alaska                   45.140
   22              Georgia                  45.555
   23              Illinois                 45.730
   24              Delaware                 45.830
   25              Maryland                 46.445
   26              North Dakota             46.690
   27              Wisconsin                47.539
   28              Kentucky                 47.605
   29              Oklahoma                 48.110
   30              Utah                     48.515
   31              Kansas                   50.000
   32              Nebraska                 50.493
   33              New Mexico               50.620
   34              West Virginia            50.805
   35              Louisiana                51.550
   36              Connecticut              51.830
   37              Oregon                   52.980
   38              Montana                  53.448
   39              North Carolina           53.851
   40              Ohio                     54.210
   41              Iowa                     54.317
   42              Massachusetts            54.765
   43              Vermont                  56.720
   44              New York                 58.191
   45              New Jersey               58.905
   46              Hawaii                   60.300
   47              Minnesota                60.360
   48              Rhode Island             60.390
   49              Maine                    61.069
   50              California               62.520
   51              Dist. of Columbia        73.330

Getting Tax ID Numbers for Your Small Business

2005-10-12T19:51:00.000-07:00

It doesn't matter is your business is a sole proprietorship with employees, a partnership, a limited liability company or a corporation, you must get a federal Employer Identification Number (EIN). This number is required for all correspondance with the IRS, including tax forms.

How Do I Get a Tax ID Number (EIN)

This is about the easiest thing you will have to do concerning the IRS. Send IRS Form SS-4, Application for Employer Identification Number, to the IRS address in the instructions to the form. The form is available on the IRS's website at www.irs.gov or at all IRS and Social Security offices. There's no excuse for not getting one as there is no charge to get an EIN.

If you're reading this, you must have internet access. Use it. Request your SS-4 form online.

Two ways to apply for an EIN

If you apply for your EIN by mail, it can take several weeks to process your application. In the event you need to file something before you recieve your number, don't panic. Wimply write 'applied for' the form in the space for the EIN.

In order to expedite the process, call the IRS at 866-816-2065 and request a tax id over the phone. The trick here is, you need to fill out the form first. The representative will ask you to read your answers over the phone. You will then mail the filled-out SS-4 form to the IRS.

Different entities and multiple businesses require their own EINs

If you have more than one business, you will need a different EIN for each one.

Also, if you create a new entity you must get a new EIN. For example, if you form a limited liability company from what was a soleproprietorship you will need to apply for a new EIN.

The US Economy Is Still Being Driven by Small Businesses

2005-10-10T23:44:00.001-07:00

Newly released statistics from the small business administration shows that
America's small businesses continue to drive the economy. The survey, released
early October compiles the most recent and important small
business statistics in a useful and easily understood document.
 "The 2005 Small Business FAQ is a great resource for small business
people, policymakers, and anyone interested in how small business drives our
economy," said Dr. Chad Moutray, Chief Economist for the Office of Advocacy.
He added, "These statistics paint a compelling picture of just how important
small business is to America.  They show that small businesses are America's
job-creators, innovators, and the path to mainstream economic activity for all
segments of our society."
 Small business statistics highlighted in the 2005 Small Business FAQ
include:

 * Small businesses represent 99.7 percent of all employer firms.
 * Over the past decade, small business net job creation fluctuated between
   60 and 80 percent.
 * Small businesses generate more than 50 percent of the nonfarm private
   gross domestic product (GDP).
 * Two-thirds of new employer establishments survive at least two years
   after start-up, and 44 percent survive at least four years.
 * Small businesses employ half of all private sector employees.
 * Very small firms with fewer than 20 employees spend 45 percent more per
   employee than the largest firms to comply with federal regulations.
 * Minorities own 4.1 million firms that generate $694.1 billion in
   revenues and employ 4.8 million workers.
 * Women own 6.5 million businesses that generate $950.6 billion in
   revenues, and employ 7.2 million workers.
 * In 2004, an estimated 580,900 employer firms opened while an estimated
   576,200 closed.

Limited Liability Company Tax Rules

2005-10-03T19:19:00.000-07:00

Just like sole proprietorships or partnerships you must report your income to the IRS. An LLC is not a separate tax entity like a corporation. The IRS considers Limited Liability Company a ‘pass through entity." Earnings are taxed only once. Profits and losses of the LLC ‘pass through’ the business to the LLC owners. Owners (members) must then report this information on their personal tax returns. The good news is the LLC itself does not pay federal income taxes. But some states do charge LLCs an annual state tax.

The number of members in your limited liability company determines how it is taxed by the IRS.

If you are the sole owner of your LLC then the IRS taxes you much the same as it would a sole proprietorship. All profits and losses must be reported on your 1040 tax return (on the Schedule C attachment). You can not avoid taxes by leaving your money in the LLC’s bank account. All profits in the LLC’s accounts must be reported.

If there is more than one member of your LLC the IRS taxes you much the same as it would a partnership. Again the LLC itself does not pay tax on profits. Individual members must report their share of profits on Schedule E and attach it to their 1040 form. Each member pays taxes on their distributive share of company profits, as stated in the LLC operating agreement. Again, the LLC itself is not taxed by the IRS although there may be an annual state tax, depending on which state you are in.

Although the IRS does not tax LLCs, California levies an annual minimun franchise tax of $800.00, they expect this payment within three months of forming your LLC and kindly send you a bill so you don't forget. Wyoming levies an annual State tax on of $100.00; California requires an annual List of Officers or Members filing, fee of $100.00; Delaware levies an annual franchise tax of $30.00.

This and more information you can use about incorporating a business available at small business assistance

New Study Shows Small Businesses Bear Largest Per Employee Burden

2005-09-27T03:30:00.000-07:00

America's smallest firms bear the largest per employee burden of federal regulatory compliance costs, according to a study released U.S. Small Business Administration. It just gets harder and harder for small businesses to compete.

Firms with fewer than 20 employees annually spend $7,647 per employee to comply with federal regulations, compared with the $5,282 spent by firms with more than 500 employees. The report measures disproportionate regulatory compliance impact on small business.

