I have a home-based business. Does my homeowner's insurance cover my business?

Generally, your home insurance does not anticipate providing coverage for a business. You may be able to obtain endorsements to cover some business losses, however, a small business package with liability coverage and business interruption coverage, and other important features will probably only cost you between $250.00 and $500.00 per year.

How do I find the norm for business expenses by type of business?

There are several Internet sites that offer this type of data. RMA (formerly Robert Morse Associates), www.zone6.com/bizstats, http://www.roi.com/ (this is the Retail Owners Institute). Search the web and you can find significant data sources, however, most of them now have a charge or membership fee.

What do I need to do before hiring my first employee?

It's a good idea to have these items in place:

  1. An employee handbook - This is a set of workplace rules and policies you want your employees to follow. It also explains the company policies regarding paid time off, jury duty pay, disciplinary actions, benefits, and such as well as policies to insure compliance with laws regarding sexual harassment, drug-free workplace, antidiscrimination, Americans with disabilities, and so forth.
  2. Job descriptions - This outlines the major duties and job-specific expectations. It's a good idea to mention that there is flexibility here...cross-training of staff and other (minor) task assignments may be given.
  3. I-9 forms. You can get these from the Citizenship and Immigration Service at www.uscis.gov/files/form/I-9.pdf

Also, it's helpful to download the wage and hour rules from your state's Department of Labor. You can also download the required federal and state workplace posters. Most states also have a helpful compliance guide, as well as wage surveys. Useful Oregon sites are www.oregon.gov/BOLI and http://www.qualityinfo.org/ For Washington, visit http://www.lni.wa.gov/ and www.dol.wa.gov/business/hire.html For federal labor laws and helpful hiring information, visit http://www.dol.gov/ and their online "law advisor" at www.dol.gov/elaws/firststep/

What accounting system should I use for my new business?

It's hard to give a clear answer without knowing more about your circumstances, but we can offer some general guidance. We believe that you should begin with a computer-based accounting system. The costs are modest, it will save you tremendous time compared to manual systems, and the same computer will be important in your business in many other ways. For small companies, the choices of accounting software are becoming somewhat limited due to the clear dominance in the market that QuickBooks enjoys, although Peachtree is another good alternative. If you expect your business to remain simple, using cash-basis accounting, you should consider Quicken Home & Business as a simple alternative to QuickBooks or Peachtree. SCORE can help you with the choice of software, and we offer courses to help you get started with QuickBooks and Quicken Home & Business.

Sales in my commercial house painting business have dropped over 25% over the past two years. I have made cutbacks in personnel but, I am still having cash flow problems. How can I address the cash flow problems and increase my revenue?

Review all expenditures to determine what is absolutely necessary. Continue to look at personnel cuts. It may come down to the point where you are the only employee until sales justify hiring or rehiring personnel. Start contacting prior clients and remarketing your services to them. They are your best prospects. Let them know that no project is too small. Face-to-face contact is best. This will give you an opportunity to comment on specific problems or job opportunities. Think of your business as if you were just starting. One client at a time.

Where do I register a new business in Oregon?

http://www.filinginoregon.com/ will open the Oregon website for registering your business. This is where you can file the initial registration for a new corporation and LLC or for an Assumed Business Name. The “Business Wizard” is particularly useful to help you register properly with all of the regulatory agencies that affect your business type.

What is an Employer Identification Number (EIN)?

An Employer Identification Number (EIN) is a nine-digit number that the IRS assigns in the following format: 00-0000000. The IRS uses the number to identify taxpayers who are required to file various business tax returns. EINs are used by employers, sole proprietors, corporations, partnerships, nonprofit associations, trusts, estates of decedents, government agencies, certain individuals, and other business entities.

How can I find out what my competitors are making in profits and how successful they are?

It will be difficult to find out exactly what the competition's profits are. However, talking to prospective customers and competitor's employees will give you some information on how successful they are. Talking to competitive businesses that are located in a different area than where you are or will locate often produces more information because your business will not be a threat to them. Industry trade associations or your accounting firm can refer you to companies in your industry and market that may be willing to share information with you.

Would having a partner make it easier to be successful?

Having a business partner will not guarantee success. However, if you require additional management skills or start-up capital, engaging a partner may be your best decision. The ultimate success of a partnership depends upon the personality and character of the partners. Successful partnerships usually result when partners complement each other so that a weakness in one is a strength in the other. If you decide to have a partner, make sure that each of you has a clear understanding, in writing, of the responsibilities and rights of each partner.

Q&A - General Business