Part 11 ~ Acey Gaspard’s Guide to Starting a Small Business – Made Simple
Not Knowing the Rules is No Excuse
Lenny got his business up and running in record time. He was making sales, building a strong customer base, and enjoying a rather quick success, only to find some visitors from his local municipality informed him that he was in violation of significant safety regulations.
Unfortunately for Lenny, the consequence wasn’t a mere fine; he was forced to shut down. Lenny was a smart guy with a great personality. His mistake was failing to find out about the rules before putting all his time, money, and effort into his business. You can avoid this by taking the time to get accurate information about your business.
Business is simple if you make it that way, and catastrophic if you play it by ear. Making it simple means playing by the rules, and you can’t play by the rules unless you know the rules. Every business and area has different standards, so it’s your job to find out what applies to your business.
Dealing With Different Levels of Government
You have to keep in mind at times that you’re dealing with different levels of government and may need to contact various departments. You may need permits, you may need to look into zoning, you may need to register for a tax ID, and so on. Then there are regulations for health, food, natural resources, product packaging, and many other things.
To simplify the process of finding out what regulations apply to you, get clear about your business characteristics.
1. Write out exactly what you plan to do in your business: manufacturing, retail, sales, consulting, etc.
2. If your business deals with products, make a list of them: software, electronics, food, etc.
3. List the characteristics of your business, for example, you have walk-in traffic, you have delivery trucks picking up and dropping off 24/7, you manufacture a product, etc.
Now that you’ve defined a few characteristics of your business, you need to contact your local department that deals with business development and registrations and get the information you need. Many such departments offer products like home business kits and business startup guides.
To find the information relevant to your business in your area, go to your favorite search engine and type in:
Business Startup Guide City State
(e.g., Business Startup Guide Detroit Michigan)
This should get you the information you need. Once you have the guide, go over the critical issues, and contact an official from the local department for any questions you may have. Be sure to get the documentation to back up the answers you receive. In other words, if the person on the phone says that you don’t need to collect taxes on children’s clothing, ask for the section of the regulations that indicates this so you can add it to your records.
It’s also a good idea to sign up for any newsletters or mailing lists that might be offered, so you can stay up to date with any changes.
Once you’re clear about what you’re required to do, you can get professional help to complete the necessary registrations or complete them on your own.
Once you’re set up and legal, it’s smooth sailing with regard to rules and regulations. The key is to know the rules before you start, not after. The only way to succeed in this area is to play by the rules from the beginning.
Action Steps to Play by the Rules in Business
- Identify what type of business you want to get into. At the very basic, identify the industry, product, and/or service you wish to provide and where.
- Do a quick online search for any city or state document regarding setting up your business.
- List any questions you may have.
- Call or visit your local government department dealing with business development and registrations. Ask your questions and ensure that the answers you get are supported by existing legal documentation. Otherwise, you still run the risk of violating laws without realizing it.
Important Points to Play by the Rules in Business
- Ensuring that your business is running legally, should be one of the first things you do when establishing a business. Otherwise, you risk investing a lot of time, energy, and money in a business that might be shut down.
- Every business has its own set of rules, so don’t fall into the trap of consulting a friend or relative who runs a different business than yours. Different areas/locations have different rules too!
- It’s not hard to find out the rules for your specific business. Simply do an online check or visit your local government agency responsible for business registration.