The study finds that small business faces a 45 percent greater burden than their larger business counterparts. The report thoroughly analyzes compliance costs for economic, workplace, environmental, and tax regulations. It details regulatory costs for five major sectors of the U.S. economy: manufacturing, trade (wholesale and retail), services, health care, and other (a residual category), revealing that the disproportionate cost burden on small firms is particularly stark for the manufacturing sector. The compliance cost per employee for small manufacturers is at least double the compliance cost for medium-sized and large firms.

Among its other findings, the report also shows that the annual cost of federal regulations in the United States totaled $1.1 trillion in 2004.

The basics of workers compensation insurance

2005-09-27T03:22:00.000-07:00

The thing most small businesses most commonly overlook about workers comp insurance is this: they need it. Unless you're in Texas , that is. The other 49 require small employers to cover their employees' lost wages and/or medical expenses in case they're hurt on the job.

Different states have different coverage requirements and mandate what percentage of an employee's salary must be paid in the case of work related injury. Also, some states allow small businesses of a specified size to self-insure their workers comp. This means that if a small business is small enough it may legally opt to pay for claims directly out of pocket. So if you've only got a handful of employees it might not be necessary to actually purchase a policy from an insurance company.

The confusion doesn't stop there. Some states don't require coverage for certain types of employees. Often the owner of the business doesn't need coverage as well as, unpaid volunteers and domestic employees.

Variation in Small Business Workers Comp Policies

Although there is a lot of variation from state to state, workers comp packages are fairly standardized from state to state. Nearly all basic packages cover: medical treatment, lost-wages and rehabilitation. Liability coverage is also fairly common and protects the policy holder from those pesky ambulance chasers.

What Options are Available to Small Businesses in Search of a Workers Comp Policy?

Surprise again, things are going to get a bit more complicated. Each state has a regulatory body that monitors workers compensation insurance. Most are regulated by the National Council on Compensation Insurance. Others have state-specific organizations that serve the same purpose. N. Dakota , Ohio , Washington , W. Virginia and Wyoming deliver workers compensation insurance through a monopolistic state fund.

If you find yourself in one of the five states with a single fund you're finished shopping for a carrier. You will however need to purchase your employer liability insurance through a separate commercial insurer.

If you find yourself in one of the other 45, you usually have a choice among the nation’s largest insurers. Liberty Mutual, Travelers, Kemper and The Hartford are the most common.

If the big name insurers don't get your fancy then you may still have two more options: self insurance, as mentioned earlier, and state insurance pools. State pools usually attract the companies that are too risky for big name insurers. This is typically a last resort option for companies that can't get coverage anywhere else.

Nearly all of the states, 47, have the option of self-insuring. This option however requires the employer to assume all risk for work related injuries.

More small business insurance information you can use available at small-business-assistance.com

Steps Small Businesses Should Take to Recover from Hurricane Katrina

2005-09-27T03:15:00.000-07:00

There are a handful of small steps small business owners should take to recover from disasters
like Hurricanes Katrina, Ophelia or any other major disaster, according to the Institute for Business
& Home Safety (IBHS).

Most importantly, put safety first. The safety of people and property are key considerations following
a disaster. Buildings need to be safe before employees and customers can re-enter. Report downed
power lines or gas leaks as soon aspossible.

If you own a building, have it inspected by structural engineers or contractors to determine its safety
and the extent of the damage. If you do not own the building your business occupies, work with the
owner to have it inspected. Despite only being the renter, you are responsible for the safety of anyone
on your businesses' premises. If the building is unstable, find an alternative location to work from.

Report the loss. Call your small business insurance agent as soon as possible. Meet your insurance
company half way and provide a general description of the damage and have your policy number handy.

Assess damages. Note damages caused to the structure, equipment and property, including inventory
and raw materials.

Make repairs. Avoid additional property damage by making temporary repairs to the building, boarding
up windows, or covering holes in the roof. You may also want to partition the building if some areas are
not usable.

Clean up. Your insurance company may tell you to hire a professional cleaning service. If you or your
employees are involved in this effort, use proper eyewear, gloves, hardhats and masks. Sanitation
systems within the facility should be repaired immediately.

Business owners who need to create business continuity and disaster plans, whether impacted by a
hurricane or not, can use Open for Business(sm), a new toolkit offered by IBHS to help organize critical
information, records and resources.

More small business insurance and other information you can use
available at small-business-assistance

The older the company, the better the benefits

2005-09-27T03:11:00.000-07:00

In a study recently published by the SBA's office of advocacy on the costs of benefits in small and large businesses, Joel Popkin and Company confirmed the fact that small business employees have less access to benefits than employers of larger firms, however the reasons for coverage may surprise you.

The study found that the age of a firm had as much to do with wether or not they provided employee benefits or not. In a striking contrast they noticed that in 2002 less than 60 percent of employees recieved benefits whereas in firms in operation of 20 plus years that percentage rose to over 95 percent. The findings prove one of two things: small business owners really do intend to offer benefits once they become more financially stable or companies that don't take care of their employees don't stay around for very long.

A Comparison of Small Business Hosting Solutions From Yahoo and Independant Hosting Companies

2005-09-08T17:57:00.000-07:00

Yahoo and Hewlet Packard's hosting services for small business

It was about three years ago that Yahoo and Hewlet Packard entered the battle against established solution providers for small business sized web hosting services. They've been kicking butt ever since.

The initial offering by Yahoo really surprised their competitors because of its enormous marketing push. It seems that the established small business web hosting solution providers were too confident their established partnerships sould hold.

What type of hosting solutions does Yahoo offer for small business sized problems?

Their offerings center on three web hosting solutions for small business owners with less than 100 employees. The first and least expensive starter package begins at around 12 dollars a month with a one time setup fee of 25 dollars. Like most similar plans the service includes a domain name, 25 email addresses and web design tools. A hefty 2 GB of disk space and 25 GB of bandwidth per month. There's also paypal buttons so you can accept donations or sell products and recieve the money in a paypal account.

The more expensive standard and professional packages offer more storage and features like perl scripting, PHP and MySQL support. These services both require a 25 dollar set up fee and and run at about twenty or forty dollars a month, respectively.

What kind of solutions are other hosting providers offering for small business websites?

The major drawback to Yahoo's offering was the sheer size of the internet giant. Customers shelling out hundreds of dollars a year for hosting solutions want to be sure that when there's a problem, and there's always problems, their service provider will be able to fix it, quickly. Yahoos competitors know this and they have been using it to their advantage for the last three years.

