You will still need to familiarize yourself with basic bookkeeping and money management principles and activities such as understanding credit, reading bank statements and tax forms, and making sense of accounts receivable and payable. You also have to give careful consideration to the purchase payment options you offer customers, including cash, checks, debit cards, credit cards and online payment options, as well as establishing payment terms and debt collection in the event of nonpayment.

Opening a Bank Account

Once you’ve chosen a name and registered your business, you will need to open a commercial bank account. Setting up a business bank account is easy. Start by selecting the bank you want to work with–think small-business-friendly–and call to arrange an appointment to open an account. There’s not much more required than that.

However, when you go, make sure you take personal identification as well as your business name registration papers and business license, because these are usually required to open a commercial bank account. The next step will be to deposit funds into your new account (even $100 is okay). If your credit is sound, also ask the bank to attach a line of credit to your account, which can prove very useful when making purchases for the business or during slow sales periods to cover overhead until business increases. Also be sure to ask about a credit card merchant account, debit account, and other small business services.

Bookkeeping

When it comes time to set up your financial books, you have two options–do it yourself or hire an accountant or bookkeeper. You might want to do both by keeping your own books and hiring an accountant to prepare year-end financial statements and tax forms.

If you opt to keep your own books, make sure you invest in accounting software such as Quickbooksor Quickenbecause they’re easy to use and makes bookkeeping almost enjoyable. Most accounting software programs allow you to create invoices, track bank account balances and merchant account information, and keep track of accounts payable and receivable.

If you’re unsure about your bookkeeping abilities even with the aid of accounting software, you may wish to hire a bookkeeper to do your books on a monthly basis and a chartered accountant to audit the books quarterly and prepare year-end business statements and tax returns.

To find an accountant or bookkeeper in your area, you can contact the U.S. Association of Chartered Accountantsor the American Institute of Professional Bookkeepers. In Canada, you can contact the Chartered Accountants of Canadaor the Canadian Bookkeepers Association.

If you’re only washing windows on weekends to earn a few extra bucks, there’s little need for accounting software or accountant services. Simply invest in a basic ledger and record all business costs and sales. Since you are doing it on your own, be sure to use a commonsense approach when calculating how much to invest in your business vs. expected revenues and profits.

Also remember to keep all business and tax records in a dry and secure place for up to seven years. This is the maximum amount of time the IRS and Revenue Canada can request past business revenue and expense information.

In today’s super-competitive business environment, you must provide customers with many ways to pay, including cash, debit card, credit card and electronic cash. There is a cost to provide these payment options–account fees, transaction fees, equipment rental and merchant fees based on a percentage of the total sales value. But these expenses must be viewed as a cost of doing business in the 21st century.

You can, however, reduce fees by shopping for the best service with the best prices. Not all banks, merchant accounts and payment processing services are the same, and fees vary widely. You can also check with small business associations such as the chamber of commerce to see if they offer member discounts; it’s not uncommon to save as much as 2 percent on credit card merchant fees. Just remember, consumers expect choices when it comes time to pay for their purchases, and if you elect not to provide these choices, expect fewer sales.

Cash is the first way to get paid, which is great because it’s liquid and there’s no processing time required. As fast as the cash comes in, you can use it to pay bills and invest in business-building activities to increase revenues and profits. The major downside is that cash is risky because you could get robbed or lose it.

In cases like that, collecting from your insurance company could prove difficult if there’s no paper transaction as proof. Even if you prefer not to receive cash, there are people who will pay in cash, so get in the habit of making daily bank deposits during daylight hours. Also invest in a good-quality safe for cash storage for times when you cannot get to the bank.

If you’re running a service business, one the most popular way people still pay for services is with a check. You have to take a few precautions to ensure you don’t get left holding a rubber check, especially when dealing with new clients. Ask to see a photo ID and write the customer’s driver’s license number on the check.

If the amount of the check exceeds a few hundred dollars, ask the buyer to get the check certified or pay with a bank draft instead, especially if the client is new to your business. Also get in the habit of checking dates and dollar amounts to make sure they are right. I have been caught a few times with wrong dates and dollar amounts and it can be time-consuming to have to get a new check because of a simple error.

Debit cards are another option, but to accept them, you will need to buy or rent a debit card terminal. Most banks and credit unions offer business clients debit card equipment and services. The processing equipment will set you back about $40 per month for a terminal connected to a conventional telephone line and about $100 per month for a cellular terminal, plus the cost of the telephone line or cellular service.

There is also a transaction fee charged by the bank and payable by you every time there is a debit card transaction, which ranges from 10 cents to 50 cents per transaction, based on variables such as dollar value and frequency of use.

Opening a Credit Card Merchant Account

Many consumers have replaced paper money altogether in favor of plastic for buying goods and services. In fact, giving your customers the option to pay for purchases with a credit card is often crucial to success. This is especially true if you plan to do business on the web because credit cards and electronic cash are used to complete almost all web sales and financial transactions.

