Protecting Your Small Business

Here are several areas for you to consider to protect your business and reduce the risk of operating a small business.

1. Insurance. Many starting businesses don’t have enough insurance. You should consider liability insurance to protect yourself and your business from large claims or lawsuits. Think also about equipment insurance if you have a large investment in fixtures, equipment or inventory. Think about what all could go wrong and determine if insurance protection is sensible for your needs.

2. Company structure. Many small businesses are sole proprietorships, where the owner operates the business under his social security number. While this keeps things simple, it does introduce risk that some other business structures do not have. Limited Liability Corporations (LLCs) for example have some of the benefits of sole proprietorship with some of the personal protection of a corporation. If your business has any element of personal risk to your employees or customers, you may want to consider some kind of structure other than sole proprietorship or partnership. Although more work and cost is required to set up and maintain an LLC, the protection benefits may be to your benefit.

3. Taxes. As a business, you may be responsible to pay sales and use tax, your own self-employment (Social Security) and medicare tax, as well as payroll and other employment taxes. In many cases, you may need to file and pay taxes quarterly to avoid penalties from underpayment of Federal and other taxes. Check with an accountant for information on taxes.

4. Business Name and Trade Marks. You may have some risk of using a business name that already exists, or having someone else start a business after you with the same name. You may also have issues with your trademarks, logos, taglines or other elements of your marketing tools. At a minimum you may want to do some web searching on your business name and see if anything else is out there. You may need legal assistance to declare and protect logos, trademarks and company names.

5. Web Protection. Photographers, musicians and others who offer their products on the internet need to be careful about theft. Many people who wouldn’t steal from a grocery store will think nothing of ripping off music or images from the internet. Photographers and others who display images should consider the use of flash based websites and watermarks on images to prevent unauthorized use. Authors may want to consider only publishing excerpts of their works, and periodically checking the web for key words that appear in your works to see if they have been copied. Musicians may wish to sign up with a streaming-only service or sign up with an independent online seller to encourage legitimate purchase of your works. You may also want to consider licensing your music for royalty-free use, where the user pays considerably more for the music with the right to use it in their products.

6. Customers. Winning and keeping customers is key to the success of small businesses. Make sure that you are aware of any possibility for your customer records to be accessible to competitors. Note also that employees or contractors could become your competitor next week. You may need to have some kind of non-compete agreement that your employess or contractors sign to keep them from intruding on your customer base after your business relationship ends. If you will be using customer images or testimonials in any promotion, make sure that you have release documents signed by adults. And make sure you have effective and simple customer contracts and agreements to avoid legal and customer satisfaction problems. Note also that anything you post on your website or blog will be read by your competitors and they are free to adopt your ideas.

7. Retirement. If you depend solely on your business for your livelihood, you know how hard it is to have good benefits. There are investment plans for small business owners, and more health plans are showing up to which small business can belong.

8. Information. Make sure your website is secure, particularly any customer and payment data. Back up your business files weekly at a minimum, and store copies away from the computer. Consider service contracts for your computers and other electronic equipment. Spend some time writing down a process that you will follow to establish a working backup system. I recently lost a computer, and fortunately I had a recent backup and was able to reconstruct the core of my business in 24 hours on a new computer. I made a list of 25 actions to rebuild my system. This list kept me focused and productive.

9. Cashflow. It is tempting to get lines of credit or use your personal credit to fund a business. But you can put your entire family’s well-being at risk by extending yourself and your business. Consider running a self-funding debt-free business, where you only invest what you reap from the business. Your growth may be slowed, but the peace of mind you will get from having no business or personal debt tied up in the business is worth more than the money. There are a number of great resources for debt-free business operations. I recommend starting with Dave Ramsey.

These don’t address all of the areas of risk, but hopefully you have increased your awareness of the risks inherent in small business operations, and can make some clear actions to reduce and manage your business’ risk.

An Overview of Local Start Up Business Grants and Where How to Get Funding

Grants come in a wide array of sizes, for a broad array of purposes, from a myriad of sources. While most grant information rests at the Federal level, there are plenty of other sources of funding for a business startup out there. This article will focus on getting grants from your local community.

First, there are sound reasons for your local chamber of commerce and better business bureau to offer grants for businesses to start up – businesses employ people, and boosting the local job market is one of the important things your city government does. Even if your business just employs two part time shipping clerks, it still makes sense for your local business development center to host a grant program to help new businesses start out.

