Small Business Frequently Asked Questions (FAQs)
Review the most common questions asked when starting a new business and learn what the answers are below.
Thanking our supporters of small business
- Do I need to register the name of my business? If so, how do I go about it?
- Do I need to trademark my business name?
- What is a Tax I.D. Number? Do I need one?
- How do I finance my business?
- How do I manage business credit?
- Do I need a license to operate my business?
- Should I incorporate?
- Which business expenses can I deduct for income tax purposes?
- Do I need special insurance for my business?
- What is OSHA?
- How does franchising work?
- What are some cost-effective ways for increasing sales?
- How can I promote my business offerings at no or low-cost?
Do I need to register the name of my business? If so, how do I go about it?
If you are doing business under any name but your own, you are required to register with the Secretary of State. This requirement enables people to identify who is operating a particular business. For information on how to register your name, visit the Secretary of State's website at www.michigan.gov/sos
. You can also call 517-322-1460. The Michigan Secretary of State's office is located at Lansing, MI 48918.
Do I need to trademark my business name?
Registering your business name is not the same as securing a trademark for your business name. A trademark is a form of intellectual property that provides you with rights about how your business name may be used. Trademarks may also be obtained for specific words, phrases, logos, symbols, designs, images or a combination of these elements.
Similar to registering your business name, you may conduct a trademark search to learn if your business name has been trademarked by someone else.
The United States Patent and Trademark Office, also referred to as USPTO, offers a free screening tool within a Trademark Electronic Business Center to assist with determining if your business name has already been trademarked.
A trademark is denoted by the trademark symbol, which is TM, or alternatively by the federal registration symbol, which is , if an actual registration filing has been approved by the United States Patent and Trademark Office.
What is a Tax I.D. Number? Do I need one?
How do I finance my business?
There are many ways to finance both the start-up and growth of your business. For start-ups, the most common funding sources include personal credit, family and friends. The U.S. Small Business Administration (SBA) also offers various loan products
whereby a lender provides the actual loan to the borrower and the SBA guarantees a portion of the loan (between 50%-90% depending on the program) acting much like a co-signer. This helps lenders be more comfortable with a loan that they might otherwise not approve, such as a loan for a start up, or a borrower that has less collateral than a bank requires.
There are other types of business financing tools that facilitate access to capital under certain circumstances. For example, if you possess commercial real estate, you can borrow against the value of the property using a small business commercial loan.
If you have been in business two or more years and have a history of accepting credit cards as a form of customer payment, you may be eligible for raising capital against the value of those credit card revenues. This cash advance is satisfied by making payments as a percentage of future credit card sales. Investigate Merchant Cash Advance to learn more.
A further innovative approach suited to financing growth without giving up equity is to utilize a process called factoring. Factoring refers to the process of selling your accounts receivable invoices to a third party who then performs the function of collecting the invoice. Called factors, these agents can move quickly to get funds to a business for a fee as a means of providing financing for growth. Visit Factoring (finance) to learn more.
How do I manage business credit?
Business credit involves the strategic management of business charge and credit card services. Properly managed, these services can provide convenient access to working capital, robust online business tools and purchasing discounts that help to improve your businesses purchasing power, spending flexibility and expense control.
There are various types of charges and benefits associated with utilizing business credit tools including various annual percentage rate charges and other fees, as well as various reward programs, such as travel, shopping discounts, airline incentives, dining discounts, business supplies and more.
It is important to know what your options are so that you can select the most appropriate business credit tools as well as savings and reward programs.
Do I need a license to operate my business?
Obtaining a license to operate a business depends on the type of business as well as the location of the business. To learn if your business requires a license, visit the local town hall to learn what the requirements are. The State also requires that certain occupations and businesses be licensed. For information and an alphabetical listing of licensed occupations, visit www.michigan.gov/medcguide/0,1607,7-149-9276---,00.html
Should I incorporate?
There are several forms of business organizations: sole proprietor, partnership, corporations, and limited liability companies. Legal liability, income taxes, protection of assets, and ease of transfer are some of the issues affected by the form of business organization. In order to decide upon the best solution for you, you may view the Business Entity Matrix
Which business expenses can I deduct for income tax purposes?
Generally, all the expenses you incur to start and operate your business are
deductible. However, many are subject to various IRS rules. For example,
start-up costs, vehicle expense, meals and entertainment, and use of a home
office are subject to various guidelines. Start by reading IRS
such as the Small Business Forms and Publications
If you are a sole proprietor, the tax return is a Schedule C.
