Setting Up a Business

Part 1

By Mary Oquendo

It is no secret that I am moving in a parallel direction to grooming. Several times a week, I would pass by and notice an office for rent, which overlooked a golf course. I could hear it call my name. I am not sure what took so long (maybe fear), but on New Year’s Eve 2012, I made the decision to follow my dream and open up a Reiki Wellness and Educational Center for both people and animals.

The first order of business was to call my friend Pam and ask if she wanted to join me in opening a new business. I knew I could not do this on my own, as I already run a full-time mobile grooming business. Most people were surprised to learn we partnered, as we are total opposites. It is not so much the differences, but our strengths and weaknesses complement each other.

If you are going into business with somebody else, it is important to choose a business partner wisely. Pick someone who will work with you and communicate effectively and without judgment. Are they reliable and trustworthy? Did I mention that Pam is my daughter’s mother-in-law? Of course, the phone call later from my daughter Jessie began with “Is there something you need to tell me?”

My first step was to contact the landlord and arrange to see the space. I was looking to see if both the interior and exterior were in good repair with adequate outside lighting and available parking. I wanted to see that the landlord takes care of the property. This property was located on a busy road with easy access both in and out of the parking lot. I talked to other business owners to find out if the town where the property is located is friendly to businesses.

Once we decided on the location, we started the checklist. It does not matter what kind of business you set up or if you are brick and mortar versus a set of wheels. The steps are similar.

Meet with the zoning department before you sign the lease 

Zoning should be the first department you visit. They will tell you if the location is zoned for what you intend to do. While we did need a Change of Use (i.e. $90), we did not need a zoning change. There is no guarantee a zoning board will approve it. You will get a good feel in this office whether or not the town should rename the Economic Development Office to the Economic UNdevelopment Office.

Decide on your name and reserve your domain name

They go hand in hand. Everybody searches for businesses online these days. Your name should be clear and easy to remember. I passed a storefront called Calico Corners. I have no idea what they do. Is it something to do with cats, maybe fabric or quilting, or possibly daycare? Beats me. Ask a non-groomer friend what your name conjures up for them. Cutesy names are fun, but will your clients find you during an online search? My friend, Beth, owns Pretty Paws. She consistently receives phone calls looking for Pretty Pawz, a business located four towns over.

READ and sign the lease

The lease should clearly state who is responsible for what. Pam and I will make any repairs under $50 and replace light bulbs. Negotiate your rent. As a new business, you need time to get going. We were able to reduce the rent by 40%. It will be re-evaluated when the lease is up.

Decide on your tax status 

Do you want to be an LLC, partnership, sole proprietorship, corporation, IC (Independent Contractor), or a DBA (Doing Business As)? Laws vary from state to state, and as everybody has differing financial pictures, it is best to talk to an accountant and lawyer to choose wisely.

Put a business plan together with a cost analysis 

What do you need to charge to pay your bills AND yourself? Expenses include but are not limited to rent, grooming, cleaning, office supplies, taxes, insurance, advertising, signs, construction or remodeling costs, Internet, utilities, banking, and websites.

Register your business name with the proper locality

The Economic Development Office can tell you where, as it can vary from state to state.

Apply for your federal and tax ID numbers

They identify you as a business. You do not need to have employees or offer retail. The state number also serves a dual purpose, as it alerts them that you WILL be filing quarterly returns for sales and use. Use tax is what is owed to your state when you buy supplies from out of state and no sales tax is collected. You are obligated to report it and pay at your state’s rate. You may also be required to make quarterly tax payments to the federal government instead of in one payment at the end of the year. The federal tax ID is free, and you can file online at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employer-ID-Numbers-(EINs). There is a link on this web page that goes to your state and is loaded with helpful links. You can file online in most states, but they will charge you. In Connecticut, it is $100.

Meet with the rest of the departments at Town/City Hall

They all have specific regulations, all of which must be met before you open your doors. That includes mobile units and house calls. I was given a sign-off sheet for each department (Health, Zoning, Building, and Wetlands). I turned it in to the Building Department before they would give me the final OK. I was fortunate that the Town of New Milford has their act together. The departments work together rather than being individual fiefdoms. Most municipalities have road signage restrictions.

What I am battling right now is the other tenant who used to occupy the entire building. Their sign is the maximum allowed, therefore I cannot add a separate sign. They must also give up some parking spots. In addition, there may be state offices from which you need approval. In Connecticut, it is the Department of Agriculture (another $100). If you are uncertain, contact your state’s Economic Development Office. Your local Animal Control Officer is a good informational resource.

Contact the utilities 

They include electricity (they need the meter number), phone, and Internet. We have good cell phone reception, and my carrier has enabled a mobile hot spot on my phone.

Purchase business insurance

Your landlord may request an insurance certificate with specific liability amounts.

Set up a business bank account

You will need a business account to deposit checks written out to the business. In addition, there are many options to accept credit cards. Your bank can set you up with a machine and company. If you use a machine, keep in mind that there are federal regulations regarding your records. Square, PayPal, and Intuit have credit card readers for the smart phones. Research your options before making a decision.

Hire an accountant

There is more to depositing checks and filing at the end of the year. There may be several different taxes due at different times of the year. Failure to pay them on the due date can have costly ramifications for your business.

Leave plenty of space at the bottom of your checklist. You will be adding to it.

Other Considerations:

  1. Tap friends and family to help out, but be aware that if you are not paying them, you may be at the bottom of their to-do list. Their intentions may be good, but they may have no follow through.
  2. If there is construction or remodeling involved, you are not only at the mercy of contractors but with town officials who may want something different with every inspection. Check on the contractor’s license and references. Do not let cost be the only determining factor. Quality and timely workmanship are important.
  3. Your policy signs should be clear but concise. An inexpensive method is to print them out and laminate them at an office supply store.
  4. Take the time to make this venture your own by writing your goals and expectations down, and post it where you can see it every day. Do not sell yourself short. Dream big!
  5. Remember that emotions are contagious, so smile and think happy, successful thoughts even when no one is calling or walking through your doors. One of my favorite quotes is “Failure is not an option” by Gene Kranz. He was the flight director of the Apollo 13 mission. The other is this: “Whether you think you can, or that you can’t, you are usually right” by Henry Ford.

 

Resources:
www.sba.gov
www.groomerinabox.com
www.score.org
Local Chamber of Commerce. Many offer business startup, tax, and marketing seminars.
State and local Economic Development Office.

There is more to opening up a business than just following a dream. Part Two will cover marketing.

Comments

  1. Debbie says:

    What a well written article. I had no idea all that went into setting up a business. I learned a lot and will print this up to avoid making any mistakes if I ever decide to open and set up my own business.

  2. Leah Shirokoff says:

    This is a wonderful, comprhensive article for people seriously planning to start a business or even just pondering the idea. I hope this will get in the hands of so many interested people.

  3. Lori M says:

    A wonderful article that answers questions I wouldn’t even think to ask. This will come in handy when I open my own business next year!

  4. Debbie Tucker-Smith says:

    Very good, clear article! Steps laid out well – so many want to start a business (not just grooming) and don’t know where to start, so this will be very useful to many people.

  5. Barbara, Care Fur Dogs says:

    Excellent article. Very helpful.

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