One-world hosting offers a lot for a little. At 15 dollars a month and a 15 dollar setup fee it's standard plan is less espensive than Yahoo's but it offers less than a GB of disk space. They do however offer a very easy setup and responsive servers. Most importantly they offer top notch telophone service with a live human being capable of answering your questions correctly.

It's this human factor that seems to set the smaller independent hosts apart from the giants like HP and Yahoo.

More small business information that you can use available at small-business-assistance

Life Insurance Company Introduces Its Small Business Portfolio

2005-06-09T18:48:00.000-07:00

CHICAGO, June 9 Fort Dearborn Life Insurance Company (FDL), a subsidiary of Health Care Service Corporation (HCSC), a Mutual Legal Reserve Company, introduces an innovative approach to fill the needs of small businesses. The FOCUS on Small Business portfolio provides small businesses with a broad range of group benefits that are affordable, easy to implement and simple to maintain.

FOCUS on Small Business is a portfolio of group life, short- and long-term disability insurance plans designed specifically for business with two to nine employees. These standardized programs historically have been the most popular programs for group life and disability benefits in the small business market. The employer works with their broker to make a few simple choices concerning maximum coverage amounts and elimination / benefit periods to implement a flexible program on an employer-paid or voluntary basis.

Fort Dearborn Life has also made the program quick and simple for their brokers. Through the utilization of FDL's Web-based quoting system, QuoteWeb, brokers can generate quotes, customize employer participation agreements and dramatically reduce the amount of paperwork involved in the sales process. The overall result is a more effective process from time of quote to policy implementation.

Brad Gary, Vice President and Chief Marketing Officer of Fort Dearborn Life Group Benefits Operations stated, "Our research found that small business owners want to provide benefit offerings that mirror larger companies but are often consumed with running their own business." Gary continued, "FOCUS on Small Business will help these employers offer benefits that are easy to purchase and implement. QuoteWeb will make it easy for benefit brokers to quote and sell business, and will create a minimal amount of paperwork and strain on everyone's budget and time."

With more than 35 years experience in group benefits, Fort Dearborn Life is among the country's leading providers of group life insurance programs. Fort Dearborn Life markets group term life, short- and long-term disability, group dental and individual annuity programs. Fort Dearborn Life is rated "A" (Excellent) by the A.M. Best Company for financial strength, operating performance and market profile and is rated "A" (Strong) by Standard and Poor's for financial strength in their most recent reports.

For more information, please visit Fort Dearborn Life at http://www.fdl-life.com/ or contact us at 1-800-331-0512.

For more information about small business insurance and other topics relevant to the self-employed visit: small business assistance

When Is a Small Business Too Big?

2005-06-09T18:41:00.000-07:00

When is a firm too big to be considered a "small business"? This is what the Small Business Administration wants to know as it seeks public input in June during nationwide hearings on size standards. For Region IX which includes California, Nevada, Arizona, Hawaii and Guam, hearings to gather input and suggestions from small businesses on what size standards ought to look like will be held June 28 in San Francisco and June 29 in Los Angeles.

SBA and other federal government agencies use size standards to determine the size limits on what a small business is. In general, a business is defined as small if it's an independent company having fewer than 500 employees, though size standards vary by industry. The agency wants to update the regulations, streamline them and make them simpler for people to use. SBA also wants to gather opinions on how it should approach the rules on the participation of businesses majority-owned by venture capital companies in the federal government's small business research and development program.

On June 28 from 8:30 a.m. to 5:30 p.m., a hearing will be held at SBA's San Francisco District Office, 455 Market Street, 6th Floor, in San Francisco. On June 29 from 8:30 a.m. to 5:30 p.m., another hearing will be held at the Los Angeles District Office, 330 North Brand Blvd., Suite 1200, in Glendale.

Persons who wish to testify or attend one of the hearings should send an e-mail to the Office of Size Standards at: hearings.sizestandards@sba.gov. They should include their name, title, organization, affiliation, address, phone and fax numbers, and whether they wish to testify or not. Registration should be done at least five days in advance of the hearing. SBA will confirm the registration in writing.

For more small business related information visit: Small Business Assistance

Bush Pushes Small Business Health Care Reform

2005-06-08T23:44:00.000-07:00

Bush Pushes Small Business Health Care Reform

In a speech today in Texas, Bush again pushed his two main plans for lowering outrageous health care costs for small business owners. Over 44 million Americans are without health care and more than half of them are employees or operators of small businesses.

The first cost reduction strategy that Bush is supporting are the formation of health savings accounts. The upside of health savings accounts is they will take some burden off the employer.

What concerns me most about the HSAs is: Where is this money going to come from?

NO answer from Mr. President. NO straight answer from anybody, really.

Where is the money going to go?

That one’s easy. It’s going to Wall Street probably right next door to your future Social Security Fund if a number of bankers and brokerage houses get their way. Bush didn’t support the two most expensive campaigns in history with money from his own HSA. I suggest you “Take a look at it,” as our commander in chief likes to say.

The second scheme for reducing small business health care costs are association health plans, or AHPs. In case you’re not already familiar with this health care cost reduction strategy it allows “small businesses to pool risk across jurisdictional boundries.”

It’s real interesting this one because he’s spot on. It’s the crossing of jurisdictional boundries that’s going to lower the costs. Over the last couple decades thousands of local and state mandates have sent the health care requirements skyrocketing. Unfortunately some of those mandates include, for example, coverage of medical equipment and supplies like insulin for diabetics.

If your small business associates with another one in a region with few requirements, odds are your coverage requirements will be a lot less stringent as well. Which is fine, so long as you don’t have diabetes and never develop an ongoing medical condition.

Thank you White House for once again finding cheap fixes to serious issues, and kudos for managing to line supporter’s pockets while you’re at it.

Finding a viable home based business opportunity

2005-06-07T19:09:00.000-07:00

About five years ago I started looking for a legitimate home based business opportunity. I poured over website after website looking for something that wasn't an obvious ploy to designed to rip off cash from gullible would be entrepreneurs. Hopefully, I can give a little advice about how to find way to make a few bucks at home without spending too much up front.

