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Eastland Economic Development Corporation
Eastland City Hall
113 E. Commerce Street
Eastland, Texas  76448

Phone: (254) 629-8321

 

 


 

Business Advisor for Entrepreneurs and New Businesses

Prepare
    Define the Product or Service
    Write a Business Plan
    Secure Financing
Register
    Check State Government Rules
    Get an Employer Identification Number
    Choose the Legal Entity
    Check National and Industry Specific Regulations
    Pay Taxes
Take free -- or, at least, low cost -- advice
Expand your client base
    Sell to the government
    Export
Reference Materials
 

Prepare
Careful planning may still not insure success, but lack of preparation means failure. Spend time before you spend money or other resources. Here are a few basic considerations. The Department of Economic Development also offers its own guide.

Define the Product or Service
What do you want to build or sell? Is this a true "invention?" Or is someone else already providing the thing? Can you make the widget better? Cheaper? How many people might buy it?
Write a Business Plan

Clearly formulate your idea for the business.
Describe as accurately as possible what you plan to sell. If you believe the item new or revolutionary, search for other patents. The U.S. Patent Office allows a search.

Examine the market.
How may potential buyers exist? What do you provide they do not yet have? Why will they want it? The US Census offers detailed population parameters, age, sex, levels of education. etc. The Bureau of Labor Statistics describes incomes.

Know your competition
Who else is providing the same, or similar, product? What are the barriers to entry? Even if you go into the market first and enjoy success, what prevents a rival from starting another such business? Open the Yellow Pages. Search the web. Read trade magazines. Consult industry groups. Seek information from local business associations or chambers of commerce which list companies and their type of activity.

The Comptroller records state sales tax information quarterly by county. By special request, you can also obtain quarterly data at the city (even zip code) county, and state level, sorted by Standard Industrial Classification codes.

Write a Business Plan
The plan tells not just what you want to do, but exactly how you will proceed. The plan develops a highly detailed forecast which itself becomes a schedule. You describe each part of the process and how to measure performance along the way: what to do first, then next, and how to know whether you have in fact finished each task. The length of time needed to complete different phases of the plan should be realistic--and followed closely. The plan imposes deadlines. Discipline evident in the plan, and the ability to execute accordingly, is crucial to convince others: buyers, suppliers, investors, and creditors.
Secure Financing

This document will present formally and systematically the ideas you developed in defining the product and market. While many variations exist, most plans include the sections outlined below:

Executive Summary
At the beginning should appear a concise description of the business, stating the main points, each of which is elaborated in the following sections.

Product or Service
A very specific definition is required here.

Market Analysis
Identify potential customers and competitors. Characterize the industry. Chart trends in the client profile. For example, is the target segment of the population increasing or decreasing?

Sales Forecast
Plan how much product and on what schedule you can deliver the goods, how long after final assembly to sell, when to be paid in full.

Finance
Estimate the startup costs, other costs--fixed (plant and equipment) variable (raw materials, labor, energy), storage, time after sale until payment, and operating capital to bridge the time.

Management
Describe the key people and how their personal histories fit the business. Find the right persons for sales, operations, and finance or administration.

Secure Financing
The business plan should contain cost estimates and projected cash flows. Do you have enough money to build the product and wait until you sell it? And receive payment after some delay?

Debt
Banks lend against collateral or cash flow. The entrepreneur might have no liquid assets such as property to pledge for the business. The new venture may not yet generate a stable source of revenue to service conventional debt. The Small Business Administration also provides help to early stage companies. An already going concern can gain approval for a loan against receivables.

Equality
The entrepreneur may decide to avoid debt by sharing ownership, giving some portion of his/her business to another in exchange for money invested in the enterprise. The National Association of Venture Capitalists promotes an industry with many members.

Grants
The Small Business Administration also maintains a database of federal grants. The Governor's office lists state grants in Texas. The Foundation Center provides information on grants to certain kind of businesses which meet the purpose of charities promoting social goals.


Register

Choose a name for the business. Obtain an identification number. Decide on the legal form. Discover which licenses or permits you may need, and what kinds of taxes you might owe.

Check State Government Rules
State and local governments may establish requirements in addition to the national regulations.

The Texas Department of Economic Development keeps a list of state regulatory bodies. The state also requires some public displays. The Texas Workforce Commission tells which posters, like frequency of payment (at least once a month) and unemployment insurance should be visible.

The The Texas Department of Economic Development also maintains a list of licenses or permitss needed for business activity.

Get an Employer Identification Number
Just as an individual possesses a Social Security Number, a business receives this one. The Internal Revenue Service assigns the numbers.

You can apply for the number at the IRS using Form SS4. You may need Adobe Acrobat.

The state Business & Commerce Code describes the use of a business name.

Choose the Legal Entity
Three basic forms of business organization exist: proprietorship, partnership, and corporation. The form defines ownership of the enterprise and liability for its actions. The Texas Legislature Online provides links to sections of the Commercial Code for different kinds of businesses. A new site at the Small Business Administration also explains legal terms in plain English.

Sole Proprietorship
An individual may choose to operate in this most simple form as a single owner. If he/she does not call the business by his/her personal name, then the enterprise name should be registered at the nearest County Clerk's office, which records the company name as the DBA and refers to the person "doing business as... "

Partnership
If the business has more than one owner, they may decide upon a partnership. The owners can share assets and liabilities equally, or in various proportions. A partnership agreement will stipulate the terms. Some investors may want to separate their personal property from the business assets. They can become Limited Partners. Limited partnerships are required to file organizational documents with the Secretary of State.

Other investors may bear full personal liability for the business. They are General Partners. General and limited partnerships may opt to register as limited liability partnerships in order to limit liability, but are not required to do so.

