Tips for Entrepreneurs

Thanks to Mike Doyle, University of Georgia Business Outreach Services, Dalton College; Jacquelyn Adkins, J. Wiley Adkins P.C., Dalton; Nancy Mayo, Division of Rehabilitation Services, and Georgia Woodward, Dalton/Whitfield Chamber of Commerce for providing the information for this section of the Career Depot web site.

Introduction

Of new business entities started each year, over 80% fail due to poor management and/or financial difficulties. More often than not they fail because the owners or management did not consider one or more of the ingredients needed for business success.

The following information will assist you in deciding whether or not to start your own business, help you once you have decided to get started, and provide assistance in making your new business a success. It will help you decide whether you are qualified and if you have considered the various phases of going into business for yourself. Careful thought now may help you prevent mistakes and avoid losing your time and savings.

If, after reviewing this information, you have doubts or see areas of weakness in your business plan, we strongly recommend that you obtain professional guidance. There are many free resources available in the community to assist you.

We hope that you will profit from the accumulated information presented here and apply it for the benefit of your own company. Good luck in your venture.

Leadership Ability

Leadership ability is essential for any small business with one or more employees. Management ability is often thought of as synonymous with leadership, but it is not. It is much easier to define and execute management rather than leadership. Successful business entities have strong leadership. As a small business owner, you should manage yourself and lead others. You should be able to do the following:

  • Recognize the right type of person for the job you need to fill.
  • Give direction to your employees and supervise their results.
  • Earn the respect of your employees rather than demand it of them.
  • Put the time into your business that you expect of your employees.
  • Use your time productively.
  • Make timely decisions based on the available facts.
  • Present an enthusiastic, positive image to both customers and employees.
  • Be fair and honest in dealing with your employees and customers.
  • Be motivated and responsible.

Employees

Consider how many employees you will need and their qualifications. What you can pay will to a large extent determine how many and how qualified your employees will be. Usually a new business will have to get by with fewer than it would like. Hire at least one person as soon as feasible to reduce your repetitive, time-consuming work in order to free you for more productive tasks.

If you hire inexperienced personnel, the cost is lower. However, it will take time and effort on your part before the employees are trained and productive. Hiring skilled, experienced employees will cost more but will require less of your time to train and supervise them.

Consider these sources for selecting employees.

Family members or relatives will often work for a lower salary or commission and loyalty is high, but sometimes the talent is not available. The ability to effectively supervise and correct is sometimes impaired.

  • College Career Placement Offices may help provide leads to new college graduates and alumni. College graduates are usually highly trainable and sometimes already possess the necessary skills. Competition for college students may raise the minimum salary.
  • Newspapers are a good resource for recruiting applicants.
  • Check our your competitions' employees. They already have the necessary skills.
  • Temporary employment services will screen applicants for you. Your staff will be employees of the temporary agency, and you will pay wages plus a fee.
  • Employment or placement agencies will also screen applicants and send only those deemed qualified for you to employee. The fee will be paid either by you or the employee.
  • The local Department of Labor office will advertise your position and screen applicants for you. The services are free.
  • The Northwest Georgia Career Depot will post your position. In some instances we may be able to train applicants at no cost to you or assist you with the cost of training inexperienced people. The services are free.
  • America's Job Bank is on the internet. You may post jobs with the local Department of Labor offices or enter job orders directly into the bank yourself. You may also review resumes of job seekers on line. The job bank has thousands of jobs listed from Department of Labor offices across the country. They also have links to employment services and temporary agencies. If you have a site on the internet where you post jobs, they will include a link to your site. The URL (internet address) is http://www.ajb.dni.us/.

Types of Business Organizations

You should consult your accountant and attorney for the type best suited for your business.

  • Corporation - a separate legal entity, has limited liability to amount invested and guaranteed, has separate tax liability
  • S Corporation - Same as corporation legally except income is reported to stockholders on Schedule K-1, reported as personal income
  • Limited Liability Corporation (LLC) - has partners with benefits of corporation liability
  • Partnership - two or more people in business together, each one liable for their separate share of taxes on income and each shares liabilities
  • Proprietorship - owner is personally responsible for all taxes, debts, and any other liabilities associated with the business

Capital

You will need a projected income and expense statement and a source of financing. Your personal credit should be good. It is important to have enough capital to operate a new business for some period without expecting to break even or show a profit. Sources of loans and/or information include input of individual assets, outside investors and financial institutions including banks, U.S. Small Business Administration, Certified Development corporations, University of Georgia Business Outreach Services, Georgia Tech Economic Development Institute, and Tennessee Valley Authority (TVA). Banks usually require that the principals of small businesses guarantee the debts.

