The 2013 "Starting a Business" digital brochure is provided by Jim Stonick of Federal Direct Tax Services of High Point, NC. If you have any questions regarding starting a business and/or any financial/tax related questions - please don't hesitate to contact Jim personally at (phone) 336-687-5429 or (email) jim.stonick@gmail.com

1. Business Agreements continued Starting a Business Checklist
• Payment of expenses not covered by business operations.
Stop loss agreements, percentage contributions in case
✓ Done. Skip any item which does not apply to the business.
1) __ Develop a business concept 15) __ Open business bank
 2013 
of shortfall, expenses to be paid personally by owners,
Starting a
2) __ Select and retain accountants accounts
provisions for additional capital contributions. and attorneys 16) __ Apply for required permits
3) __ Select a business entity or licenses
• Draws. Scheduled draws, limits on draws, restrictions on
4) __ Determine ownership structure 17) __ Select an insurance agent
Business
draws.
5) __ Complete a business plan 18) __ Purchase insurance
• Amendment provisions. Circumstances, authority, 6) __ Obtain initial start-up capital 19) __ Select a commercial real
procedures. 7) __ File for organization with state estate agent
8) __ Hold first board of directors 20) __ Locate and obtain office or
• Rights of owner withdrawal or transfer of interest. Ability
meeting production space
to withdraw, requirements for sale of interest, rights of first 9) __ Apply for a federal employer 21) __ Acquire furniture and
refusal, ability to sell to outside party, advance notice of identification number (EIN) by equipment
retirement, methods of evaluating owner’s share. submitting Form SS-4 22) __ Complete any needed
• Death of an owner. Buy/sell agreements, succession plan, 10) __ Apply for S corporation status build-out of space
rights and authority of relatives, location of each owner’s by filing Form 2553 23) __ Select a payroll processing
will, right to divide interest of owner. 11) __ Establish accounting company
procedures 24) __ Select an employee
• Decisions / disagreements. Situations that will require a 12) __ Choose an accounting benefits company
vote, majority or unanimous vote requirements, arbitration software 25) __ Hire staff and complete
agreement. 13) __ Input all transactions from the training
• Amending the agreement. Situations where amendment is beginning of business develop- 26) __ Commence marketing
mandatory, situations where amendment is a choice, vote ment into accounting software 27) __ Order initial inventory and
14) __ Apply for business financing begin production
required for amendment.
and solicit investors 28) __ Conduct a grand opening
Financial Plan
Contact Us
• Capitalization. Capitalization is the source There are many events that occur during the year that can affect
your tax situation. Preparation of your tax return involves sum-
of cash used for start-up costs, including marizing transactions and events that occurred during the prior
professional consulting, asset acquisition, year. In most situations, treatment is firmly established at the
and buying or leasing business property. time the transaction occurs. However, negative tax effects can
be avoided by proper planning. Please contact us in advance
Information about any debt or equity fi-
if you have questions about the tax effects of a transaction or
nancing should be included in this section. event, including the following:
• Forecasting cash flow. For new businesses, • Pension or IRA distributions. • Retirement.
cash flow, more than profit, is the best in- • Significant change in income or • Notice from IRS or other
deductions. revenue department.
dicator of whether a business will survive. • Divorce or separation.
• Job change. Federal Direct Tax Services
It determines whether a business will be • Marriage. • Self-employment.
able to pay its expenses and debts as they • Attainment of age 59½ or 70½. • Charitable contributions 200 W Lexington Ave. Suite 102
come due. A business plan should contain • Sale or purchase of a business. of property in excess of
• Sale or purchase of a residence $5,000. High Point, NC 27262
a statement of projected cash flow for the or other real estate.
first 12 months of the business. Lenders or
investors may require customized reports This brochure contains general information for taxpayers and Appointments Mon-Sat
indicating cash flow and profit projections. should not be relied upon as the only source of authority.
Taxpayers should seek professional tax advice for more information. Contact Jim Stonick
Copyright © 2012 Tax Materials, Inc. 687-5429
All Rights Reserved

2. Products and Services • Management continuation plan. Management
continuation planning involves determin-
Provide a detailed description of the products ing how a business will continue should one
and services the business will offer. Include or more of the key employees be lost or be-
pricing, unique features, and the required level come unable to fulfill his or her duties. The
of quality. Create an appendix for any photos, plan should specify the exact procedures
technical specifications, drawings, or brochures.
The Purpose of a Business Plan for transferring duties when required, in-
cluding arrangements with vendors, banks,
A business plan is a written document created
Marketing Plan employees, and owners.
to detail all aspects of a business on a compre-
hensive level. Many banks and investors re- The marketing plan is developed by conducting
quire a written business plan before lending to, (or having conducted) market research to de- Personal Financial Statement
or investing in, a business. fine the clientele of a business and how to best A personal financial statement (PFS) is a bal-
market products and services. ance sheet for each owner on an individual
Executive Summary Sales forecast. The sales forecast is the final el- basis. It includes values and detail of all as-
ement in a marketing plan. It forecasts over a sets owned, as well as amounts and terms for
The executive summary is a summary of the
12-month period the quantities of each prod- all debt obligations.
entire plan. It should be written when all oth-
uct or service expected to be sold. It is the base
er sections of a business plan are complete and
from which the financial plan will develop. Business Agreements
should be less than one page in length. The ex-
• Incorporation agreements.
ecutive summary should include enough detail • Partnership agreements.
to allow a user to read the summary and gain a Operational Plan • LLC agreements. Consult an attorney to ensure compliance
basic understanding of the business. with state laws when forming a business entity.
The operational plan details the day-to-day op- The following issues should be addressed in an agreement
erations of a business. Items discussed in an to form a business entity.
Mission, Vision, and Description operational plan should include issues such as • Name and address of business.
location, licensing, personnel, inventory, sup- • Names and addresses of owners.
• Mission statement. The mission statement should • Description of business purpose. Products, services,
pliers, credit policies, and managing payables. market.
be less than 30 words and describe why a busi-
• Contributions to capital. Loans to the business, repayment
ness exists, as well as its fundamental purpose guarantees.
at present. Management and Organization • Special allocations for partnerships.
• Vision. The vision statement defines the in- • Number and duties of employees.
• Key employees. The term key employee refers • Responsibilities of owners. (1) Administrative duties;
tended future state of an organization. It sets (2) Services to be performed: Hours dedicated to business,
to a person or persons who will manage the
a high, long-term goal which is used to guide time off, length of commitment, wages/guaranteed pay-
business on a daily basis. Include in the list ments, contributions to retirement funds, other payments.
decisions of management and ownership.
the key employees’ talent, experience, and • Divisions of responsibility.
• Description. The description section defines
distinctive competencies brought to the busi- – Authority to: Hire and fire employees, train employees,
goals and objectives, business philosophy,
ness. Incorporate job descriptions of key em- make loans, purchase inventory and supplies, enter into
target market, industry, and the legal entity contracts, incur business debt.
ployees, as well as resumes of the owners and
under which the business will operate. – Books and records: Responsibility for bookkeeping,
key employees if using a business plan to seek accounting, and tax compliance, location of books and
financing. records, fiscal or calendar year, accounting method, tax
elections, responsibility for legal compliance.
continued