To offer customers credit card payment options, you will need to open a credit card merchant account. Get started by visiting your bank or credit union or by contacting a merchant account broker such as 1st American Card Service, Cardservice International or Merchant Account Express to inquire about opening an account.

Providing your credit is sound, you will run into few obstacles. If your credit is poor, you may have difficulties opening a merchant account or have to provide a substantial security deposit. If you are still unsuccessful, the next best option is to open an account with an online payment service provider, which is discussed in the next section.

The advantages of opening a credit card merchant account enabling you to accept credit card payments are numerous. In fact, studies have proven that merchants who accept credit cards can increase sales by up to 50 percent. Not to mention that you can accept credit card payments online, over the telephone, by mail and in person, as well as sell services on an installment basis by obtaining permission to charge your customer’s credit card monthly or per agreement.

Of course, all these benefits come at a cost, especially when you consider that you’ll have to pay an application fee, setup fee, purchase or rent processing equipment and software, pay administration and statement fees, and pay processing and transaction fees ranging from 2 to 8 percent on total sales volume. Once again, these fees must be viewed as the cost of doing business.

Online Payment Services

Online payment services allow people and businesses to exchange currency electronically over the internet. These services are very popular with consumers and merchants. PayPalis one of the more popular online payment services with more than 40 million members in 45 countries, offering personal and business account services. Both types of accounts allow funds to be transferred electronically among members, but only the business account enables merchants to accept credit card payments for goods and services.

The advantages of online payment services are that they’re quick, easy and cheap to open, regardless of your credit rating or anticipated sales volumes, and you can receive payment from any customer with an e-mail account. You can have the funds deposited directly into your account, have a check issued and mailed, or leave funds in your account to draw on using your debit card. The only real disadvantage is that most services redirect your customers to their website to complete the transaction. This can confuse people who in some cases will abandon the purchase.

Every small-business owner also needs to establish a payment-terms policy. Although you certainly want to standardize the way you get paid, at the same time you will also have to be flexible enough to meet clients’ needs on an individual basis. Setting payment terms covers deposits, progress payments and extending credit.

It’s important to establish clear, written payment terms with clients prior to providing services or delivering product. Your payment terms should be printed on your estimate forms, included in formal contracts and work orders, and printed on your final invoices and monthly account statements.

Securing Deposits

If you’re run a service business, you have to get in the habit of asking clients for a deposit prior to providing services, especially if the work also involves product sales that have to be paid for by you in advance. In this case, the deposit should be for at least the value of the materials. If you’re supplying labor only, try to secure a deposit of at least one-third to one-half of the total value of the contract in advance of providing any services.

Your order form or contract should have the deposit information clearly stated. Information on canceled orders or contracts and your refund policy should also be on your forms. Securing a deposit is your best way of ensuring that, at minimum, basic out-of-pocket costs are covered should the customer cancel the job or contract.

Progress Payments

Progress payments are also a way to ensure that you do not leave yourself open to financial risk. The key to successfully securing progress payments is to prearrange your contract and payment terms. Agree on the amount that will be due at various stages of the project. You can use percentages to calculate the progress payments, such as 25 percent deposit, 25 percent upon delivery of any materials, 25 percent upon substantial completion, and the balance at completion or within 30 days of substantial completion.

Or you may arrange for more concrete progress payments based on indicators that are relevant to the specific scope of work, the job or the services provided. Regardless of the system you use, progress payments on larger jobs can dramatically lessen your exposure to financial risk.

Extending Credit

In most cases there’s no need to extend credit to consumers unless you deliver a service such as pest control that’s billed monthly or a major contract that is completed in stages. As a general rule, when a transaction is complete you should be paid in full. However, in the case of business-to-business sales, commercial clients will generally want some type of credit on a revolving-account basis, such as 30, 60, 90 or sometimes 120 days after delivery of the product or completion of the service.

Ideally, you want to be paid as quickly as possible, so you might want to offer a 2-percent discount if invoices are paid within one week. And if you do extend credit, make sure to conduct a credit check first, especially when large sums of money are at stake. There are three major credit-reporting agencies serving the United States and Canada: Trans Union, Equifaxand Experian. All three credit bureaus compile and maintain credit files on just about every person, business and organization that has ever applied for credit.

Debt Collection

No matter how careful you are when it comes to extending credit privileges to customers, once in a while you will not be paid on time or at all. What can you do to get paid? The first rule of getting paid is to keep the lines of communication open with your delinquent client, and keep the pressure on to get paid through the use of nonthreatening telephone calls, letters and personal visits.

You cannot legally intimidate clients into paying you, but you can explain why it is in their best interest to pay you–namely, to keep your business relationship intact, that nonpayment can hurt their credit rating or that you may sue them if they do not pay.

