Business Practices INDS2240
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This 3 page Class Notes was uploaded by Moriah Kemp on Saturday July 23, 2016. The Class Notes belongs to INDS2240 at Chattahoochee Technical College taught by Ginger Burton in Summer 2016. Since its upload, it has received 11 views. For similar materials see Business Practices for the Design Profession in Interiors at Chattahoochee Technical College.
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Date Created: 07/23/16
Starting Your Own Business – Entrepreneurial Skills Even if you are not planning to start your own business, it is important to know and understand how a business works so that you can intelligently communicate with overseers and bosses. Especially when it comes to asking for a raise. Character skills needed: o Excellent communication skills o Self motivation o Being willing to do it all o Time management o An understanding of the industry and market o Management skills o Organization o Patience Where to start? o Write a business plan! Includes: targeted clientele, pricing, location, reasons for beginning business Every detailed area of your business written down on paper May further encourage you or discourage you from owning and running your own business When writing, professionalism is key! Important for the first year of business How to write a business plan 101 (SCORE is an excellent resource available for when you are ready to write your business plan): Cover sheet (name of business and contact info) Executive summary o Synopsis of the business plan o Description of the business, market (how are you going to advertise), competitive advantage (what makes you stand out from the rest), your management skills, and if necessary, financial request (only needed when applying for a loan) o Highlight your strengths! Table of contents Body of the document o Four major categories: 1.) description of business Includes: professional background, type of business, services and products, business profile, location 2.) market analysis and competition Includes: industry, target market, competition, marketing strategy 3.) management and operations Includes: business structure, registrations, taxes, licenses, permits, business insurance 4.) financial data Includes: start-up cost estimate, break even analysis, forecasted income statement, cash flow forecast, balance sheet Key Concepts: The business is not the location! o You could work out of your home, rent a space, or own property – no matter what, if youare charging people for your services and therefore paying taxes, you are your own business o Home-based business Due diligence is necessary for researching local zoning ordinances. Some local zoning ordinances do not allow home-based businesses. Research any restrictions or covenants prescribed by homeowner’s associations. Must comply with current municipal codes. Business Formation o Sole Proprietorship You want to start selling something or charging people for your services Your business is you and your social security number On April 15, you put down what you earned that year as income and pay taxes on it If you get sued, they can take everything. It'sall onyou. It's your social security number andyour bank account. Not recommended by the business community o LLC (Limited Liability Corporation) Not related to your income taxes Separate from your social security number The business is taxed, not you personally You personally fill out a tax return, and the business fills out its own tax return Limits the liability on the individual Recommended by the business community o Partnership Tricky situation Arguments are likely to arise Someone will always rise as the leader o C- or S-Corporation Big business Not what you do starting out Requires years or experience Details on taxes: You charge tax on product, not service! o If you are only providing a service, no need to factor in tax when charging clients. If however you buy product for your provided service, you may want to factor in the cost you spent paying taxes on the product into the fees you charge your clients. Meaning, if you buy a product and then use it for your client, you are the end user. You paid tax when you bought the item so no need to charge your client tax. However, you spent money on that tax and you may want to consider somehow getting that money back by factoring it into what you charge the total cost to your client (the client does not need to know this information). Filing income tax o By April 15, you or your business must file the amount of income you made the previous year through your service. If you fail to do this, the IRS could potentially come after you for not recording that income. Because you must file you or your business’s income, it is extremely important to keepa detailed record of every client and their payments to you. This can easily be done on an excel spreadsheet. Keep good records to protect yourself. If your business is through your social security number, this is crucial! If it is its own separate entity, it is still needed in order to protect anyone from suing your business for liability. Liability: protects against being sued for unintentional harm inflicted on someone. For example, in the cosmetology world, this can refer to a manufacture’s product causing harm to someone (product causing a rash, product getting in someone’s eyes and causing vision problems, etc.) without malicious intent by the manufacturer or cosmetologist. Research getting a business license! This is 100% needed to protecting yourself. A business license is needed no matter what the business, where it is located, or who is running it. Even home-based business entrepreneurs are required to obtain a business license.
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