Small Business Is Working For You!

Understanding Fair Practice

February 2012

While many businesses will do almost anything to gain an edge on the competition, it is important to understand antitrust laws so that you do not risk your business's integrity while gaining customers. Antitrust laws make it illegal to conspire to restrain trade or commerce in any marketplace, regardless of size. While small businesses often fall victim to the unfair business practices of larger companies, they can be prosecuted for unfairly dominating markets localized in cities, towns, neighborhoods or niche industries.

Antitrust laws address the following:

Conspiring to Fix Market Prices:
Discussing prices with competitors, even if it affects a small marketplace, may be construed as a violation of antitrust laws.

Price Discrimination:
Using dominant industry power to secure favorable product prices from buyers, even though such prices are unavailable to weaker companies in the same industry, is generally a violation of antitrust laws.

Conspiring to Boycott:
Conversations with other businesses regarding the potential boycott of another competitor or supplier may violate antitrust laws.
Conspiring to Allocate

Markets or Customers:
Agreements between competitors to divide up customers, territories, or markets are illegal. This provision applies even when the competitors do not dominate the particular market or industry.

Monopolization:
Preserving a monopoly position through the acquisition of competitors, the exclusion of competitors to the given market, or the control of market prices are all in violation of antitrust laws..

Register Your Fictitious or "Doing Business As" (DBA) Name

February 2012

The legal name of a business is the name of the person or entity that owns a business. For example:

If you are the sole owner of your business, its legal name is your full name
If your business is a partnership, the legal name is the name given in your partnership agreement or the last names of the partners
For limited liability corporations (LLCs) and corporations, the business' legal name is the one that was registered with the state government
The legal name of your business is required on all government forms and applications, including your application for employer tax IDs, licenses and permits. However, if you want to open shop or sell your products under a different name, then you may have to file a "fictitious name" registration form with your government agency.

A fictitious name (or assumed name, trade name or DBA name, which is short for "doing business as") is a business name that is different from your personal name, the names of your partners or the officially registered name of your LLC or corporation.

For example, let's say Mary Smith is the sole proprietor of a catering company she runs out of her home. Mary wants to name her business Seaside Catering instead of using her business' legal name, which is Mary Smith. In order to use Seaside Catering, Mary will need to register that name as a fictitious business name with a government agency. The appropriate government agency depends on where she lives. In some states, you have to register fictitious names with the state government or with the county clerk's office; however, there are a few states that do not require the registering of fictitious business names.

What SBA Offers to Help Small Businesses Grow

What does SBA offer to small business owners? The programs are many and varied, and the qualifications for each are specific. SBA can help facilitate a loan for you with a third party lender, guarantee a bond, or help you find venture capital. Understanding how SBA works is the first step towards receiving assistance.

SBA’s Role
SBA provides a number of financial assistance programs for small businesses that have been specifically designed to meet key financing needs, including debt financing, surety bonds, and equity financing.

Guaranteed Loan Programs (Debt Financing)
SBA does not make direct loans to small businesses. Rather, SBA sets the guidelines for loans, which are then made by its partners (lenders, community development organizations, and microlending institutions). The SBA guarantees that these loans will be repaid, thus eliminating some of the risk to the lending partners. So when a business applies for an SBA loan, it is actually applying for a commercial loan, structured according to SBA requirements with an SBA guaranty. SBA-guaranteed loans may not be made to a small business if the borrower has access to other financing on reasonable terms.

SBA loan guaranty requirements and practices can change as the Government alters its fiscal policy and priorities to meet current economic conditions. Therefore, you can’t rely on past policy when seeking assistance in today's market.

Bonding Program (Surety Bonds)
SBA’s Surety Bond Guarantee (SBG) Program helps small business contractors who cannot obtain surety bonds through regular commercial channels.

A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor and a project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed.

Through the SBG Program, the SBA makes an agreement with a surety guaranteeing that SBA will assume a percentage of loss in the event the contractor should breach the terms of the contract. The SBA's guarantee gives sureties an incentive to provide bonding for eligible contractors, thereby strengthening a contractor's ability to obtain bonding and greater access to contracting opportunities for small businesses.

SBA can guarantee bonds for contracts up to $5 million, covering bid, performance and payment bonds, and in some cases up to $10 million for certain contracts.

Venture Capital Program (Equity Financing)
SBA’s Small Business Investment Company (SBIC) Program is a public-private investment partnership through which the SBA provides venture capital to small businesses. SBICs are privately owned and managed investment funds, licensed and regulated by SBA. With the private capital they raise and with funds borrowed at favorable rates through SBA, SBICs provide financing in the form of debt or equity to small businesses.

SBICs are similar to venture capital, private equity and private debt funds in terms of how they operate and their ultimate objective to generate high returns for their investors. However, unlike those funds, SBICs limit their investments to qualified small business concerns as defined by SBA regulations.