Another option is to hire a collection agency to collect the outstanding debt. Collection agencies generally charge a percentage of the total amount owed as their fee, which can range up to as much as 50 percent. The Association of Credit and Collection Professionals is a good starting point for finding a collection agency to work with.

Your final option is to take the delinquent account to small-claims court, but remember that small-claims courts have limits as to how much you can sue for in your state or province, ranging from $1,500 to $25,000. Filing fees vary by state and province as well, and these must be paid upfront. But if you win, the fees are added to your award.

As a rule of thumb, small-business owners that take people to court for nonpayment generally represent themselves, as the amount of the potential award is usually small and doesn’t justify lawyers’ fees and expenses. Even if you win, you will not necessarily be paid the amount you’re awarded. You may win a judgment, but still have to chase the defendant through garnishment of income or seizure of assets to get paid. You can learn more about the small-claims court process and filing fees by contacting your local courthouse.

Originally Posted on: Florida Small Business Consulting - SuncoastGlobal.com

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1. How can I get the best protection from general business liabilities that will threaten my business assets and my family’s assets?
2. How can I get the best tax breaks out of the business entity that I select?

The answer to Number 1 above is best answered by first talking with decent business attorneys, then talking with your potential business partners (if any) and finally deciding for yourself. It is also beyond the scope of this article.

The rest of this article will try to help with your answer to Number 2 above. The search for shelter from high taxes is what we’ll be trying to help you with.

How to Save Taxes with Your Business Entity

New business owners are quick to learn that confiscatory tax laws have a profound influence on the success or failure of all small business operations. As a small business owner, you want to get every break available under the law, and you don’t want to see the results of all your hard work get eaten up by the IRS and the tough tax laws.

The problem, however, is that those tax laws have become so painfully complex that new business owners automatically assume they could never make the best of their available options without conceding the strategy planning to the tax professionals. Interestingly, the tax professionals themselves are often at odds with each other as to the best tax saving options in this ever-changing environment.

Understand the Differences Between the Entities

Before we discuss the specific tax advantages and disadvantages of the various business entities, it is important that you know some fundamental tax considerations between a:

1. Sole proprietorship
2. General partnership
3. Limited partnership
4. Corporation
5. Limited liability company

The Sole Proprietorship

The sole proprietorship is thought of as the quickest and easiest way to set up a business operation. There are no blanket prerequisites, nor are there any specific costs in starting a sole proprietorship. There may be some minor formalities, however, that will need attention depending on your state or your jurisdiction. These formalities, which of course apply to all business entities, mean that you will probably have to:

• Obtain an occupancy permit for your place of business
• Secure a business license
• Apply for a franchise or registration number for your operation. This registration number will be used by the state agency to monitor the collection of sales tax and other regulatory matters

All of these procedures are simple and can be done without the assistance of an attorney or accountant regardless of the state in which you are doing business. Once you start a sole proprietorship, you are the sole owner. Unless you are in a community property state in which your spouse is vested with a one-half interest, you alone have full control and responsibility for the operation.

The General Partnership

Like the sole proprietorship, starting up the general partnership could be a relatively easy process. No costs or formalities are required. Wise counsel, however, will give you about a dozen reasons why you should have a detailed partnership agreement drafted whenever you put yourself on the line with any other individual. A few items that you would be best advised to spell out in writing are:

• The amount of capital each partner is expected to contribute up front
• The rights and duties of the partners
• The method for sharing profits and losses
• The authorization for cash withdrawals and salaries
• The methods for resolving disputes or taking in new partners
• The method for dissolving the partnership should dissolution become necessary

The Limited Partnership

A limited partnership is much like a general partnership except for one important fundamental difference. The limited partner is protected by law because the limited partner’s legal liability in the business is generally limited to the amount of his or her investment.

It enables this special type of investor to share in the partnership profits without being exposed to its debts in the event the company goes out of business. This protection exists as long as the limited partner does not play an active role in the partnership operation.

Unlike the partnerships described above, the corporation is considered an artificially created legal entity that exists separate and apart from those individuals who created it and carry on its operations. With as little as one incorporator, a corporation can be formed by simply filing an application for a charter with the respective state. By filing this application, the incorporator will put on record facts, such as:

• The purpose of the intended corporation
• The names and addresses of the incorporators
• The amount and types of capital stock the corporation will be authorized to issue
• The rights and privileges of the holders of each class of stock

It is true that operating as a corporation has its share of drawbacks in certain situations. For example, as a business owner, you would be responsible for additional record keeping requirements and administrative details. More important, in some cases, operating as a corporation can create an additional tax burden. This is the last thing a business owner needs, especially in the early stages of operation.

Remember, aside from tax reasons, the most common motivation for incurring the cost of setting up a corporation is the recognition that the shareholder is not legally liable for the actions of the corporation. This is because the corporation has its own separate existence wholly apart from those who run it. However, let’s examine three other reasons why the corporation proves to be an attractive vehicle for carrying on a business.