Likely candidates names for your local municipality’s business development center will be Chamber of Commerce, Economic Development Council, or Small Business Development Corporation. In addition to grant proposals, most of them have extensive libraries on things like local tax regulations, federal and interstate and state regulations you need to concern yourself with, local labor laws, and how to get your jobs listed in the want ads and local unemployment center. There are also organizations run by retired businesspeople that offer classes in starting a business, including step by step instruction on how to set up a business plan, how to handle your first two years taxes (where the capital put into the business can offset the revenue generated) and more. You can find out more about what resources your local area has for instructing small businesses and incubating them by going to the public library, or checking out your city’s web site.

To get a local grant, you’re going to have to demonstrate a mixture of enthusiasm and hardheaded business sense. Passion counts, but so does a demonstrated ability to plan, as does focusing attention on how your business needs will tie to local suppliers and supply chains, and will provide jobs for local people. Many municipalities have something analogous to the Community Development Block Grant Loan Program. How this works is that the municipality or county applies for a grant (called a block grant) from the Federal Government to do local spurring of business development, and then uses that funding as seed capital to make low interest or short term loans to local businesses to help them start out, provided they hire low income people from the area.

Many larger cities have programs like the one in Seattle, where for businesses that will employ more than 100 people, and will need new construction, can get grants for new construction if the buildings are Green, or LEED certified, minimizing construction waste and power usage.

Many grants are tied to non-profit organizations. You don’t have to be a non-profit organization to benefit from such a grant; you can work with a local NPO to get the grant, under an agreement where they’ll use your firm for goods and services – this represents a triple win for the underwriting grant agency. It helps a non profit organization work on a project that ameliorates a problem they’ve been assigned money to fix, it helps you, by giving your company contracts for work to be done, and it helps the community by allowing you to hire more people to get the job done. The local restrictions on this sort of partnership are varied and numerous, and it’s worth it to talk to someone at the local city hall to see what can and cannot be done without conflict of interest or collusion complications.

The last place to dig for grants (or the first one in some situations) is a local trade organization. If you’re in a field with a vital services niche, and it’s going unmet, it’s not unreasonable to get grants from a business organization to open the type of business they support; it helps bring their profession into a higher profile, or represents moving into an untapped market to them.

All of these should help you find local grants that help you achieve your goals.

Do You Think Starting a Cleaning Business is For You?

Starting a cleaning business can be one of the most profitable businesses you can start. Maybe you have worked for cleaning companies in the past or maybe you just enjoy cleaning and are considering turning your skill into a business. Either way, while a part-time cleaning business can make as much money as a full-tine job, you are running a business, which, in the beginning, will be much more time consuming and than two full-time jobs.

In this article, I ask a few questions that you should ask yourself before starting a cleaning business. By answering these questions openly and honestly with yourself it will greatly increase your chances of success.

Are you a self starter? By starting a cleaning business, you are your own boss. It will be entirely up to you to drive your business; develop projects, manage your time, follow-up with clients, create and send out marketing materials, etc., etc. etc.

How well do you get along with different people? Running your own business will bring you in contact with lots of different people. While you don’t need to be a completely outgoing extrovert, being able to communicate effectively with a variety of people including clients, vendors, bankers, lawyers, accountants or consultants will be a requirement. Can you deal with a demanding client, an unresponsive receptionist, or a difficult supplier if your business demands it?

Can you make decisions? Starting a cleaning business requires you to make countless decisions on a daily basis. You will need to decide not only on some of your major decisions like how much do you charge, what will you name your business, but decisions such as, how many fliers do you want to print, should you buy certain supplies in bulk, or how do you handle an upset client. These decisions will often have to be made constantly, immediately, and often under pressure.

Do you have the stamina and persistence to start a business? Starting a cleaning business can be one of the most rewarding endeavors you will ever take, but it’s also a lot of work, especially when you are getting started. Do you have the time, energy, and focus to work 10-12 hours a day, 6 to 7 days a week?

Can you plan and stay organized? Doing your research is crucial to any business start-up. It’s a cliche, but it holds true, “fail to plan, and you plan to fail.” You will need to organize things such as your financial records, your inventory, or client database, and cleaning schedules.

How bad do you want it? Running a business can be very stressful. Some business owners burn out quickly from having to carry all the responsibility for the success of their business on their by themselves. Having a strong drive will help you survive slowdowns and periods of burnout.

How will the business impact your family? Starting a business can be very stressful on families. During the initial start-up phase, many business owners have difficulty spending time with their families. It can also add a lot of financial stress in the first few months providing for a family before the business turns profitable. It is important to make sure that you communicate your plans clearly with your loved ones, because you will need their support and any starting a cleaning business involve their family members and loved ones in the process.

Starting a cleaning business is a life-changing experience. With any change comes stress. Think deeply about the questions above. Starting a cleaning business will require a lot of work, a lot of patience, and even more persistence, however, if you are committed to your own success and willing to put in the legwork at the start, you can build a very profitable business for years to come.