Call Us at:

(718) 485-6643

(347) 312-2006

or e-mail us now at:

business@jmcworld.com

Welcome to

Powered by James Management Consulting, Inc.^®

...Helping To Take Your Business To The Next Level

Sign Up for a jmc.world.com Membership. Get Unlimited Access to our Business Development Center

24 x 7

from anywhere

in the world

More Info...

Food For Thought

The information on this page has been designed to give you insights on things you may need to reflect on before and after you implement your business. 

Before you use it, be sure to test them for relevance to your business development needs.

jmcworld.com

Menu of Business Topics

Before you start your new business, it is important for you to do some preliminary planning. This would enable you to reflect on what you are about to undertake,  the type of business you intend to build and other important issues. Here is a checklist of things that you may want to examine during this important reflective and start up  phase. Whether you are a for profit or non profit business, this information should work for you.

 Tips:

 1. Determine the purpose and the structure of the business you want to implement. Hold initial planning (possibly informal) meetings to establish consensus with your collaborators, if any, on the type of entity you will implement, the purposes for which you are forming the entity and the manner in which you are going to approach its  implementation.  If you are doing the business with others, delegate responsibilities for:

•  Raising the initial capital for preliminary activities such as:

1.      Cost of Incorporation

2.      writing of business plan

3.      Other necessary pre-startup costs

4.      Consulting fee for advice on the startup and future

        dimensions of the business

• The drafting of bylaws for the entity,

• filing for the business’ incorporation, partnership or the type of business you intend to implement,

• developing a program plan and budget, and

• Planning for fund raising

 2. Form a preliminary or ad-hoc executive board and a board of directors for the entity.   Let this Board authorize and accept the articles of incorporation and file for same, authorize the filing of tax-exemption application, all  initial start up financial transactions, Where the entity you are setting up is a non profit entity, a formal board of directors is required for incorporation and is desired by those considering initial funding proposals.  

3. File articles of incorporation, partnership or other type of business you intend to implement.  Where you are a non profit organization,  most funding sources, because they may wish to claim the donations that they make to the entity as deductions on their federal and state income tax returns,  deal only with organizations that are incorporated as nonprofits.

4.  Draft bylaws.  

Since these make up the “rulebook, guidelines’’ for running an organization, it is helpful to draft them during the early stages of the entity’s development.  Moreover, bylaws must accompany the organization’s application for tax exemption.  With respect to non profit organizations, bylaws should be drawn up to show the rules and regulations by which the organization and its members would be governed. For more on bylaws, see our tips on the dynamics of these elements in our business tips section.

5.  Initial Planning for your business: Determine the preliminary cost of implementing your business. The initial planning of an entity could contain hidden costs that you need to consider. Some of these are:

1. Charges for a professional business consultation with an expert business advisor who understands the type of business that you are about to implement, which should include possible difficulties you may encounter on the way, licenses or permits you may need to acquire to do the businesses, turn around time for positive cash to begin to flow, initial costs you are likely to incur even before you begin your operation etc.

2. Charges for the preparation of a business plan, or projection,  for the entity.

3. Charges for the preparation of a relevant budget, or financial guideline for the entity.

4. Unofficial management pay;  At this juncture you may need one or more of the executives to spend  lots of time planning the entity. You may need to get plans written up. Does such  a  person or people get paid for their time.  Resolution may have to be set up to deal with this.

• Design and develop  written objectives, a work plan, separate from the entity’s business plan showing how that the organization intend to work towards such as exactly what the business will be doing, when it will begin in earnest, the cut off time to begin, which will determine when costs will begin to be charged on the implementation of the entity. This plan should be for a one year period or more. This is important.

• Develop a budget.  This is one of your most important agenda and should be done for the initial year of the businesses and every year thereafter. It allows you to anticipate expenditures that would be made by the entity, and income that you can expect to acquire for the first full year and thereafter.

• Before you implement your business, securing initial and working capital is vitally necessary. You should be aware of what this is.  That is, how much it will cost to initiate the start up activities of the entity such as consultancy fees, cost of business plan, payroll costs for start up management before sales of product begins.  Check on our tips on acquiring capital to start a businesses sector. With respect to non profit organizations, you need to have laid out how you would raise funds to implement the organization.  This could be approaches as follows:   Draft a fund-raising plan.

•  Determine appropriate sources from which to seek startup and working capital, outline approach to sources, and project a method by which such would be acquired.-See possible sources of capitalization on this.- Make the organization formal by holding formal   meetings on the development of the entity.  Here, it is at one of  these official meeting  that the board of directors  adopt the bylaws, elect corporate officers, accept the articles of incorporation and file for same, authorize tax-exemption application, authorize initial start up financial transactions, and continue program planning.