• Unlimited life. Unlike proprietorships and partnerships, the life of the corporation is not dependent on the life of a particular individual or individuals. It can continue indefinitely until it accomplishes its objective, merges with another business, or goes bankrupt. Unless stated otherwise, it could go on indefinitely.
• Transferability of shares. It is always nice to know that the ownership interest you have in a business can be readily sold, transferred, or given away to another family member. The process of divesting yourself of ownership in proprietorships and partnerships can be cumbersome and costly. Property has to be retitled, new deeds drawn, and other administrative steps taken any time the slightest change of ownership occurs.
• Ability to raise investment capital. It is usually much easier to attract new investors into a corporate entity because of limited liability and the easy transferability of shares. Shares of stock can be transferred directly to new investors, or when larger offerings to the public are involved, the services of brokerage firms and stock exchanges are called upon.

There are pros and cons to operating your business as a corporation. One of the biggest tax disadvantages for the ordinary C corporation is the dreaded double taxation. Many business owners opt for electing to operate their corporations under subchapter S of the Internal Code. Also known as an S corporation, this entity allows income to pass through to the individual shareholders.

The Limited Liability Company (LLC): New Kid on the Block

In earlier editions of this Top Tax Savings Ideas, the S corporation had been referred to as the logical choice for those small businesses that need to steer away from the regular corporation and its potential tax pitfalls. Increasingly, however, the LLC has been coming to the forefront as another viable alternative. This is especially the case now that much of the air is clearing within the various state laws and professional organizations that deal with LLCs. In fact, many practitioners argue that the LLC is now the preferred choice in the following situations where:

• Legal liability protection is a primary concern
• A simplified “one time” tax on the owners is preferred to dealing with cumbersome corporate tax liability
• The entity cannot qualify for subchapter S status

An LLC is a hybrid entity that has the legal protections of a corporation and the ability to be taxed (one time) as a partnership. In many regards, LLCs are treated much like S corporations for tax purposes. However, there are some additional advantages over S corporations, including the following examples:

• The LLC usually offers better leeway for owners who wish to write off business losses in a business that relies on entity-related debt that is incurred
• The LLC allows greater flexibility for the owner to take assets out of the company without incurring unplanned tax liability

Remember to check with your lawyer or accountant about the advantages of the LLC in your particular state. Ask up front what it would cost to form a corporation versus the cost of forming an LLC. You may be surprised to learn that in some states an LLC could be established by filing a simple, one-page document, which lays out the Articles of Organization of your LLC, with the secretary of state.

You can form an LLC for any lawful business as long as the nature of the business is not banking, insurance, and certain professional service operations. By simply filing articles of organization with the respective state agency, an LLC takes on a separate identity. Similar to a corporation, but without the tax problems of the corporation, it will be taxed like a partnership.

Originally Posted on: Florida Small Business Consulting - SuncoastGlobal.com

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Here is our list of the most common licenses and permits small-business owners may need, plus where you can go for more information.

Business License

Contact your city’s business license department to find out about getting a busines(after you pay a fee, of course) to operate a business in that city. When you file your license application, the city planning or zoning department will check to make sure your area is zoned for the purpose you want to use it for and that there are enough parking spaces to meet the codes.

You can’t operate in an area that is not zoned for your type of business unless you first get a variance or conditional-use permit. To get a variance, you’ll need to present your case before your city’s planning commission. In many cases, variances are quite easy to get, as long as you can show that your business won’t disrupt the character of the neighborhood where you plan to locate.

County Permits

County governments often require essentially the same types of permits and licenses as cities. If your business is outside any city or town’s jurisdiction, these permits apply to you. The good news: County regulations are usually not as strict as those of adjoining cities.

State Licenses

In many states, people in certain occupations must have licenses or occupational permits. Often, they have to pass state examinations before they can get these permits and conduct business. States usually require licensing for auto mechanics, plumbers, electricians, building contractors, collection agents, insurance agents, real estate brokers, repossessors, and anyone who provides personal services (i.e., barbers, cosmetologists, doctors and nurses). Contact your state government offices to get a complete list of occupations that require licensing.

Federal Licenses

In most cases, you won’t have to worry about this. However, a few types of businesses do require federal licensing, including meat processors, radio and TV stations, and investment advisory services. The Federal Trade Commission can tell you if your business requires a federal license.

Sales Tax License

There are two reasons you need a certificate of resale (in other states, this may be called a “seller’s permit” or a “certificate of authority”). First, any business selling taxable goods and services must pay sales taxes on what it sells. The definition of a taxable service varies from state to state. Depending on individual state rulings, both the parts and labor portions of your bill may be taxable.

Sales taxes vary by state and are imposed at the retail level. It’s important to know the rules in the states and localities where you operate your business because if you’re a retailer, you must collect state sales tax on each sale you make.