I spent years working for a bricks and mortar business and the thought of getting paid to do the same thing out of the comfort of my own home really appealed to me. The number of over hyped turnkey type operations that claim thousands of dollars for a few minutes work per day were an instant turn off. If your looking for a small business that you can start from home, outrageous claims should raise instant red flags. Any "opportunity" that claims you can get something for nothing should be avoided like the plague.

Besides the obvious claims of instant fortunes after you buy their secret there are some other filters that you should apply to any prospective work at home opportunities. Here are a few questions that you should be able to answer yes to before making a decision in any direction.

Does the company mention how long it has been in business? If so, can they back it up with any proof? A quick check with the BBB (better business bureau) closest to the company's listed address should clear that up real quick.

Is there any system of support? How interested in your success will they be after you hand over a few bucks? Any reputable organization will have some pre determined system for dealing with beginners.

Also of utmost importance when choosing a business opportunity is the fact that most business don't realize a profit for at least six months, often a year or two. Any claims that you'll be receiving big fat checks in the mail after a few days is a signal to close your wallet and run. It takes a lot of trial and error to find out what works and what doesn't. The great thing about a home based business is that you aren't going to spend a lot of money commuting back and forth from an office while you're waiting to realize a profit!

Self Directed Health Care Plans For Small Business

2005-06-04T21:30:00.000-07:00

The PacifiCare Signature Freedom(SM) Self Directed Health Plan Expands Nationwide

- The PacifiCare Signature Freedom Plan, Offered by American Medical Security, Provides 'Self Directed' Accounts That Cover Personal Health Care Expenses

- Unused Account Dollars May Be Rolled Over to Help Consumers Save for Future Health-Care Expenses

CYPRESS, Calif., June 1 /PRNewswire-FirstCall/ -- Committed to providing a variety of innovative "consumer-driven" health plans that provide consumers more choice, flexibility and affordability in the face of rising health care costs, PacifiCare Health Systems Inc. received approval to expand its SignatureFreedom Self Directed Health Plan to small businesses in 16 states nationwide.

The states include Wisconsin, Michigan, Pennsylvania, Virginia, Missouri, Ohio, Illinois, Nebraska, Iowa, South Dakota, Tennessee, Arkansas, West Virginia, Kansas, North Carolina and South Carolina.

The PacifiCare SignatureFreedom plan offers enrollees a Self Directed Account from which they pay for covered health-care expenses -- along with a PacifiCare Preferred Provider Organization (PPO) health plan.

The plan was designed to empower health-care consumers with greater independence and choice by allowing control of individual Self Directed Accounts as "personal" health care funds. The Self Directed Account is built into the product and requires no additional funding by the employer. Employees can use the money from the Self Directed Accounts to pay for eligible health-care expenses until the account is exhausted. Unused dollars are rolled over from year to year.

In just over a year since the product was launched in a limited number of markets, the PacifiCare SignatureFreedom Self Directed Health Plan has attracted more than 5,000 employers in eight states, serving 85,000 members.

"We've listened to small-business customers who told us they want their employees to have the kind of flexibility, choice and control in how they allocate and spend their health care dollars that employees with large companies have," said Brad Bowlus, chief executive officer of PacifiCare's Health Plans division. "Based on the incredible response to this fast-moving product, we are excited about the opportunity to expand the SignatureFreedom Self Directed Health Plan to small businesses nationwide."

Small Group Self Directed Health Plan enrollees have complete access to their claims history and Self Directed Account balances through the member portal at www.eAMS.com, including prescription drug claims. Enrollees may also access cost guides for prescription drug expenses and will soon have access to guides for hospital and physician expense.

Small employers interested in learning more about PacifiCare's SignatureFreedom Self Directed Health Plan can visit www.eAMS.com

"We've found that nearly 90 percent of the small businesses that chose our Self Directed Health Plans are first-time PacifiCare customers," Bowlus added.

"In addition, more than 10 percent of those employers had not previously offered health care coverage for their employees, which shows that PacifiCare

is making a positive impact in making health care coverage more affordable for businesses and consumers.

"With our recent acquisitions of American Medical Security Group and Pacific Life's group health operations, PacifiCare has expanded its product offerings and commercial presence nationwide. In the coming months, we plan to introduce additional commercial and Medicare products across the country as we further enhance our presence as a national consumer health organization."

PacifiCare Health Systems is one of the nation's largest consumer health organizations with nearly 3.2 million health plan members and approximately 11.3 million specialty plan members nationwide. PacifiCare offers individuals, employers and Medicare beneficiaries a variety of consumer-driven health care and life insurance products. PacifiCare's specialty operations include behavioral health, dental and vision, and complete pharmacy benefit management through its wholly owned subsidiary, Prescription Solutions. More information on PacifiCare Health Systems is available at pacificare.com.

Source: PacifiCare Health Systems Inc.

Good News for Small Businesses that Finance with Credit Cards

2005-06-01T19:13:00.000-07:00

CIT Enters Agreement With MBNA to Offer Business Credit Card Services to CIT Customers

 LIVINGSTON, N.J., June 1 /PRNewswire-FirstCall/ -- CIT Small Business
Lending Corporation, the nation's No.1 Small Business Administration lender
for the last five years and a subsidiary of CIT Group Inc. (NYSE: CIT), today
announced that it entered into a marketing agreement with MBNA America to
provide private-label credit card services to CIT Small Business Lending
customers throughout the U.S.
   Under the agreement, MBNA will design, develop and administer the CIT card
program through the MasterCard brand name and network.  Services will be
customized to the CIT brand, and include account acquisition and
authorization, private-label card issuance, statement generation, marketing
services, remittance processing, and customer satisfaction.
   "The ability to offer a business credit card provides an important service
for our small business customers," commented John Canning, President of CIT
Small Business Lending.  "The MBNA program is a great way to help our
customers meet short-term working capital needs while giving them the ability
to better manage their business expenses."
   Customers will be able to apply for an account online, by phone, or by
fax.  Two types of accounts will be offered, both featuring low minimum
monthly payments:

   * Business Credit Card Account - no annual fee, a fixed rate
   * Business Rewards Credit Card Account - travel/merchandise reward
     enhancement with a $35 annual fee, along with a fixed rate

   Tom Hallman, Vice Chairman of CIT Specialty Finance, remarked, "We are
pleased with this strategic partnership with MBNA.  Through our business
credit card program, we look forward to building CIT brand equity and
strengthening relationships with our small business customers."

