STEP #1 - CHECKLIST FOR STARTING A SMALL BUSINESS
– Evaluate and develop your business idea
– Decide on a legal structure for your business – Choose a name for your business – Prepare organizational paperwork – Find a business location – File for licenses and permits – Obtain insurance – Set up tax reporting and accounting – Hire workers – Register and prepare procedures before hiring employees – Complete these tasks each time you hire a new employee
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Overview
Takes these tasks very seriously! Each of these steps play a key role in the overall success of starting and maintaining the stability of your new small business.
STEP # 2 - PARTNERSHIP AGREEMENTIt can be very profitable and smart to use partners to accomplish your business goals more rapidly.It is very common among successful business people to entertain some form of partnership.
Q. Why would you get a credit partner? Credit partners go into business with you and, among other things, supply you with the credit and personal guaranties you desire. EXAMPLE CASE STUDY: A business person named Billy did not have good enough credit to qualify for a credit line from the bank. So, he decided to go into business with Bob, a friend of his whose FICO score was over 700. Billy gave Bob the majority of the stock in the corporation, and Billy started applying for loans. Bob was approved for a $50,000 loan within weeks. Q. How much of the company's stock does the credit partner need to own? Depends on the institution at which you are applying for credit -generally somewhere between 75% and 90% of the stock of the company should be owned by the credit partner. Essentially, if your credit is not the best, and you recruit a business partner who has good credit, if your partner owned at least 75% of the stock, you would be able to qualify for all kinds of business loans that required personal guaranties. Because your partner owns the majority of the stock, they use only his/her FICO score -not yours. Q. Does this effect personal credit? IT DOES NOT. The loan that will be obtained will be in the name of the Corporation or LLC. The good credit will guarantee the loan, but the money is actually loaned to the Corporation or LLC, so the balance won’t show up if someone runs a personal credit search, and the revolving debt won’t negatively affect the personal credit at all. |
STEP # 3 - HAVE AN AGED CORPORATION/COMPANYBasically a shelf or aged corporation is a company that has been in existence for a period of time before you purchase it. Most people purchase shelf corporations so that they have an earlier start date of their corporation, for credibility and credit building purposes.
Common reasons for buying a shelf corporation include: -Saving the time involved in taking the steps to create a new corporation. -Gaining the opportunity to bid on contracts. Some states require that your company be in business for a certain length of time. -Creating an appearance of corporate longevity. -Access to investment capital. -Easier access to corporate credit. Click Here To View Steps 4-6 |