Before you open your doors, be sure to register to collect sales tax by applying for each separate place of business you have in the state. A license or permit is important because in some states it’s a criminal offense to undertake sales without one.

Fire Department Permit

You may need to get a permit from your fire department if your business uses any flammable materials or if your premises will be open to the public. In some cities, you have to get this permit before you open for business. Other areas don’t require permits but simply schedule periodic inspections of your business to see if you meet fire safety regulations. If you don’t, they’ll issue a citation. Businesses such as restaurants, retirement homes, day-care centers and anywhere else that lots of people congregate are subject to especially close and frequent scrutiny by the fire department.

Air and Water Pollution Control Permit

Many cities now have departments that work to control air and water pollution. If you burn any materials, discharge anything into the sewers or waterways, or use products that produce gas (such as paint sprayers), you may have to get a special permit from this department in your city or county. Environmental protection regulations may also require you to get approval before doing any construction or beginning operation. Check with your state environmental protection agency regarding federal or state regulations that may apply to your business.

Sign Permit

Some cities and suburbs have sign ordinances that restrict the size, location and sometimes the lighting and type of sign you can use outside your business. To avoid costly mistakes, check regulations and secure the written approval of your landlord before you go to the expense of having a sign designed and installed.

Health Department Permits

If you plan to sell food, either directly to customers as in a restaurant or as a wholesaler to other retailers, you’ll need a county health department permit. This costs about $25 and varies depending on the size of the business and the amount and type of equipment you have. The health department will want to inspect your facilities before issuing the permit.

Originally Posted on: Florida Small Business Consulting - SuncoastGlobal.com

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Age

The age of your users impacts the website. According to Federal Trade Commission regulations through the Children’s Online Privacy Protection Act (COPPA), a website must get a parent’s permission for children under 13 to disclose information.

Also, remember that children under 18 should not be permitted to view information which is adult in nature. In addition, children under 18 may not be able to agree to contracts such as your website user agreement and purchase contracts. Finally, FTC also regulates advertising and other content directed at children.

Bulletin Boards, Chat Rooms, Etc.

Any posting ability by users should be subject to site submission rules and a user agreement. The rules should obtain users’ consent not to post pornographic, defamatory or infringing materials and, through your user agreement, consent to your company not being liable for other users taking such actions.

Copyright

The footer of your site should display a copyright notice for the content of the site. The notice should read “� [date] [copyright owner name] All rights reserved.” You should also deposit a copy of the site with the Copyright Office to record ownership of the site’s content, look and feel.

Finally, under the Digital Millennium Copyright Act, depending on the purpose and the users’ activities on the site, your company may be eligible to register for limited liability offered by the act for the site. You should consult your attorney for review of the act and how to register.

Domain Name

When building your website, domain names are an important part. Often they are directly tied to your business name, your logos and your brand. Businesses often fail to give proper thought to which domain name to choose.

Picking a domain name should have the same careful thought as naming other products or services. Choosing a domain name should include analysis of trademark law in relationship to the name. Under current law, domain names may be awarded to trademark holders over others through arbitration or litigation. This means that having trademark registration in the same name as your domain name may ensure that you retain ownership of the name.

Export

If persons from other countries use your site, then you are exporting. If you sell to such persons, you are exporting the item you sell and entering into contracts with persons of other countries. If you use encryption on the site, then you are exporting technology regulated by the Department of Commerce and Defense.

Various government departments regulate the countries with which U.S. companies may do business and when a company needs an export license to transmit items, technology or information abroad. Doing business with certain countries, such as Iraq, Iran, Cuba, North Korea, Syria, Yugoslavia and others, is severely restricted.

Depending on the information on your site, what kind of business you do, the technology and information involved, your site may be subject to these regulations, and you should consult with your attorney about these business decisions.

Framing

It is important to be careful how your website frames to other sites. There have been trademark cases regarding consumer confusion over which site is which, and which site is the source of the content and data.

Also, be careful, because some sites’ “terms and conditions” and/or “user agreements” prohibit collecting and reprinting data displayed on the site–even if such data is factual, such as times and places for events.

Giveaways

Sweepstakes, contests, lotteries and giveaways are governed by state and national laws as to how they must be conducted. Florida and New York require registration with the state if the prizes are over $5,000 in value. Most important, you should have rules outlining the terms and conditions of the giveaway.

The rules are an offer from the sponsor which the entrant accepts by entering. The offer, plus the acceptance, make a binding contract covering the giveaway.

Home Page

On the footer of the home page of the site, you should have a link to your privacy policy, your user agreement or terms and conditions, and your copyright notice.

Insurance

Be sure that your business insurance covers website activities. Often website activities are excluded from errors and omissions and other business insurance.

Lloyds of London and a few other companies have insurance specifically covering materials and sales via websites, including security of credit card numbers and other important data.