• If you haven’t done this as yet, file for the entity’s federal I D # if in the US or other necessary ID # in the country where the business is  domiciled. In the US, this # parallels the social security number of an individual. This is the number that the government uses to   identify your business. It  will last for the life of the entity.

• Sub Chapter S Status: If you are a US based business, this is one of the most important privileges that the I RS gives to small and medium sized businesses or businesses that are owned by individuals. Simply put, it allows corporate owners to avoid double taxation by claiming the profits or losses incurred by their business on their personal taxes. There are stringent rules to be followed as conditions for getting this status. It must be filed for and approved by the Internal Revenue Service. Check The IRS Code on the IRS website on the rules about this status.

• Record Keeping:  Establish a recordkeeping system for preserving the    record that will be used in the implementation of the operations of the entity.  The official corporate documents such as agreements, records, bylaws and other important documents must be preserved for its life cycle. Such records may be kept in a fire proof environment of the choosing of the board of Directors of the entity.  

The 501 (C) (3):  In the US, if you are a non profit organization, File form 1023 application with the Internal revenue Service to obtain 501(c)(3) tax exemption from corporate income taxes.  This frees donors from having to pay  taxes on funds donated to the organization and, in essence, makes it “fundable.”

 File charitable trust registration with the state.

Apply for necessary permits such as authority to collect sales taxes and  other permits and licenses that are necessary to operate the entity, from the national government or your local authorities, in accordance with the type of business you are operating.    Check with local regulatory offices such as education department, department of l licenses  of the municipality t in which the organization is doing business   whether a license is necessary.

Bookkeeping or Accounting: Establish a relevant bookkeeping or accounting system. When you get together up to the first few months of operation, only a simple system may be needed until the organization begins to develop its activities on a large scale.   However, you should, in anticipation of the organization’s financial recordkeeping needs at  later stages of its operations, develop an accounting system with which the entity could address such needs.

Procurement:  Government spend most of their budgets purchasing goods and services.   Most importantly:

• begin to establish a rapport with the procurement centers of the government and big businesses.
• Certify your business and get on its bidders list to seek after some of such contracts that accords with the services you are offering.  For more on this, go to methods for procurements from government and business.
• Develop and submit Request for proposals fund-raising proposals. 

• Check out governments grants to see which none you could apply for. Government grants  may be solicited when incorporation has been established.  Where you are a non profit organization, solicitation of private foundation grants will not be very successful before the Internal Revenue Service formally recognizes the organization’s 501(c) (3) tax exemption by sending out a letter of determination.

Monitor the appropriate authorities about if or when you need to file appropriate documents such as IRS yearly taxes, sales taxes, payroll and other necessary statutory forms  with the authorities. 

Decide about Social Security contributions.  If the decisions are yes, notify the Social Security office, since all 501(c) (3) organizations are automatically exempt. Remember, even though you may be exempt from paying taxes, you may need to file reports with statutory authorities. Check this out whit them.

 If you are a non profit entity, upon receipt of federal  exemption,  check with the state to see if you need to secure state income tax exemptions.

Apply for state sales  tax exemption.  The organization will receive a certificate of exempt status with its sales-tax exemption number. If you are going to sell things to the public, apply for a resale certificate  from the state so that you are not charged  taxes on purchases that you will resell to the public, especially from wholesalers.

After you begin to operate, Register with state unemployment insurance program.  This is done through the state department of employment.  Also, apply for  State workmen’s Compensation and disability programs for your employees. 

Apply for necessary property tax exemption, if appropriate, with local tax assessor’s office.

 Set up employee benefit plans

Obtain liability insurances.  Such insurances covers the organization property and its products, and insures the organizations against personal injury suits by clients and guests.

If you are going to use the mail a lot, apply for nonprofit bulk mail prevent from post office.  Such a permit is beneficial if the organization plans mailings of over 200 pieces of material.

Develop personnel policies.  This should be done even before you begin to operate in full, or within the first year of operation.

Get the company moving.  Relevant Staff must be hired, space rented, and program activities started. The board of directors, by declaration,  must determine when the business  actually begins.

Good luck.

JMC

Business Directory

James Management Consulting, Inc. is a business consulting and accounting firm. 

We do NOT provide legal advice.  For a list of the business services we offer, CLICK HERE.

Terms        Privacy