Updated 10-Steps to Starting Your New Business or Non-Profit

Updated 5/18/2016

I am often asked, “How hard is it to start a new business … non-profit”? I tell them, “It’s not hard; but there are a number of basic tasks to accomplish”. At some point, a bank, a client, your accountant is going to ask for one or more of the following items. It only makes sense that if you are going to prepare one of these items, then you might as well prepare all of them, at the same time, right from the beginning.

Before we start with the 10-Steps to Create a Business or Non-Profit, let me first explain the benefits of creating a Mastermind Alliance and what it is. A Mastermind Alliance is Principle 2 of Napoleon Hill’s Secrets to Success outlined in his 1937 book Think and Grow Rich. A Mastermind Alliance involves two or more people who work in perfect harmony for the attainment of a definite purpose. For the purposes of starting your business, consider the Mastermind Alliance your advisory board. Some of the members may serve on your board of directors. In forming your alliance, or advisory board, I recommend starting small, one to three others in addition to you. Pick individuals for which you trust their opinion, will look out for your best interest, and have skill sets you can use in the early stage of your business formation; i.e., accountants, lawyers, developers, engineers, whatever “fits” well with your business idea. When you form the alliance, you are the leader, you set the agenda and meeting times, and you begin by establishing the definite purpose for the group and the reason to meet. These individuals are volunteers to start, but may become future investors. To keep their interest early on, at least start by buying their meals or coffee.

The 10-Steps below to create your new business assumes you already have a name for your new business. The business name can either be your professional name, like a law firm, or Mom’s Best Ice Cream, or if the name you desire to use is already taken, or you are operating a franchise like Subway, you will create your business name and file under what is called a DBA, or “doing business as”. This means that the trade name or fictitious business name you use for marketing, signage, and the name your customers know you by, is not the legal name of the business. Your Subway franchise is known as Subway to your customers, but obviously you can’t start a new business using that name. So, you create a name you like. Jim’s Restaurants LLC “doing business as” (DBA) Subway No. 258. A great source of more detailed information on starting a business can be found at the US Small Business Administration (SBA) at: https://www.sba.gov/starting-managing-business.

Here are the 10-Steps to create your new business:

1. The first thing to do is to create a Vision Statement and a Mission Statement. Use your alliance to help with this. The vision should be expressed in no more than 4-6 sentences that describe the future results of the business or non-profit; consider these thoughts: define where you are going, the future state of what you want to achieve over time; define what it will look like when you get there; create a way to evaluate achievement. Create a Mission Statement. It too should be no more than 4-6 sentences that define the present state or purpose of the business; addresses what it does; who it does it for, and; how it does what it does. It describes the action needed to get to your vision. Your alliance will help you with this too.

2. Choose your Business Structure. This is the legal, and tax, structure of your business. It can be either a Sole Proprietorship; a Limited Liability Corporation; a Cooperative; a Corporation; a Partnership; a S Corporation, or; a Non-Profit. Refer to the SBA web site referenced above or the IRS at: http://www.irs.gov/, and use the search.

3. Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS), you can do this on-line at: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-%28EIN%29-Online.

4. Once you have your EIN, fill out an IRS W-9 Form using your company name and EIN number and file it away. This form is your Request for Taxpayer Identification Number and Certification Form. Your clients will request this form when you submit you first invoice. You will likewise want to request a similar form from vendors you pay. See Link: https://www.irs.gov/pub/irs-pdf/fw9.pdf.

5. Form an Incorporating Board; this does not need to be your final working board of directors. Most incorporating boards aren’t. You and two friends, family members or members of your mastermind alliance will do.

6. Create Articles of Incorporation, and have the Incorporating Board adopt them. File the Articles with your State and Local governments as required. The articles must state your purpose. Most governments have on-line forms you can complete and ways to upload your document. A Google search will yield lots of samples. Use the one page samples you find.

7. Use your EIN and Articles of Incorporation to open a Company Checking Account. Never use your personal account. Doing that becomes an accounting and tax nightmare real quick.