Jurisdiction

One of the primary reasons for having a user agreement is to better address the issues of jurisdiction. Under current law, website owners may be subject to jurisdiction and law in any state or country where its users are located. Being subject to the law of so many different locations makes trying to comply with the law and trying to assess your risk tricky.

An attorney can help you consider which markets are your highest risk and how to lower your risks through consultation with local counsel or blocking users from those regions. Additionally, you should consider that many foreign jurisdictions do not offer protections for intellectual property which are comparable to the U.S.

Therefore, if a user in such a region steals content or software from your site, you may have little recourse by law, and a hard battle to fight on foreign soil and in a foreign language.

Linking

When linking to other sites, you should consider two factors. One is what word or image you are using for the link and whether it is a trademark of another site or company. If so, you need the trademark owner’s permission to post the company’s trademark on your site.

Second, you should always link to the home page of a website since there have been “deep linking” cases claiming loss of advertising revenue which would have been gained if the users had been directed through the home page.

Metatags

Courts have not permitted use of another company’s trademarks as metatags on competitors’ sites. These cases arose when company A used company B’s trademarked term in the metatagging of company A’s site so that when a user looked for company B, company A would come up in the listing. For example, it would not be permitted for Coke to use the metatag “Pepsi” on the Coke website.

Notification

Under the Digital Millennium Copyright Act, there are required procedures for someone to notify a website that materials on the site may infringe on that person’s copyright. If the Digital Millennium Copyright Act applies, these procedures should be outlined in a notification policy on the site.

Obscenity

Materials which are considered “obscene” by state or federal law are not permitted on the internet and, especially, may not be viewed by children. What is obscene is based on the local standards of the viewing community. This makes prior determinations of what is acceptable somewhat complex. If you have questions about your site and its content, you should review them with your attorney.

Privacy Policy

If you collect any information from users of your site, using cookies or otherwise, the Federal Trade Commission requires you to have a privacy policy. The privacy policy should contain an explanation of how you collect the users’ information, how and where the information is stored, how the user can delete or change the information, and to whom the information is disclosed and for what purpose. The European Union also has similar and strict regulations on collection of information via websites.

Rules for Mail Order

The FTC and some states have guidelines for selling items by mail which have been extended to cover internet sales. These guidelines cover return policies, customer contact and other information about how to inform your customers about your products, shipping and sales procedures.

SEC

The Securities and Exchange Commission considers a website a means of disclosing information to the public about a company. Therefore any information disclosed on your website should be given the same review and consideration that your company gives all public disclosures with regard to “forward-looking statements” and “material” information.

Trademark

Trademarking the name of your company, logo, mottos and domain name is an important part of your business development and should be reflected on your website. Your nationally registered marks should display an � and unregistered marks should display a � or SM.

User Agreement

Having a user agreement or “terms and conditions” may be the most important part of a website. A user agreement requires each user to agree to be bound by a contract governing his or her use of the site by clicking “I agree” before being permitted to use the site.

Be aware that simply posting your legal agreement without forcing the user to click “I agree” prior to use is unlikely to bind your users to the terms. The user must take an active step through which she agrees to the terms and must not be allowed to proceed to use the site without such step.

A user agreement allows a company to:

• dictate how the site may be used (for example, for reading and printing materials)
• dictate how the site may not be used (for example, reverse engineering the coding tricks, copying content, for illegal purposes)
• dictate who may use the site (for example, persons over 18, US citizens)
• dictate procedures or policies for the site (for example, return policies, complaint policies, notification of copyright infringement policies)
• dictate your company’s waiver of implied legal warranties (for example, implied warranties of noninfringement, fitness for particular purposes, etc.)
• dictate the limit of your company’s liability for the site, other users postings on your site, sites you link to, etc.
• dictate jurisdiction for any disputes relating to the site

View Source

The ability for users to view the source code of nearly all websites by using the “view source” command in browsers means that the source code for your website is not protectable by trade secret law.

For something to be protected by trade secret law, it must not be publicly known, the owner must take some effort to keep the information secret, and the information must have monetary value to the owner. If the information is publicly available on the web through “view source,” the information is not a trade secret.

Warranties

Statements on your website about your products and services are express warranties to customers. It is important to carefully review all website text to be sure that what your company promises is true and corresponds with its other policies and advertising.

When you review, look for statements that are absolute statements which may be hard to prove or verify if the Federal Trade Commission were to request that you do so. Examples of such statements are: “Our printer works with all software,” “Our services are the best,” and “We guarantee that our product will always perform perfectly.”

Also, be aware that the FTC has specific guidelines that should be followed for use of the words “free” and “guarantee” in advertising or on your website.

Also, review your website to be sure that the text matches your regular business contracts. For example, your website should not promise a 60-day money-back guarantee if your contract states only a 30-day warranty.

