FAQ

For free consulting assistance, please call the Small Business Development Office, 797-2277. We are located on the USU campus, 1330 E. 700 N., Room 124 (entrance).

 What are the legal steps in starting a business? » top

It is very easy to start a proprietorship, with no employees, you simply get a license from the city you are operating in and start (Logan exempts home businesses with sales under $1,200 per year from licensing requirements). You use your SS# for identification purposes. Otherwise, you follow the steps below:

1. Identify your legal structure: Proprietorship, Partnership, Corporation, Limited Liability Co., Professional Corporation, Nonprofit Corporate. You must first select the legal structure you will operate under; as that is one of the questions on the first form you fill out, the SS-4. You will also need an attorney to help you with creating the legal structure for all of the above except the proprietorship.
   
   
2. Fill out the Federal SS-4, Application for Employer Identification Number: Only proprietors with no employees can use their social security number as their identification number; all others must have a Federal Employer Identification Number. Go to www.irs.gov for obtaining a copy of this form online.
   
   
3. Fill out the State TC-69, Utah Business and Tax Registration form: This is an application for a Utah Employer Identification Number. Only proprietors with no employees can use their social security number as their identification number; all others must receive a state EIN number. This form is also used to obtain a Sales and Use Tax License (and number), Lubricating Oil Fee, Beer Tax, Cigarette and Tobacco License, and to register your business name. If all you are doing is registering your business name, you do not use this form. Go to www.tax.ex.state.ut.us and go to forms, for obtaining a copy of form TC-69, or other forms, online.
   
   
4. Fill out the State’s Status Report, Form 1, Utah Department of Workforce Services: This registers you for unemployment. No one is exempt from this. Go to www.jobs.utah.gov/ui to obtain the form or to register online.
   
   
5. Obtain a State and/or City license: Some occupational/professional businesses require a state license, such as attorneys. Most businesses just need a license from the geographical area (city, town, county [for unincorporated areas]) they are operating in.
   
   
   

 How do I get a bar code for sales? » top

Uniform Code Council, Inc.
7887 Washington Dr., Suite 300
Dayton, Oh 45459
Tel. 937-435-3870
Fax 937-435-7317
www.uc-council.org
info@us-council.org

The Uniform Code Council provides bar codes to facilitate distribution of retail products. The Council’s role is to establish and promote multi-industry standards for product identification and related electronic communication. The goal is to enhance supply chain management thus contributing to added value to the customer.

 Do I need a business plan? » top

A business plan is crucial for clarifying, to yourself as well as others, the type of business you are in, the products you will carry, the marketing environment you operate within, how you are going to sell to that market, production layout, and your financial situation. It is also often required for a bank loan or for investors. The SBDC will be glad to help you with the details of your business plan. The business plan should be in narrative style. One possible outline for a business plan follows:

1. Executive Summary: This would summarize a long plan. Many businesses have a brief plan that does not need a summary. If you do a summary, it should be no longer than 1-2 pages and should basically follow the business plan outline. It is written as a summary after the business plan is done.
   
   
2. Financial Source and Use: A Summary of how much money is needed, how it is going to be used, collateral being provided, and how it is going to be paid back.
   
   
3. Mission Statement: Identify the values you plan to build your business around. These are values you feel important, as held by your numerous stakeholders. A stakeholder is anyone who has a valid interest in your business: Yourself, family, employees, customers, and suppliers. To create a mission statement, you can make a list of the various stakeholders, and what they each want. You can then identify what you feel is important and summarize those elements as your mission statement.
   
   Sample Mission Statement Might Be: “The Bridgerland Ice Arena will provide recreational, educational and competitive opportunities to the general public, hockey players, figure and speed skaters, and youth and school groups. A non-profit cultural center, its goal is to become economically self-sufficient.”
   
   
4. General Description of Business: Identify the company name, legal structure, location, stage of development, founders business activity, industry you are in, and reasons you think your business will succeed.
   
   
5. Market Plan:
   
   
   •  Market Environment:
     
     
     1. General Environment: What industry are you in? How has it developed and grown over time? “What is going on in the economy right now that impacts your industry?” Is the customer base growing or not? Are similar businesses doing well? What impacts will technology have? How do your products and services fit into the industry?
        
        
     2. Trends: What social influences are impacting this industry? What will people care about in the next 6-8 months? What have historical and present trends in your industry been that would indicate what is happening in the next few months? What product/service needs do clients have in the short-term? Is the market growing in the short term?
        
        
     3. Your Target Market (Customer Profile): Who or what is your major target market(s)? Try to identify 20 attributes for each of these markets? For example: what is their sex (if individuals), age, income, occupation, location, family status, children, education, ethnic origins, hobbies, interests, and needs.
        
        
     4. The Potential Market Demand: Is there enough demand within your service area to justify your business? There are several ways of analyzing this; for example, your National Assoc might have information on population groups required to support this type of business, the average customer’s purchase, and other information. Similar businesses in similar populated/geographical areas might be a source of information on demand. The State Tax Commission might have sales information (if the industry is subject to sales tax) for your industry. A break-even analysis would show the level of sales required to break-even, which could be used as a guide to the feasibility of reaching break-even.
        