8. Obtain an Occupational or Business License from your State and/or Local government as required.

9. In your first Board meeting, also have the Board adopt By-Laws and a Conflict of Interest Statements. Samples of these are also all over the Internet.  If you are a Non-Profit, prepare and file with the IRS Form 1023, Application for tax-exempt status. https://www.irs.gov/uac/about-form-1023.  Don’t receive tax-exempt donations until the IRS approves. If you are a retailer or other business subject to sales tax collections, get registered with the State and/or Local governments that oversee the collection and distribution of sales tax collections. You will have to file quarterly sales tax collections.

10. Establish your bookkeeping methods, set-up a chart of accounts, and create your company in accounting software.  Prepare a budget and 24 month cash flow projections.

We Need a Third Leg in the Education Stool – An Ignite Presentation

I had the fortunate opportunity last week to do an Ignite Presentation at the Spring Conference of the International Economic development Council. I shared the stage with three other remarkable presenters: Della Rucker; Henry Snorton; and Ellen Watters. Joy Wilkins moderated. If you are not familiar, the Ignite format is 20 slides in 5 minutes, they switch automatically every 15 seconds, no matter what!!!

At first my thought was, piece of cake, I have at least 30 minutes of research results, I can do this. Well the truth is, its hard. Fifteen seconds, sound like a lot…I broke it down into number of words…about 30-33. It even matters which words, as I found out, multiple syllable words take longer to pronounce. Some words more than others. Needless to say, after about 15 attempts, I was comfortable enough to go on stage with confidence I would not run over the time limit of each slide, and still get my point across.

Well, here it is. It’s a topic I have a great interest in and concern about.
Drop me a note, I would like to know your reaction and or additional facts and information.

Click here: https://www.dropbox.com/s/fwpxr5281uiuupw/Ignite%20IEDC%20Presentation%20-%20Notes.pdf

Get Ready for 2014

Review these important items and you will be ready for the new year:

  •  Refresh your list of available buildings and sites;
  • What’s your workforce profile? Study it and share with employers and prospects;
  • Who are you? As a community? Prepare a year in review including announcements in economic development, education, the arts and entertainment, community development, and infrastructure;
  • Prepare a list of projects for 2014;
  • Set benchmarking targets for jobs, site visits, expansions, investments, tax collections, and incentives.

Taking time to review these items will prepare you, your staff, and your board for a successful 2014.

What Site Selectors Like to See in Your Newsletters

I recently attended a session at the Louisiana Industrial Development Executives Association’s annual conference in which several site selectors collaboratively said what they like to see in newsletters.  To be frank, I was a little nervous about whether or not the newsletter I write for economic development clients could stand up to this instant test.  Included in the site selectors remarks about what’s important were:

  • Project announcements
  • Economic data that they can’t easily find; like labor, wages, education, and occupations
  • What your targets are.

This information should be wrapped around stories about who you are as a community, your supporting stakeholders, and results of your performance benchmarking.What a relief! My newsletters indeed do this and I lived to write another day.

The Government Shutdown . . . and Principles of Success

In Times like These, We must dig deep Within for Leadership Napoleon Hill’s Principles of Success

 As the shutdown lumbers on, I feel it’s important to reflect on the principles of success laid out originally in 1928 by Napoleon Hill.  Crafted from interviews of 500 millionaires including the likes of Thomas Edison, Alexander Graham Bell, Henry Ford, Elmer Gates, Charles M. Schwab, William Wrigley, Theodore Roosevelt, William Jennings Bryan, Woodrow Wilson, and William H. Taft . . . you get my point, the list goes on and on.

It was good then and is good now for those in leadership positions who need to act in a fair and just way.

  • Develop Definiteness of Purpose
  • Establish a Mastermind Alliance
  • Assemble an Attractive Personality
  • Use Applied Faith
  • Go the Extra Mile
  • Control Your Attention
  • Inspire Teamwork
  • Learn From Adversity and Defeat
  • Cultivate Creative Vision
  • Maintain Sound Health
  • Budget Your Time and Money
  • Use Cosmic Habit Force
  • Create Personal Initiative
  • Build a Positive Mental Attitude
  • Control Your Enthusiasm
  • Enforce Self-Discipline
  • Think Accurately

If each member of Congress practiced these principles to the fullest extent possible, the rest of us could rest assured that the integrity of our government would never be compromised.