XXX

If your site contains adult materials, be sure to consult your attorney regarding special legal requirements regarding notice prior to entering the site, notice requirements under federal regulations and other laws applicable to the adult entertainment industry.

Your Risk

The law is all about risk. The more time and money you spend following laws and regulations governing your business, the lower your risks of fines or successful claims by government or third parties.

Originally Posted on: Florida Small Business Consulting - SuncoastGlobal.com

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The good news is, retail spending has remained strong through the economic ups and downs (it totaled about $3.58 trillion in 2002, according to the U.S. Census Bureau).

While the costs of establishing a permanent retail location can be steep–you may spend up to $100,000 or more, with leases spanning three to 10 years–carts, kiosks and temporary spaces can be an easier way to get a foot in the door with a lot less risk.

The upfront investment for a kiosk or a cart ranges from just $2,000 to $10,000, according to Patricia Norins, publisher of Specialty Retail Report, a quarterly trade publication for specialty retailers. And today, carts and kiosks are a $10 billion industry.

Flexibility is another advantage to staying small. License agreements for carts and kiosks are shorter and are usually renewed every month up to one year depending on the location. This arrangement makes it easy for entrepreneurs to “come in, try it out for a month, and if their product isn’t working, shift to a new product line or close up shop and move to a new location,” Norins says.

These temporary locations can also work well for seasonal businesses that only need to be open for a limited time. For example, a specialty candy shop may open just before Christmas, remain open through Valentine’s Day, Easter and Mother’s Day, then close for the remainder of the year.

The most popular site for a temporary operation is a busy mall, but many operators are also finding success in airports and other transportation facilities, at sporting events, and at other creative venues limited only by their imagination and ability to strike a deal with the property manager.

At the Mall of America, about 100 temporary tenants dazzle 40 million visitors a year. Cart rental rates are about $2,300 a month or 15 percent of monthly sales, whichever is greater. All temporary tenants must pay an initial fee of $1,500 in “key money,” which pays for a store designer to design and build a cart with the right look.

Not interested in doing business in a mall? Street vendors and swap meet and fair concessionaires need to check with the city or county in which they want to do business for the regulations and specifications for the types of products, hours and displays that are allowed.

Starting Your Business

Options for starting a cart or kiosk business include opening a permanent location in a mall and leasing a cart; buying a cart to use for outdoor events or on street corners; or renting a cart short-term.

“The least expensive option is to rent [a cart] for a short time and see how it goes,” says Bruce Stockberger, owner of Stockberger Marketing Associates, a North Palm Beach, Florida, small-business marketing firm specializing in cart, kiosk and Internet marketing. He says you’ll spend at least $600 per week for rent.

Whether you lease or buy a cart depends on your product and location. In malls, you generally lease a cart from mall management. The cost of leasing depends on the season and mall traffic volume but is usually at least $800 per month for space and a cart, and can get very high in a good location.

Some malls charge a percentage of your sales in addition to monthly rent. Wally Rizza, owner of several carts in high-profile locations like the Irvine Spectrum Entertainment Center in Irvine, California, pays more than $2,000 per month for rent on each of his five carts.

“Kiosks start higher than carts, usually $9,000 or $10,000,” says Denise Clark, author of From Dogs . . . To Riches: A Step-by-Step Guide to Start & Operate Your Own Mobile Cart Vending Business. Additional start-up costs depend on your merchandise. Items such as jewelry and crystal require a greater investment than, say, hot dogs.

Carts come in many sizes and styles with varying capabilities. There are carts for specific types of food, some with refrigerators, grills, steamers–even small ovens so you can bake on location. Determine your needs before ordering a cart, advises Jeffrey Morris, president of All A Cart Manufacturing Inc. in Columbus, Ohio, a cart design and manufacturing company.

“List your products and the equipment required to make or display them,” he says. “Also draw a simple layout of the cart to give [the manufacturer] an idea of size requirements.”

Think versatility, especially with food. Don’t limit yourself to making one item, in case it doesn’t sell well and you have to switch gears. “What sells might be completely opposite from what you thought,” says Gerardo Gonzalez, president of Gonzalez & Associates, a Piscataway, New Jersey, company that consults on mobile merchandising and food-service start-ups.

You can get a good deal on used carts, but Clark, who also sells custom-designed carts, urges caution. “People buy a cart they think is cute–only to find out they’ve purchased someone else’s headache,” she says. “It ends up costing more to modify than to buy new.”

In cart sales, location is everything. Here’s your first decision: Do you want a permanent location or should you move from event to event?

With a permanent mall location, you don’t have to worry about purchasing a cart, moving it or battling bad weather (unless it’s an outdoor mall). You can build a clientele and predict how business will go and how much product you’ll need. On the downside, rent may rise. If mall sales slump, you’ll suffer. And if your product isn’t exclusive, a neighboring store could start offering the same merchandise.