Developing a Marketing Plan

February 2012

Marketing takes time, money, and lots of preparation. One of the best ways to prepare yourself is to develop a solid marketing plan. A strong marketing plan will ensure you’re not only sticking to your schedule, but that you’re spending your marketing funds wisely and appropriately.

What can a Marketing Plan do for Your Small Business?
A marketing plan includes everything from understanding your target market and your competitive position in that market, to how you intend to reach that market (your tactics) and differentiate yourself from your competition in order to make a sale.

Your small business marketing budget should be a component of your marketing plan. Essentially, it will outline the costs of how you are going to achieve your marketing goals within a certain timeframe.

If you don't have the funds to hire a marketing firm or even staff a position in-house, there are resources available to guide you through the process of writing a marketing plan and developing a market budget.

Bend Your Budget When Necessary and Keep an Eye on ROI
Once you have developed your marketing budget, it doesn’t mean that it’s set in stone. There may be times when you need to throw in another unplanned marketing tactic -- such as hosting an event or creating a newspaper ad -- to help you reach your market more effectively.

Ultimately, it’s more important to determine whether sticking to your budget is helping you achieve your marketing goals and bringing you a return on investment (ROI) than to adhere to a rigid and fixed budget.

That's why it's important to include a plan for measuring your spend. Consider what impact certain marketing activities have had on your revenues during a fixed period, such as a business quarter, compared to another time period when you focused your efforts on other tactics. Consider the tactics that worked as well as those that didn’t work. You don't have to cut the tactics that didn't work, but you should assess whether you need to give them more time to work or whether the funds are best redirected elsewhere.

Granted, some tactics are hard to measure -- such as the efficacy of print collateral (brochures, sales sheets, etc.), but you need to consider the impact of not having these branding staples in your market tool kit before you reign in your graphic design and print funds.

Marketing plans should be maintained on an annual basis, at a minimum. But if you launch a new product or service, take time to revisit your original plan or develop a separate campaign plan that you can add to your main plan as an addendum.

At the end of the day, the time spent developing your marketing plan, is time well spent because it defines how you connect with your customers. And that's an investment worth making.

5 Steps to Registering Your Business

February 2012

Whether you are starting a new business or expanding an existing business, you will need to follow some basic steps to ensure you have all the necessary licenses, permits and registrations needed to legally operate.

1. Determine the Legal Structure of Your Business
You must organize your business as a legal entity. There are several options to consider, and all have different legal, financial and tax considerations. The right legal structure for your business depends on a number of factors, including the level of control you want to have, your business' vulnerability to lawsuits and financing needs.

The legal structure you choose will determine further registration requirements. Once you choose a legal structure, you may have to file registration forms with your state and/or local government. The requirements vary from state to state.

Visit the Incorporating Your Business page to learn about choosing a legal structure and where you'll need to go to file the appropriate paperwork.

2. Register Your Business Name
"Doing Business As," "DBA," "Assumed Name," and "Fictitious Name" are terms that are used to describe the process of registering a legal name for your business.

By default, the legal name of a business is the name of the person or entity that owns a business. If you are the sole owner of your business, its legal name is your full name. If your business is a partnership, the legal name is the name given in your partnership agreement or the last names of the partners. For limited liability corporations (LLCs) and corporations, the business' legal name is the one that was registered with the state government.

Your business' legal name is required on all government forms and applications, including your application for employer tax identifications, licenses and permits. However, if you want to open a shop or sell your products under a different name, then you may have to file an "assumed name" registration form with your state and local government.

Visit the Registering Your Doing Business As Name guide to learn about the requirements in your state.

3. Obtain Your Federal Tax ID
Employers with employees, business partnerships and corporations, and other types of organizations, must obtain an Employer Identification Number (EIN) from the U.S. Internal Revenue Service. The EIN is also known as an Employer Tax ID and Form SS-4:

U.S. Internal Revenue Service
Phone: 1-800-829-4933

Guide to the Employer Identification Number
Apply for an EIN Online
4. Register with Your State Revenue Agency
Just as you must have a Federal Tax ID, you will also need to obtain Tax IDs and permits from your state's revenue agency.

If you plan to sell products and you are required to collect sales taxes, you will likely need to obtain a Sales Tax Permit or Vendor's License from your state or local government (or both).

The State and Local Tax page is a starting point for learning about your state and local tax registration requirements. If you are looking for a specific state or local tax permit or license, use our search engine to find specific state and local tax forms and requirements.

5. Obtain Licenses and Permits
Most businesses are required to obtain some type of business license or permit to legally operate. The vast majority of small businesses will need to obtain a general business license or industry-specific operating permits from state and local government agencies.

Visit the Obtaining Business Licenses and Permits guide to find tools and information to help you obtain all the licenses, permits and registrations you'll need to get started or expand your business.