   About MBNA
   MBNA Corporation (NYSE: KRB), the largest independent credit card lender
and a recognized leader in affinity marketing, is an international financial
services company with $116.6 billion in managed loans, providing lending,
deposit, and credit insurance products and services.  More than 5,000
organizations and financial institutions worldwide endorse MBNA credit cards
and related products and services. For more information, visit the company's
web site at http://www.mbna.com .

   About CIT Small Business Lending Corporation
   CIT Small Business Lending Corporation, a business unit of CIT Specialty
Finance, offers Small Business Administration (SBA) loans to finance business
acquisitions, owner-occupied real estate purchases and franchise and medical
and professional practice start-ups through a network of field
representatives. The nation's No.1 SBA lender, CIT Small Business Lending
Corporation has been designated a "Preferred Lender" by the SBA and can
provide quick credit decisions and loan closings. The company's website and
online SBA loan application are located at http://www.smallbizlending.com .

   About CIT
   CIT Group Inc. (NYSE: CIT), a leading commercial and consumer finance
company, provides clients with financing and leasing products and advisory
services.  Founded in 1908, CIT has nearly $60 billion in assets under
management and possesses the financial resources, industry expertise and
product knowledge to serve the needs of clients across approximately 30
industries.  CIT, a Fortune 500 company and a component of the S&P 500 Index,
holds leading positions in vendor financing, factoring, equipment and
transportation financing, Small Business Administration loans, and asset-based
lending.  CIT, with its principal offices in Livingston, New Jersey and New
York City, has approximately 6,000 employees in locations throughout North
America, Europe, Latin and South America, and the Pacific Rim.  For more
information, visit http://www.cit.com .

Seminar: The Tax Advantages and Disadvantages of Incorporating a Small Business

2005-06-01T19:03:00.000-07:00

Press release from Comerica

Small Businesses Learn More About Business Entity Choices at Comerica Seminar

DETROIT, June 1 /PRNewswire/ -- Small business owners will learn about the types of business entities -- such as sole proprietorships, partnerships, limited liability companies and corporations -- to determine if they've chosen the right one when Comerica Bank hosts a small business workshop on business entity choices and asset protection on Thursday, June 9, from 8:30 a.m. to 11:30 a.m. at Comerica's Southfield Tower, located at 29201 Telegraph Road in Southfield, Mich. A pre-workshop continental breakfast will begin at 8 a.m.

The seminar is part of a comprehensive series of workshops sponsored by Comerica that are designed to help small business owners succeed.

John Maddox of Maddox and Ungar, PLLC and Donna DeGennaro of Comerica Insurance Services will discuss the tax and non-tax advantages and disadvantages of the business entity choices; examine examples of those choices and how they apply to various businesses; compare the issues faced by each type of business entity; and provide tips on how to protect the business owner's personal assets.

Cost for the workshop is $50 for Comerica customers and $75 for non- Comerica customers and $25 for each additional participant from the same company. Reservations are required and can be made by calling 1-800-829-5214 or by visiting http://www.comerica.com and clicking on "Small Business Workshops."

Comerica Bank is a subsidiary of Comerica Incorporated, a financial services company headquartered in Detroit and strategically aligned into the Business Bank, Small Business & Personal Financial Services, and Wealth & Institutional Management. Comerica focuses on relationships, and helping businesses and people be successful. Comerica reported total assets of $53.5 billion at March 31, 2005. To receive e-mail alerts of breaking Comerica news, go to http://www.comerica.com/newsalerts .

Not Enough BOPs or Small Business Owner Policies

2005-06-01T18:13:00.000-07:00

It's a fact many small businesses carry too little insurance.

The gaps in most insurance coverage for the self employed is staggering. A natural disaster would be enough to wipe out a signifigant percentage of small bueinesses around the country.

A recent indepentant survey conducted by trusted choice shows that many small business owners have inadequate small business-interrruption coverage. The survey also points to ignorance about the available protection as a possible reason for the nationwide lack of coverage.

The gaps most noted by the survey were in the area known as "business-interruption" protection. In a nutshell, business-interruption insurance pays for lost income in the event that a business has to shut down due to a covered loss. It also pays for operating expenses that continue in the event of a temporary halt. Expenses such as rent and salaries are the most common. An estimated seventy-five percent of small businesses would not be able to cover their income losses or pay continuing expenses in the event of an earthquake or fire. They would most likely just have to close up shop and have to start all over again.

When you consider that more than 40 million Americans are employed by small businesses, there's a frightening number of employees out there that are severely underprotected.

Standard small business insurance more commonly called business owner's policies, or BOP cover loss of income and extra expenses for 12 months. BOPs often provide 60 days of coverage for ordinary payroll. BOP eligibility is typically based on the type of business, size of building, and/or revenue; eligibility varies from one insurer to another, but more than half of all commercial risks are eligible.

Streamline Your Small Business Marketing Strategy

2005-05-30T23:06:00.000-07:00

Hundreds of small businesses start up each day and each day hundreds fail. If you're still around after the initial investment dries up, odds are pretty good that your customers choose you over another company.

Do you know why?

You had better find out and it might not be as simple as you think. You'll have to look past your specific industry. Are you a Dentist? If you think your unique feature is offering great dental care, think again. There are millions of Dentists and lots of them give great dental care, that's not really a unique feature that will drive customers to your business. Don't be afraid to ask a few customers why they choose you over another business. Odds are good that your location, price, beautiful dental assistant or whatever are bringing the customers back to you again and again.

Once you've found the core reason new and returning customers choose your business put at the very top of your small business marketing strategy.

Is McDonalds in the hamburger business. Not really. They're in the fast-fast, cheap-cheap business. Wendy's well thery're in the 'slightly better than McDonalds' business. If you notice they're advertising strategy focused more on comparing them to the other heavy hitters in the market.

Once you've got a solid idea about what it is that drives customers to your small business. Set up streamlined marketing strategy that addresses your main selling point. You'll save precious dollars from your dwindling bank account.

Small business insurance tip

2005-05-27T21:55:00.000-07:00

Business Owners Policies for the Self-Employed

Who needs a business owner’s policy?