There are many upsides to owning a mobile cart, says Clark, who does most of her business at special events. “You don’t have overhead like rent and utilities,” she says, “and if sales are poor, you just move.”

Focusing on Your Target Audience

Choosing a location really comes down to one key element: “It starts with identifying who your target customer is. You want to locate close to where those customers are,” says Howard Van Auken, academic director for the Pappajohn Center for Entrepreneurship at Iowa State University in Ames.

Thinking about her target customers worked for Diane Flannery, a Ben & Jerry’s franchisee as well as CEO of Juma Ventures, a San Francisco organization that finds employment for inner-city kids. “When we started [with Ben & Jerry's] eight years ago, we were trying to find different venues where we could sell ice cream,” she says. “We figured young people love baseball and ice cream, so the ballpark seemed like a good fit.”

Once you’ve found your target customers, Van Auken says, “visit those areas and see what the traffic pattern is.” In addition, according to Van Auken, you need to check with the property managers of your target location regarding such issues as product approval and display issues, security, operating costs, cash flow, staffing and lease length.

For a mall, you’ll want to speak with mall management in charge of carts and kiosks. For a public place, contact the city or county to see if a cart is allowed and what permits are required. In a professional office building, contact building management.

Susie Grant, specialty leasing manager for the Galleria at South Bay in Redondo Beach, California, also has a list of questions you’ll need to consider:

• What type of storage is available? While the Galleria’s kiosks do have some storage space, tenants can buy more at an additional charge.
• Do you plan on leasing during the holidays? Rent goes up considerably during that time.
• How long a lease do you want to sign? Grant offers agreements that last anywhere from a month to a year.

After you’ve balanced out cost issues and decided on lease length, then it’s time to find great staffers and set a move-in date. “[Location] is always based on availability,” Grant says. “[Kiosk owners] may have something in mind that’s not available at the time they’re coming into the mall.”

You’ll also need to obtain a business license, and if you haul your cart like a trailer, you must get a license from the Department of Motor Vehicles. If you serve food, you’ll need a permit from the Department of Health, which requires a specific amount of training in food preparation and handling. Malls often already have the carts permitted and insured.

While considering all these issues, one of the smartest things you can do is trust your instincts. “Go with your gut,” Grant says. “If you have a good feeling about a location, it’s probably going to be a pretty good place for you to start.”

Make No Mistake

Beginning retailers make a lot of mistakes. Here are five of the biggest:

1. Not doing a reality check. Do you have the temperament it takes to succeed in retail? “One of the biggest mistakes people make is thinking that retailing is going to be one way, and their experience turns out to be very different,” says Daniel Butler, vice president of retail operations for the National Retail Federation in Washington, DC. “They’re not realistic about the challenges.” Retail is a lifestyle choice. Can you hack it? Butler suggests working part time in retail for a few months to find out before you start your business.
2. Failing to research. Surprisingly, many beginning retailers don’t develop a business plan or a marketing plan. “When someone comes to me and says ‘This is the research we’ve done, this is why we feel this product will sell and why we’ll be successful in this location,’ it gives me a greater comfort level [in talking further],” says Courtney Lackey, a general manager with Jones Lang LaSalle, a property management leasing company that manages rental properties.
3. Creating clutter. In retail, you’re branding from day one. If your product displays have no rhyme or reason, customers have no reason to stop and shop. “The biggest mistake a cart or kiosk retailer can make is putting [out] too much merchandise,” Lackey says. “Something that’s well-displayed, colorful and catches your eye attracts customers.”
4. Competing with big-box retailers. Face it, as an independent retailer you’ll never beat WalMart on price. But a lot of small retailers fall into the price trap of trying to compete with the big boys–a big mistake, says Bob Phibbs, a retail consultant in Long Beach, California. Instead, focus on your edge as a small retailer: customer service and a unique consumer experience.
5. Choosing the wrong location. The rental rate may be great, but if the location doesn’t draw people, you might be in trouble even if your product is good. Where are shoppers seeking your type of product going? What types of big-box retailers complement your product and will drive traffic your way? One no-cost way to find out is by sitting in a mall and watching the traffic flow. “If you decide you want upscale people, look at where they’re already shopping and how you’d get that market,” Phibbs says. “Know all these things {before} you sign leases.”

Rules and Regulations

With shopping center leases, you’re customarily charged for maintenance of common areas and for the mall’s marketing efforts. Find out what the mall’s plans are for any structural alterations or remodeling, resurfacing the parking lots, or replacing the roof.

These can be devastating assessments for a young business. Requirements for hours and days of operation, employee parking restrictions, participation in community service events, gift certificate and loyalty programs, and storefront appearance may not fit into your business plan or capabilities. Make sure you’ll be capable of conforming to these requirements.

Originally Posted on: Florida Small Business Consulting - SuncoastGlobal.com

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