There is also a section of the IRS web site devoted to small
businesses, or you may call them at 1-800-829-4933. A local CPA (certified public accountant) office is also typically a valuable resource on this topic.
It is very important to set up a good bookkeeping system immediately upon going
into business. Depending on the size of your operation, a manual bookkeeping
system, such as the Dome Simplified Monthly Bookkeeping System, or the
One-Write Bookkeeping System, can be a productive approach. Both of
these options are available at most office supply stores. One Write is
also available in a computer-based format along with other options, such as
Quick Books. It is highly recommended that you become familiar and stay
in tune with the bookkeeping characteristics of your operation before you
consider outsourcing this function to a local or Internet-based bookkeeping
Do I need special insurance for my business?
It is wise for any business to possess a general business insurance policy, which includes liability and other standard coverage. Your place of business, if you own it, should be insured; and if you rent, you still should possess your own coverage. Don't rely on the landlord's insurance.
If you have one or more employees, you are required to have worker's compensation insurance. Depending on your industry -- for example, food service requires product liability insurance -- you may need additional types of insurance. If you already have insurance coverage, begin investigating coverage options and requirements with your present agent. Obtaining quotes from several agencies is also recommended, being sure to compare both coverage recommendations AND price. Other types of insurance include KEY PERSON INSURANCE, FLOOD INSURANCE, FIDELITY & SURETY BONDS, BOILER AND MACHINERY INSURANCE, PRODUCT LIABILITY, BUSINESS INTERRUPTION INSURANCE, OVERHEAD EXPENCE, DISABLILITY INSURANCE, AND LIFE INSURANCE.
The Bureau of Insurance, within the Department of Professional and Financial Regulation, regulates the insurance industry for solvency and consumer protection. It does so through its examining and licensing procedures of insurance companies, by licensing producers, by reviewing rates and coverage forms, conducting audits, and by sponsoring programs that enhance awareness of and compliance with State laws. The Bureau has statutory authority to enforce the State's laws and rules pertaining to insurance, and it initiates investigations and holds hearings concerning possible infractions of them. For information about licensed insurance companies, visit http://www.state.me.us/pfr/ins/ins_insurance_company.htm. To contact the Bureau, offices are located at Department of Professional and Financial Regulation, Bureau of Insurance, #34 State House Station
Augusta, ME 04333-0034. For mail service, write to the Department of Professional and Financial Regulation, Bureau of Insurance, 124 Northern Avenue, Gardiner, ME 04345, or call (207) 624-8475, Toll Free (800) 300-5000 (in state), or Fax (207) 624-8599. For a staff e-mail list, visit www.state.me.us/pfr/ins/ins_dir.htm.
What is OSHA?
The U.S. Department of Occupational Safety and Health Administration (OSHA) is a federal agency that oversees workplace safety. All employers are required to provide a safe and healthy workplace and are subject to safety and health inspections by OSHA without prior notice. Employers with more than ten (10) employees are required to maintain a record of injuries on the OSHA 200 form, which must be made available for inspection for a period of five years. For more information about workplace safety and OSHA requirements, contact the Michigan Department of Labor Occupational Safety and Health Administration at 860-566-4550, 801 South Waverly Road, Suite 306, Lansing, MI 48917. Goto www.michigan.gov/dleg
, which provides specific links to a variety of regulations and compliance information.
How does franchising work?
Franchising is a business model that involves purchasing a license to operate a specific, established venture that typically includes using well-known trademarks, signage, products, software and a pre-proven business system to support your ultimate business success. There are advantages and disadvantages between choosing to launch your own business idea and buying into an established franchise. Visit Small Business Franchise Opportunities
to learn more.
What are some cost-effective ways for increasing sales?
Marketing is a key element of any business growth strategy. It involves understanding who your target customers are and how to communicate with them effectively in order to motivate them to buy from you. For many businesses, this process includes communicating directly with prospects by email, phone and snail mail. This is called Direct Marketing.
Direct Marketing often includes purchasing lists of prospect names, addresses, phone numbers, email addresses and other profile data based on different sets of criteria. By working with a quality list provider, such as mySalesHero.com
, your business can access thousands of qualified sales leads that represent consumers or businesses who are ideally positioned to purchase your goods and services. Direct Marketing can be a cost-effective strategy for increasing sales as a small business because you only pay for what you need, when you need it and how you need it.
How can I promote my business offerings at no or low-cost?
Use no-cost online service
to create compelling sales and marketing online video presentations. Easy-to-use, self-service authoring tool lets you combine slides, images, video, surveys, documents and voice to produce effective business communications.