Starting a Business in AR


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Starting a Business in AR

  1. 1. • Training – Classes for new ventures and existing businesses – Online training• Research – Sample business plans and guides – Market Research• Consulting – One-on-one advisory services• Web Site: – E-news service: Biz Bytes & Tech Track
  2. 2. Market, Management & Money
  3. 3. • Industry driving forces• Demand for my products• Competitive forces• Market size and market share• Positioning for success
  4. 4. • Your responsibilities: – Direct marketing and advertising – Manage finances and control cash – Consistently improve operational efficiency – Place the right person in the right job –
  5. 5. • Identify start-up costs• Identify amount of owner’s investment• Project sales, profits, and cash flow• Identify funding sources
  6. 6. • Executive Summary• Products and Services• Your Market• The Industry• Operations and Management• Your Budget
  7. 7. • Your savings• Friends and family• Equipment leasing companies• Bank financing (with SBA Guaranty)• Venture Capitalists
  8. 8. • Obtain a commitment before binding agreements• Don’t expect to get a grant• Don’t assume you can get a bank loan• Don’t expect 100% financing
  9. 9. • Create your business plan• Focus on expected sales, profits, and cash collections• Summarize your history• Describe how you will use the money• Describe your cash contributions• Present your resume
  10. 10. • Do’s – SBA does help small business owners obtain financing from a bank – SBA does restrict the maximum allowable interest rate – SBA does not allow balloon notes – SBA does allow for longer-term financing – SBA does offer variable rate loans – SBA does charge a fee after your loan is approved – SBA does look at credit history
  11. 11. • Donts – SBA does not make direct loans – SBA does not offer grant money – SBA does not offer “low-interest” loans SBA Website--
  12. 12. • Choose legal form of business• Complete start-up tax and employer requirements• Obtain licenses, permits, etc.• Sign leases and other agreements
  13. 13. • Sole proprietorship• Partnership• S Corporation• C Corporation• Limited Liability Company
  14. 14. • Articles of Incorporation are filed with the Secretary of State if the business is: – C Corporation – S Corporation – Limited Liability Company• Search the availability of your business’ name using AR Secretary of State’s online database:• Doing Business As Certificate from the County Clerk’s office is obtained if business is not incorporated and: – Sole Proprietorship – Partnership
  15. 15. • Check for licensing boards that may regulate your specific line of business• Contact city or county clerk’s offices to obtain a business or privilege license• Businesses locations must be in compliance with zoning laws. Includes home-based• May need to obtain FEIN number from IRS• Contact Dept. of F & A for sales and use tax if selling a product or providing certain services• Check for permit requirements--health, alcohol, tobacco, etc.
  16. 16. • Find out which taxes are applicable: – sales and use taxes – self-employment tax (Social Security and Medicare) – federal & state income taxes, possibly including estimated tax payments – withholding taxes on employee wages – federal and state unemployment taxes – corporate state franchise tax – miscellaneous taxes
  17. 17. • IRS Publication 334, Tax Guide for Small Business, provides more information• Starting a Business in Arkansas: A Tax Guide for New Businesses gives more state details, available from Arkansas Department of Finance and Administration new_business.pdf
  18. 18. • Record all your business income sales activities• Maintain a record of all business expenses incurred• Keep a schedule of business assets showing purchase date, purchase price, serial and model numbers• Maintain business records for a minimum of three years, in some cases indefinitely or permanently (for example a car title)• Consult an accountant in setting up bookkeeping system• Regularly visit the IRS web site:
  19. 19. • Maintain a separate bank account for your business receipts and disbursements• Do not commingle your personal money with business money• Get to know a bank loan officer before you need money• If you borrow money, keep the loan officer informed about your business
  20. 20. • Check with your insurance agent about the types of coverage your business needs – Property/casualty – General Liability – Product Liability – Workers’ Compensation – Business Interruption – Key Person Insurance or Life Insurance
  21. 21. • Know employment laws - AR Dept. of Labor• Understand differences between an employee & an independent contractor• Know proper practices for interviewing, hiring and firing• Develop a personnel manual or employee handbook• Consider employment or temp agencies
  22. 22. • Zoning laws and regulations for your location and type of business• Tax advantages of business use of home• Insurance coverage other than homeowner/renter policies• Mail delivery-- home vs. post office box• Business vs. residential telephone
  23. 23. • Set achievable goals for your business• Develop a realistic action plan• Provide an adequate amount of capital• Management skills: Know it, Learn it, buy it
  24. 24. Reynolds Business Center 2801 S. University Little Rock, AR 72204 501.683.7700