Methods of financing include:

  • Internal Financing - major sources are suppliers, customers, real estate mortgages, refinancing equipment, and tight management.
  • Equity Financing - selling portions of ownership of your business to investors who may or may not participate in the management of the business.
  • Debt Financing - borrowing money from banks, savings and loan institutions, etc.

Government Regulations

You probably will have to register to do business. If using a trade name, you must register it with the Georgia Secretary of State. You may have to obtain an Occupational License. Check with your local city hall and county courthouse for required licenses. If your business is located in a county that does not require a license, you may still have to obtain a city license if you go into the city to do business and vice versa.

  • Check with your local city management or county commission for zoning requirements.
  • Contact the local Department of Labor Office for copies of the Federal Employment Security laws. Penalties can be heavy for failure to comply with the laws.
  • You must obtain a State sales and use tax number from the State of Georgia Sales and Use Tax Division.

Taxes

Obtain necessary forms and plan in advance to meet tax requirements. Required taxes or forms include Employer ID Number (SS-4); Employee Withholding Certificate (W-4); Wage and Tax Statement (W-2); G4-99; choose an account method - accrual, cash, or hybrid; choose a tax year - calendar or fiscal year; Tax Deposits for Federal and Georgia Income Tax, FICA Social Security and Medicare, Federal and Georgia Unemployment Taxes, Federal and Georgia Estimated Taxes, estimated Corporate Tax; Quarterly Federal Tax Return (941 Form); Annual Federal Unemployment Tax Return (DOL-4); Transmittal for W-2 (W-3).

Insurance

Obtain necessary insurance including liability and fire, product liability, group health and life, workman's' compensation, and vehicle. Workman's' compensation insurance is required in Georgia if you have three or more employees. If you have less and do not carry unemployment insurance, you are still responsible through self-insurance.

Your Market

Know your market. Is it very competitive? How does your product or service fit with supply and demand? Marketing research resources include the Department of Labor; literature such as magazines, journals, etc.; telephone, mail, or personal surveys; University of Georgia Business Outreach Services; and Georgia Tech Economic Development Institute.

Be careful when considering a totally new product or service. If no one else offers a similar product or service, be sure and ask why no one else is doing it. It is sometimes better to enter a market with established competition and do it better than to try to sell a new product or service for which there may be no demand.

Advertising

Advertising is a must for getting your message out to customers. You can explain the advantages of buying from you, boost your company's image, and promote name recognition. Ways to advertise include newspaper, radio, magazine, television, direct mail, bill boards, internet home page, premiums, incentives and advertising specialties, and word of mouth.

Some media outlets such as newspapers, radio, television, and internet providers will help prepare ads for spots placed with them. Professional advertising agencies can prepare artwork, plan advertising campaigns, and help with public relations.

Pricing

Keep track of what the market will bear (supply and demand). Check to see what your competitors are charging. Make sure your purchasing and inventory systems work effectively and in conjunction with your pricing system. Allow for a comfortable profit margin.

Public Relations

Look for promotional opportunities and send out news releases. Create attention by news-making events or occasions such as an open house, new product, sale, etc. Have a home page on the internet and keep it up-to-date. Always include your URL (internet address) in any advertising.

Information Resources

The University of Georgia Business Outreach Services, Dalton College, Dalton GA 30720 (706) 272-2707, fax 272-2701

Georgia Technical Institute Economic Development Institute, Dalton Regional Office, Dalton College, Dalton GA 30720 (706) 272-2702; serves Catoosa, Dade, Fannin, Gilmer, Gordon, Murray, Walker and Whitfield Counties

North Georgia Certified Development Corporation, Loan Officer, 503 West Waugh Street, Dalton GA 30720 (706) 272-2300; serves Cherokee, Fannin, Gilmer, Murray, Pickens and Whitfield Counties, may be able to assist in adjacent counties

Georgia Highlands College Small Business Development Center, Mr. Drew Tonsmeire, Center Manager, P.O. Box 1864, Rome GA 30162 (706) 295-6326

Georgia Small Business Administration, Laura Brown, District Director

Service Corps of Retired Executives (SCORE)

Publications and Reading

  • INC. - the magazine for growing companies
  • Business Age - the magazine for small business
  • Small Business Report - for decision makers in small to midsize companies
  • U. S. Small Business Administration - free management and technical publications
  • Superintendent of Documents - booklets for sale, some free
  • Entrepreneur - the magazine to inform and motivate

Good luck and keep your sense of humor!

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Revised: Friday, 14 November 2008 11:42 AM