Corporation
A corporation can have one or many owners, whose personal liability is limited to their investment in the enterprise. Ordinarily, creditors have no claim to the personal assets of corporate owners in the absence of fraud or other types of wrongdoing. A corporation must also register with the Secretary of State.

IMPORTANT NOTICE: The information in this document is presented solely as technical assistance and as a resource available to entrepreneurs. The information does not serve as a substitute for legal advice or tax advice nor replace the independent judgment of an appropriate specialist. An entrepreneur should consult his/her attorney, accountant or other appropriate professional to answer specific questions about establishing various forms of business organizations, and the advantages and disadvantages of each entity.

Check National and Industry Specific Regulations
National government standards of health and safe practices apply to some industries, and private or professional associations' guidelines extend to others.

The company must also display publicly the basic business laws setting relationships between employer and employee. Public displays should include provisions relating to minimum wage, family leave, equal opportunity, polygraph, and migrant workers. Federal Contractors should, in addition, display rules about construction work (the Davis Bacon Act) and service contracts (the Walsh Healey Act).

You can read a more complete list of rules beyond the displayed fundamental rights at the U.S. Department of Labor.

The Occupational Health and Safety Administration sets standards for different industries and for firms of a certain size.

Other divisions of the Labor Department may, in addition, focus on specific issues.

The Small Business Administration now offers a section on laws.

Private member associations, such as the American Bar Association, American Medical Association, Association of Certified Public Accountants, etc., also regulate their practitioners.

National government standards of health and safe practices apply to some industries, and private or professional associations' guidelines extend to others. Laws also cover the relationship between employers and employees.

Pay Taxes
A part of doing business.

State Employment Tax
Some employers must contribute to the state unemployment insurance fund.

State Sales Tax Information for New Businesses
Sales taxes can reach a maximum 8.25%. The state levies an amount of 6.25% of the sale's price on qualifying items. The State also collects sales taxes for the cities and other municipal taxing authorities, which can reach an additional 2.0% combined, then rebates money to the local authorities.

State Franchise Tax
Corporations above a certain size in assets or level of income may owe franchise tax, a general business levy.

Other State Taxes
Please check for any other taxes on this index page.

Recent Changes to the State Tax Code
You can read changes to the laws here.

Ask Questions about State Taxes
Yes, you can speak to a real person or send e-mail and get an answer from another person. You can also visit any of the Comptroller field offices for help.

Federal Income Tax
The Internal Revenue Service offers special advice to small businesses about tax due.

Federal Employment Tax
The Social Security Administration describes the obligation of employers.


Take free -- or, at least, low cost -- advice

Several organizations, some government, some not, give advice about how to achieve profit in local markets.

Economic Development Corporations
Funded by a sales tax, these are government organizations which promote business in the locality.

Chambers of Commerce
These are private, non profit corporations which also promote area businesses.

Business Incubators
These may be publicly or privately owned--often connected to a university--organizations which help new businesses share costs like rent or secretarial service, under one roof. Many also offer management advice. After some period, the new companies then move to their own premises. The National Business Incubation Association and the Texas Business Incubator Association nurture new companies.

Small Business Administration Offices
These are U.S. government entities. The agency has many programs designed to help, including the SCORE, or Service Corps of Retired Executives who donate their time advising new managers.

The state also provides help to small businesses. Many local colleges and universities also operate small business development centers.



Expand Your Client Base

Sell to the government as well as to private clients. Find foreign buyers.

Sell to the government
The biggest customer of all needs a variety of goods and services.

Federal
The United States is a huge buyer of all sorts of things, but the special ways in which the government purchases goods and services can confuse the seller. Different agencies may have their own rules, and all of them adhere to a formal process of bidding; however, because of their large size, the entrepreneur could profit by learning more and winning a bid. The Small Business Administration has created a library whose highly readable short subject pamphlets provide a good introduction. The national General Services Administration gives additional help to small businesses or those owned by women and minorities.

State and Local
Texas purchases most items through its own Texas Building and Procurement Commission, which describes its process. Again, the state also offers special help to women and minorities. The Texas Marketplace gives additional information.

Export
Foreign markets present additional opportunity

Federal Help
The national government encourages American companies to seek foreign markets. The Department of Commerce provides a Trade Information Guide containing a list of trade offices around the country at which people can get help as well as information about particular countries. The federal government, also through the Department of Commerce, further promotes international trade by providing advice.

State Aid
The North American Free Trade Agreement brought significant change to the US economy. Mexico has become the second largest trading partner of the United States, after Canada, and most trade with Mexico flows through Texas. Export.gov contains data both for aggregate amounts and types of goods to different countries . The Bureau of Economic Analysis provides accounts of international trade in services.
The Department of Commerce also grants local authorities the permission to establish Foreign Trade Zones, in which customs clearance and other regulatory steps are greatly simplified and speeded.

International Agencies
Trade associations for different groupings of countries exist. The North American Free Trade Association includes the USA, Canada and Mexico. Mercosur comprises Argentina, Brazil, Chile, Bolivia, Paraguay, and Uruguay. Asean encompasses many nations in Southeast Asia. And, of course, Mexico has many links to the USA.


Reference Materials

Know where to get facts quickly, especially the same information you will want updated periodically.

The Texas Comptroller posts many economic statistics on its website.

The Comptroller also provides information about taxes.

The Texas State Data Center also keeps extensive records.

The Workforce Commission keeps statistics .

The Department of Economic Development offers community profiles and city links.

The Texas Department of Transportation has detailed maps.

The Texas Department of Agriculture offers assistance.

The Texas Legislature Online posts the Business & Commerce Code.

 

 


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