Simple, anyone that runs a business from their home should have one. A comprehensive coverage homeowner’s policy will cover economic losses caused by damage or legal liability but, once a home business is discovered any economic loss that can be associated to your business is your problem. Some homeowner’s policies allow business owners to purchase a policy rider that will cover losses associated with their business. If your homeowner’s policy provider doesn’t offer this option you should consider a separate business owner’s policy.

Suppose your home office gets hit by a bolt of lightening (it happens). The loss from damage to your house, computer and loss of income amounts to 50,000. If your homeowners insurance discovers that you were running a business from that room, and if they sent an adjuster they certainly would, they have the right to refuse any coverage.

On the other hand if you were wise and purchased a business owner’s policy your entire loss would be covered, even the loss of income.

Increasingly important is bodily injury liability. If you have business visitors in your home, a business owner’s policy should cover any liability if they’re injured in any part of your home. Conversely, if you simply had a homeowner’s policy and someone was injured in your home, office or anywhere, they may refuse coverage for any liability. You don’t need to be reminded about how expensive personal injury liability can be, do you?

What about product liability?

Additional product liability coverage can often be added to a business owner’s policy for an extra fee. This covers you in case someone is injured using your product. As you are probably aware, regardless of your involvement in the manufacturing or design process. The price of this coverage can be extremely expensive, depending on the products you distribute, but is definitely worth it. I know you don’t need to be reminded about how expensive product liability can be.

What if I’m not eligible for a business owner’s policy?

Different insurance companies have different criteria for excluding businesses from their policies. If one small business insurance company turns you down, ask another. Often, companies that allow riskier businesses to purchase policies also charge higher premiums, so it definitely pays to shop around for a policy that fits your particular business.

Tax reduction strategy that the whole family can enjoy

2005-05-26T19:24:00.000-07:00

Reduce Taxes, Hire Family

By employing family members you can legally reduce their overall tax burden. Small business owners may hire their spouse, parents even children. By shifting your taxable business income out of your pocket and into your family’s, you essentially move money from higher tax rates to lower rates.

Reduce taxes by giving your children money for school

Children older than seven but under eighteen are exempt from Social Security and Unemployment Taxes on all income they receive from businesses not yet incorporated. Pay your children to perform legitimate work, and document it, then pay them regularly by check. They pay less tax for the income than you would if you kept the money in your pocket. Also, you can deduct up to $4,750 of their wages from your business. Better still, you can continue to claim them as dependants on your personal tax return.

Call your mother, and then give her a job.

Give your parents some legitimate work and pay her with before tax dollars. Instead of giving her money from your taxed personal income you can hire her to do some (legitimate) work for your business and pay her with untaxed business revenue.

You can find this tax reduction strategy and other small business articles at www.small-business-assistance.com

Nonprofit Organization Tax Exempt Status Primer

2005-05-25T23:46:00.000-07:00

“Tax Exempt” defined

Net profits of an organization free from federal and/or state income tax. Nonprofit organizations may be established by proper incorporation procedures; however they do not become automatically exempt from state taxes. In order to become completely free of income tax a nonprofit entity must receive Internal Revenue Service approval.

Different categories of tax exempt organizations

Trade associations, social clubs and advocacy organizations that frequently lobby legislators are included in IRS Sections 501(c)(4) through 501(c)(27).

Most are already familiar with Internal Revenue Code Section 501(c)(3) which includes public charities and private foundations established for religious, educational, scientific, charitable, literary, public safety, or athletic purposes. This list is by no means complete as it includes more different types of organizations year after year.

Benefits of being “tax-exempt”

Besides not having to pay taxes, being considered tax exempt under IRC Section 501(c)(3) allows donors to deduct contributions to your organization.

Tax exempt organizations are also free of state sales and property taxes; this privilege differs from state to state. Many public and private grants are available only to 501(c)(3) organizations.

Some minor benefits include discounts on Us Postal bulk mail rates and potentially higher thresholds before incurring federal and/or state unemployment tax liabilities.

Forms and fees

For IRC Section 50(c)(3) tax exempt status, an organization needs to file IRS Form 1023 with the Cincinnati Service Center of the Internal Revenue Service. The form is 28 pages long and requires additional attachments and schedules. A typical application package contains between 25-75 pages of material. A newcomer to form 1023 should set aside at least 100 hours to prepare the application.

A rejection from the IRS can be appealed. Reversing an IRS decision and gaining tax-exempt status after an initial rejection is not an easy task.

Filing fees are tiered according to gross revenue. An organization that expects to have or has had less than $40,000 in gross revenue for the first four years combined can pay a reduced fee of $150. All other organizations are required to pay a standard $500 filing fee when they apply.

Also, most states do not require a separate application and only a handful require a simple one or two page form.

In California, federal tax-exemption does not eliminate state income tax liability. The state of California requires a separate application process that’s often considered more rigorous than the IRS. State tax liability is only lifted after approval by the California Franchise Tax Board.

Find this article and more like it small-business-assistance.com

Health Insurance Tax Deductions for the Self-Employed

2005-05-24T20:33:00.000-07:00

If you are run a small business you may be able to to deduct your health insurance coverage from your taxes. For U.S. federal income tax purposes, you can deduct up to 100% of the amount you pay for medical and qualified long-term care insurance for yourself, your spouse, and dependents.

Who qualifies for a health insurance tax deduction?

You can only apply for a health insurance deduction if you were self-employed and had a net profit for the year, as reported on Schedule C, C-EZ, or F. Your health insurance plan must be established under your trade or business. The plan can cover you, your spouse and dependents, but it must be set up under your business name. If you take part in a health care plan subsidized by another employer or your spouses employer you are not eligible for the deduction.

How do you claim a small business health insurance tax deduction?

Medical insurance premiums can normally be claimed as an itemized deduction. Itemized medical expense deductions are subject to a limitation of 7.5% of adjusted gross income. But for the self-employed or small business operator, there is a special deduction that can be taken as an adjustment to income for adjusted gross income. This means you can deduct more than 7.5% of your adjusted gross income.

The instructions for Form 1040 has a worksheet to figure the tax deduction amount. Basically, the worksheet separates regular health insurance premiums from long-term care premiums which are subject to certain limitations per person.

