Planning, taxes and insurance tips to get your new business off to a successful start

(ARA) - With the unemployment rate at an all-time high, many people are starting their own businesses as a way to leverage their work experience. Starting a business is an industrious undertaking. Even the smallest home business has quirks and pitfalls that can make or break it. There are a lot of resources for those starting a business, but sometimes the sheer number of resources and the amount of input can be overwhelming.

Here are some basic tips around the three major aspects of starting a business: planning, insurance and taxes.

Planning:
The first step to starting any business, no matter how small, is to create a business plan. Business plans address your competition, create action steps that keep your progress on target, prompt you to develop fiscal expectations and potential while identifying financial need, help you create a marketing plan, and help you work through any potential pitfalls before you encounter them.

Resources:
Microsoft.com has many templates for business and marketing plans. For more detailed information on writing them, visit the U.S. Small Business Administration Web site.

Insurance:
Every business, from the small jewelry company working out of a spare bedroom to the dog-walking service to the new neighborhood deli, has a need for insurance. The first insurance need is about protecting you, the business owner, from liability. Do you need liability coverage or errors and omissions insurance? Many people think that just incorporating their business keeps their personal assets safe from lawsuits against the business, but this is not always the case. Also, if you left corporate America, did you lose your life insurance coverage for yourself and your family when you left? The second insurance need is about protecting your family. If your family is under-protected, talk to a life insurance professional about replacing your previous group coverage with individual life insurance. Visit www.sbli.com for information on affordable individual life insurance coverage.

Once your business is moving forward, your next insurance consideration may be for continuation of the business after the death of a vital employee or one of the owners. Considerations include key person insurance to protect against the death of a key employee or a buy-sell agreement with a business partner. Not only do these protect the business, but they also protect the owners and the family of the business owners.

Resources:
Recommended reading is Jonathan Pond's guide "Life Insurance for Small Business Owners" which can be found at: www.sbli.com/jpond_guides. Jonathan Pond is a paid spokesperson for SBLI. For your life insurance questions, an insurance agent is always a good resource. Contact an SBLI insurance professional at (888) GET-SBLI or visit www.sbli.com.

Taxes:
Choosing to structure your business as an "S" corporation, a "C" corporation, an LLC, or an LLP will have a big impact on the taxes you pay as a business owner and as an individual. It will affect the way you treat profits, the expenses you can deduct and more. In addition to determining your corporate structure, decide whether to use the cash accounting method, in which you pay taxes only on invoices that have been paid, or an accrual method, in which you pay taxes on invoices as they are sent. This decision affects loans and funding for your business, as it will change the income you report in your income statements.

Resources:
A CPA and an attorney specializing in business incorporation will help you determine the best corporate structure and accounting method for your business. You can also consult the U.S. Small Business Administration and the IRS Small Business Tax Center.

SBLI and The No Nonsense Life Insurance Company are registered trademarks of The Savings Bank Life Insurance Company of Massachusetts, which is no way affiliated with SBLI USA Mutual Life Insurance Company, Inc. SBLI products may not be available in all states.

Courtesy of ARAcontent