        
     5. Competition: Who/what is your Competition? What are their strengths and weaknesses? You might look at this through product/service attributes: Product, Selection, price, quality, service, reliability, expertise, reputation, image, location, layout, appearance, sales methods, credit, availability, management, longevity, advertising, unique benefits, etc.
        
        
     6. Barriers to Entry: Are there barriers to yourself or others in start-up costs, skills required, source of supply, manufacturing, government regulations, or other considerations?
        
        
        
   •  Market Approach
     
     
     1. Market Position: Define what is special or unique about your product or service, what benefits are you “positioning” your business around. When they hear of your business, what benefits will they see you having and how will that position you in comparison to your competitors benefits?
        
        
     2. Product/Service & Packaging: What are you specifically selling? What is your product focus? If you have packaging, what impact does that have on how your product is perceived?
        
        
     3. Price: What are the price, cost, and markup? How profitable is your product?
        
        
     4. Promotion – Advertising - Distribution: What methods of promotion and advertising do you plan to use? How are you planning to distribute your product/service to your customer so that they can make the decision on whether to buy it or not?
        
        
     5. Customer Service Plan: Identify you customer service goals for each area of your business that will interact with the customer. Identify after sales practices, exchange policy, complaint procedure, ways to motivate employees towards excellent customer service, and ways to obtain customer feedback.
        
        
     6. Action Plan: This would identify the programs you plan to implement or use, when you plan to do so, and how much you plan to spend.
        
        
6. Legal Considerations – Major Risks: Are there intellectual property rights you plan to use, such as patents, copyrights, trademarks, or trade secrets? Are there government regulations that you need to be in compliance with? Are there potential law suites? Are there any major risks one should be aware of?
   
   
7. Production Goals (For Manufacturers): How do you plan to produce your product? What equipment or support services will you need?
   
   
8. Financial Overview: You will have your financial statements and forecasts in the appendix, you will summary the significance of what they are indicating about your business in this section. (You will likely need consulting assistance for this area)
   
   
   • Balance Sheet: If you are an established business, are there significant changes in assets, liabilities, or owners equity over the last three years? If there are significant changes, what is their cause? What do the changes imply about your business? If you are a new business, then you will only have a current balance sheet: What is strong or weak about it?
     
     
   • Income Statement: If you are an established business, what do the last three years of income statements show about your business? What is the trend? Why is this so? If you have projected income statements, what do they show? (If you are a new business, your income statement and cash flow may be quite similar).
     
     
   • Cash Flow: Cash flow should be a monthly forecast of sales, expenditures, investments, and loans. This will show your cash peaks and lows so that you can plan your financing needs accordingly and possibly adjust your expenditures, or speed up your collections.
     
     
   • Break-Even Analysis: This will show your sales or price, variable cost, contribution margin (that which is left over after the deduction of variable costs to contribute to fixed costs), and fixed costs. It is an excellent way to look at the sales required to break-even, or to see how changes in the price and/or costs can change the sales required to reach break-even. It can be a fantastic tool for your business.
     
     
9. Appendix
   
   
   • Historical Income Statements over the last three years.
     
     
   • Historical Balance Sheets over the last three years.
     
     
   • Projected Cash Flow Sheets for the next three years, by month.
     
     
   • Assumption Page: Shows the assumptions and sources of information for the cash flow projections you made. This shows where the numbers came from. It is critical for the numbers to have credibility.
     
     
   • Break-Even Analysis: Shows sales less variable expenditures, contribution margin, fixed costs, and sales required to reach break-even.
     
     
   • Other attachments, such as sample promotional materials.
     
     
     

 How valuable is small business historically? » top

1. Were over 99% of all employers
   
2. Employed 51% of the private work force in 1999; 38% in high tech
   
3. Provided 55% of innovations in 1988
   
4. Accounted for 51% of private sector output in 1999
   
5. Made up 39% of GNP in 1982
   
6. Accounted for 15.6% of federal prime contract dollars in 1988; 19.9% in 1992; 33.3% in 1999
   
7. Provided 48.5% of all new jobs from 1984 to 1988; 100% in 1987-1992; 67.4% in 1998-1999
   
   Source: Small Business Answer Card, 1991, 1993, and the Small Business By The Numbers at www.sba.gov/adv
   

“Small business, its independence, and the existence of competition are a requirement for democracy. It provides the potential of economic independence to individuals and the sharing of economic power; thus it supports the existence of the middle class by reducing the power monopolies and large business could exert. Small business must have a climate in which it can thrive.”

“Views and Opinions are not necessarily those of the SBA. SBA’s cooperation and financial support does not constitute or imply its endorsement of any opinions, products, and/or services. All SBA programs are extended to the public on a nondiscriminatory basis.”