Also, I don't usually cover SEO, but there a directory that you can submit your site to that should help your site recieve a bit more traffic. In order to be listed in their directory you must place a recriprocal link exactly like this one here: Data Recovery.

That's not so bad now, is it?

Inventory Accounting, FIFO and LIFO

2005-05-23T21:24:00.000-07:00

Valuing your inventory, LIFO and FIFO

First of all FIFO stands for: first in, first out. LIFO means: last in, first out.

The FIFO method assumes that sales are made from the items that have been longest in the inventory. This conforms to the usual business practice of trying to sell the older items first, before they become obsolete, spoiled, or out-of-fashion. The LIFO method assumes that the most recently purchased items are the ones you sold, and the oldest items are still sitting in your warehouse or on your shelf.

Now that you know what the acronyms mean you probably want to know why you would use either of them:

The IRS isn’t very fond of LIFO. Fear of upsetting the IRS should be reason enough not to use this inventory method. The reason the IRS frowns on using the LIFO method is that it shows lower profits during periods of rising prices. Lower profits of course mean less tax for your small business. The IRS goes so far to discourage this accounting practice that they require you to ask permission via Form 970.

If the prices of your product are generally going up, LIFO will match your gross income against the most expensive items in your inventory, resulting in lower net profits and a lower tax bill. If your business and inventory are constantly growing then LIFO is a strong advantage if you don’t mind dark clouds hovering over your small business, constantly threatening to rain down audits and tax inspectors.

If you’ve just started your small business and don't use LIFO to value your inventory, you may select the lower-of-cost-or-market method of inventory accounting. If you do choose this small business accounting method, you need to use it value your entire inventory. Once you use this accounting method you can't change to another method without the IRS's consent. Typically, the IRS is most concerned with year to year consistency. Inventory methods that accurately reflect your income should raise few alarms regardless of which method you use.

For more information about small business accounting and other topics visit:
www.small-business-assistance.com

Which state should your small business incorporate in?

2005-05-22T21:58:00.000-07:00

Once you've decided to incorporate your small business the next step is deciding which state to incorporate in. A common misconception is that businesses must incorporate in their state of operation. You can, in fact, incorporate in any one of the 50 states and the District of Columbia regardless of where your business currently operates.

It is perfectly acceptable to incorporate in a state other than your current area of operation, but it is not always a good idea to do so. If your company chooses to incorporate in a state outside its area of operation life becomes a little more complicated. Your business becomes a “foreign corporation” in any state outside of the state it is incorporated in. If a corporation is "transacting business" in a state other than where it is incorporated, it must register for a certificate of authority to transact business in the other state or possibly lose access to that state's courts and face fines. Registering for a certificate of authority, of course, costs money and is only one step in the process of qualifying to do business as a “foreign corporation” in another state.

There are advantages to incorporating in different states with regard to corporate laws and tax structure. Delaware is by far the most popular state for incorporation. Most of the fortune 500 companies are incorporated in Delaware .

Some of the most attractive features of incorporating in Delaware include:

Lack of corporate income tax for corporations incorporated in Delaware but not transacting business in the state.
Delaware has a separate corporate law system that uses judges appointed for their knowledge of corporate law as opposed to juries, whose knowledge of corporate law is limited at best.
Shares of stock owned by persons outside of Delaware are not subject to Delaware taxes.

For a small business deciding weather or not to incorporate in Delaware it is necessary to measure the cost of qualifying as a “foreign corporation” in the state of operation versus the amount that will be saved by incorporating a small business in Delaware . Typically it is not advantageous for small businesses to incorporate outside of their home state as even small businesses are usually required to pay corporate taxes in both the state of foreign operation and the state of incorporation.

Incorporating a small business: S corporations and C corporations

2005-05-22T21:54:00.000-07:00

If you’ve been considering incorporating your small business, you’ve probably been confused about the difference between S and C corporations.

The similarities between S and C corporations are as follows:

1. Both S and C corporations are both separate legal entities that offer limited liability protection. If, for example, the corporation is sued only the corporation’s assets are at risk. The assets of the board members or CEO are usually safe.

2. An S Corporation is essentially a C Corporation that has a special tax status with the IRS, created by filing form 2553. The articles of incorporation that are filed with the state are same.

3. Both entities must hold annual shareholder’s meetings. Meeting minutes must be kept with the corporate records. Failure to follow this procedure can result in a judge’s decision to ‘pierce the corporate veil’ and hold the corporation’s owners personally liable for any penalties or debts.

So what are the differences?

1. S and C Corporations differ greatly with regards to taxation. With S corporations any income or loss generated by the business appears on the personal tax return of the owners. This is often referred to as a “pass-through” tax entity.

2. C corporations are often referred to as separately taxable entities. As you’ve probably already guessed, any gains or losses do not appear on the owner’s personal tax records

By now you’re probably thinking, “What’s the use of an S corporation if my tax statements aren’t kept separate?”

The reason is this: Dividends paid to the small business owners from corporate profits may be taxed twice. The IRS can tax both the corporation and the person resulting in a hefty loss.

3. S and C corporations also differ with regards to ownership limitations, some of which are as follows:

a. C Corporations can have an unlimited number of shareholders while S Corporations are restricted to no more than 100 shareholders. As a small business owner this shouldn’t be much of a problem.

b. S corporations cannot have shareholders that reside outside of the United States. Practically anyone can own shares of a C corporation, regardless of where they reside.

c. Also, S Corporations ownership is largely restricted to individuals. C Corporations, other S Corporations, LLCs, partnerships and many trusts cannot own shares of an S corporation. C corporations can sell shares to individual or other legal entities.

Well there you have it. Basically S corporations offer the same liability protection without the tax separation or freedom of ownership. The restrictions placed on S corporations are hardly noticed by the bulk of small businesses with only a few owners. If you’re still not sure what type of corporation to form small-business-assistance is affiliated with professional incorporators that can help you decide.

Incorporating a small business in Delaware

2005-05-22T21:51:00.000-07:00

Once you’ve decided to incorporate your small business the next step is deciding which state to incorporate in. A common misconception is that businesses must incorporate in their state of operation. You can, in fact, incorporate in any one of the 50 states and the District of Columbia regardless of where your business currently operates.