For those interested in learning more about the principles of success, there are numerous web sites filled with information.

10 – Steps to Creating Your New Business or Non-Profit

I am often asked, “How hard is it to start a new business … non-profit”? I tell them, “It’s not hard; but there are a number of basic tasks to accomplish”. At some point, a bank, a client, your accountant is going to ask for one or more of the following items. It only makes sense that if you are going to prepare one of these items, then you might as well prepare all of them, at the same time, right from the beginning.
1. Create a Vision Statement – no more than 4-6 sentences that describe the future results of the business or non-profit; consider these thoughts: define where you are going, the future state of what you want to achieve over time; define what it will look like when you get there; create a way to evaluate achievement.
2. Create a Mission Statement – no more than 4-6 sentences that define the present state or purpose of the organization; addresses what it does; who it does it for, and; how it does what it does. It describes the action needed to get to your vision.
3. Obtain an EIN from the IRS, you can do this on-line; See Link: https://sa2.www4.irs.gov/modiein/individual/index.jsp.
4. Once you have your EIN, fill out a W-9 form with your company name and EIN number and file it away. Your clients will request this form when you submit you first invoice. See Link: http://www.irs.gov/pub/irs-pdf/fw9.pdf.
5. Form an incorporating board; this does not need to be your final working board of directors. Most incorporating boards aren’t. You and two friends, family members or business associates will do.
6. Create Articles of Incorporation, have the incorporating Board adopt them, and file with your State and Local governments as required. The articles must state your purpose. Most governments have on-line forms you can complete and ways to upload your document if you prepared ahead of time. A Google search will yield lots of samples.
7. Use your EIN and Articles of Incorporation to open a company checking account. Don’t use your personal account.
8. Obtain an occupational or business license from your State and/or Local government as required.
9. In your first Board meeting, also have the Board adopt By-Laws and a Conflict of Interest Statements. Samples of these are also all over the Internet.
10. If you are a Non-Profit, prepare and file with the IRS Form 1023, Application for tax-exempt status. Don’t receive tax-exempt donations until IRS approves. If you are a retailer or other business subject to sales tax collections, get registered with the State or Local government that oversee the collection and distribution of sales tax collections.

Pushing the Economy Forward . . . Beyond the CFO’s Report

Last month, the Wall Street Journal published a report titled “How to Conquer Angst and Spur the Economy”. The report was based on the findings of a group of CFO’s convened in Washington, D.C. who were asked how to fix the economy. Many showed angst over government gridlock, others said we are now living in a 2% world (2% growth).

The group was divided into five tasks forces, the final conference voted on these…
TOP 5 OVERALL PRIORITIES:
1. Repeal all corporate tax preferences, then lower corporate tax rate to 25% or lower
2. Improve cybersecurity
3. Enact a territorial tax system to enable companies to deploy cash earned abroad in the US and encourage them to invest here
4. Government must recognize the vast opportunity in oil and gas and develop a coherent energy policy
5. Invest in infrastructure including pipelines, and electric transmission lines.

But I think they stopped short. While their recommendations focus on corporations, mine focus on putting money in the hands of the consumers. Here are FIVE MORE WAYS TO STIMULATE THE ECONOMY:
1. Fund public works projects at the state and local levels including roads, bridges, water treatment facilities, ports, and rails; will increase construction spending and increase employment in the trades.
2. Increase minimum wage. Current wages are at 1994 levels. If the minimum wage in the 70’s kept pace with inflation, the current minimum wage would be $21/hr. Raise minimum wage to $10/hr.
3. Loosen employment requirements for operating the cash register at retail jobs, the sector with the most openings and difficulty in filing them. Many 18 to 34 year olds, the ages typically with the highest rate of unemployment, are denied jobs for a host of reasons, most which don’t relate to a part-time, non-hazardous working environment.
4. Shift education priorities from a 2 path system, college or technical; to include a third path, entrepreneurialism and working for yourself. From 2000-2011 sole proprietors grew by 10.6 million; wage and salary employment by 105,000.
5. Increase lending to small business and the flow venture capital to start-ups. In 1970, sole proprietors accounted for 11% of employment, in 2011, 21%.