It is perfectly acceptable to incorporate in a state other than your current area of operation, but it is not always a good idea to do so. If your company chooses to incorporate in a state outside its area of operation life becomes a little more complicated. Your business becomes a “foreign corporation” in any state outside of the state it is incorporated in. If a corporation is "transacting business" in a state other than where it is incorporated, it must register for a certificate of authority to transact business in the other state or possibly lose access to that state's courts and face fines. Registering for a certificate of authority, of course, costs money and is only one step in the process of qualifying to do business as a “foreign corporation” in another state.

Some of the most attractive features of incorporating in Delaware include:

Lack of corporate income tax for corporations incorporated in Delaware but not transacting business in the state.
Delaware has a separate corporate law system that uses judges appointed for their knowledge of corporate law as opposed to juries, whose knowledge of corporate law is limited at best.
Shares of stock owned by persons outside of Delaware are not subject to Delaware taxes.

For a small business deciding weather or not to incorporate in Delaware it is necessary to measure the cost of qualifying as a “foreign corporation” in the state of operation versus the amount that will be saved by incorporating a small business in Delaware. Typically it is not advantageous for small businesses to incorporate outside of their home state as even small businesses are usually required to pay corporate taxes in both the state of foreign operation and the state of incorporation. If you’re not sure where to incorporate, Small Business Assistance can help you decide if the cost of local incorporation will be less than incorporating in another state.

Limited Liability Companies

2005-04-26T21:27:00.000-07:00

TAX COMPLIANCE AND THE CORPORATE SHIELD

A business organized for purposes other than banking or insurance may find it advantageous to establish itself as a Limited Liability Company rather than as a corporation. A Limited Liability Company (LLC) is a hybrid between a corporation and a limited partnership. Members are afforded the limited liability of corporate shareholders and the pass through tax advantages of a partnership without the restrictions imposed on limited partnerships and Subchapter S corporations. Management and ownership may be structured in any fashion as specified in the Operating Agreement, thereby allowing for total flexibility in income distribution. In addition, the Operating Agreement is not required to be publicly filed, maintaining confidentiality of the ownership structure.

The principal issue when forming an LLC will be whether pass-through taxation is desirable; if not, the LLC can be structured to be taxed as a corporation. The LLC can be organized with two or more members. Members may be any person or legal entity, domestic or foreign, who own an interest in the company. Members have no liability (under California Corporations Code Section no. 1700, Chapter 86 of NRS in California, and under WS 17-15-101 through 17-15-136 for Wyoming) for the debts, obligations or liabilities of the company to any third parties, whether any such debts, obligations or liabilities arise out of contract, tort or otherwise, solely by reason of being members of an LLC. An LLC requires no general partner, so all of the members have the same limited liability, regardless of ownership interest.

Buying a Small Business

2005-04-26T18:21:00.000-07:00

Start thinking about buying an established business if you want to avoid the immense risks involved in starting one. Not everyone wants to start a business from scratch, and buying a business with the infrastructure in place lets you focus on building it up, as opposed to getting a new business off the ground. This is not to say that it’s easy to buy an existing business; it’s a fairly complicated process throughout which you need to know exactly what you’re doing.

Do you take credit cards? If so pleas...

2005-04-17T01:06:00.000-07:00

This message from Crystal Falls Business Chat on Delphi.com was forwarded to you by
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http://www.delphi.com/dir-app/showprofile.asp?uname=DENGARD

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I often get paid by pay pal. It's convenient but their fees are oppressive. Unfortunately keeping a merchant account to addept credit cards isn't really worth the monthly fee either.

Dennis

http://www.small-business-assistance.com/

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***Your Business is an e-Business***

Learn the best practices for e-business. Members of the e-Business
Communication Association exchange knowledge and share best practices
to gain competitive advantage. Learn more about membership by visiting:
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Point your browser to http://www.REALTEAM.com
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Tips for Marketing a Small Business on a Shoestring Budget

2005-04-16T21:52:00.000-07:00

Don’t let a small budget prevent you from effectively marketing your business

You could employ a number of effective small business marketing techniques while investing only time and effort. The effective marketing of your products and ideas will make or break your small business. No marketing campaign guarantees success but you can avoid the financial risk of a failed marketing attempt. Before you max out your credit cards for a television advertisement consider the following alternatives.

Click here to read more

Small Business Health Insurance

2005-04-15T12:15:00.000-07:00

This message from Crystal Falls Business Chat on Delphi.com was forwarded to you by
DENGARD.

You can view it in the context of the entire discussion by going to:
http://forums.delphiforums.com/CrystalFalls/messages/?msg=738.8

To view DENGARD's Profile, visit
http://www.delphi.com/dir-app/showprofile.asp?uname=DENGARD

=======================Forwarded Message=======================

There was alot of talk in feburary about associated health plans. I guess instead of purchasing insurance through your employer or individually, people like us can join other work related
associations. The idea is, if you have hundreds of people on the same plan the administration cost is lower (per person). Apparently administration costs account for about 30 percent of your
insurance premiums.

I know this doesn't do much for you at the moment but it could in the very near future. I heard alot of buzz about it around Feburary but nothing since.

I also published a short article on the subject, I'll see if i can't get permission to put it on my site and give you the link.

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Start up with multiple sales channels

2005-04-15T03:34:00.000-07:00

Starting a small business with several sales channels maximizes your chance of success

In those tender first few years after you start your small business every sale is significant. It's unfortunate that many entrepreneurs attribute a small start up budget with a single outlet for sales. In the past this may have been true. Few entrepreneurs had enough capital to open even a single store. Two or three stores in different neighborhoods was well beyond most budding entrepreneurs. Today, there is no end to the different sales avenues available to imaginative start up retailers, despite limited budgets

2005-04-15T02:23:00.000-07:00

Haloscan commenting and trackback have been added to this blog.

Association Health Plans

2005-04-15T02:06:00.000-07:00

Over 60 percent of America's uninsured are small-business owners and their families or the employees of a small business.

60 percent of 44 million is about 26 million people affected by this legislation. Will it actually help?

I don't have any employees and i live outside of the US so health care isn't an issue. A week long stay in the hospital without any insurance to speak of costs me less than a regular doctor visit did back home. I really feel for my family members that still live back in the US.

Apparently the bill is still pending according to AHPs now

I really want to know what's happening with this legislation. Any comments would really help.