Business Funding & Finances

Business Funding & Finances

What You Need to get Started

What You Need to get Started

• Business License - Occupational License, or Home Occupation Permit is a government certificate that all businesses must apply and obtain.

• Each state requires business owners to register with the state revenue agency. The legal documents needed to register with the state revenue agency is the Federal Tax ID Number also known as an Employer Identification Number or (EIN).

• Business ventures involved in selling products must obtain a Sales Tax Permit or a Vendor's License from the state or local government they are operating out of.

• There are a number of business ventures that require additional legal documents other than the standard business license and tax permits. Florists, for example, must obtain a florist licensed in addition to federal, state and city permits.

• Business License - Occupational License, or Home Occupation Permit is a government certificate that all businesses must apply and obtain.

• Each state requires business owners to register with the state revenue agency. The legal documents needed to register with the state revenue agency is the Federal Tax ID Number also known as an Employer Identification Number or (EIN).

• Business ventures involved in selling products must obtain a Sales Tax Permit or a Vendor's License from the state or local government they are operating out of.

• There are a number of business ventures that require additional legal documents other than the standard business license and tax permits. Florists, for example, must obtain a florist licensed in addition to federal, state and city permits.

• Tax ID # - You need it If: 1. you have employees (also need a state employer number if you have employees) 2. You want to open a business bank account and don't want to use your SS#, 3. Your business is a corporation, LLC, or a partnership, or you are an employer (online)

• DBA (Trade Name) - Every business needs a "Fictitious Name" License or a "DBA," which stands for "Doing Business As." The DBA is the legal name of the business and is required to open a commercial banking or business account. Some entrepreneurs conduct business using only their given name as a sole proprietor. (Sec. of State) $10-15

• Health care business ventures require legal documents issued by The Department of Health and other agencies that govern health care ventures such as a "Medicare Insurance License" or nursing licenses

• Sellers Permit ( Also called a Resale Wholesale, Retail, Or Reseller's License, State Sales Tax Id, Tax Id, Resale Number, Resale Certificate, or Vendor's License).  You are required to get it if you sell retail, wholesale, or buy wholesale. (Board of Equalization, Sales Tax Commission Board) (Online IRS)

• Tax ID # - You need it If: 1. you have employees (also need a state employer number if you have employees) 2. You want to open a business bank account and don't want to use your SS#, 3. Your business is a corporation, LLC, or a partnership, or you are an employer (online)

• DBA (Trade Name) - Every business needs a "Fictitious Name" License or a "DBA," which stands for "Doing Business As." The DBA is the legal name of the business and is required to open a commercial banking or business account. Some entrepreneurs conduct business using only their given name as a sole proprietor. (Sec. of State) $10-15

• Health care business ventures require legal documents issued by The Department of Health and other agencies that govern health care ventures such as a "Medicare Insurance License" or nursing licenses

• Sellers Permit ( Also called a Resale Wholesale, Retail, Or Reseller's License, State Sales Tax Id, Tax Id, Resale Number, Resale Certificate, or Vendor's License).  You are required to get it if you sell retail, wholesale, or buy wholesale. (Board of Equalization, Sales Tax Commission Board) (Online IRS)

What About Expenses?What About Expenses?

• Permits/License• Building/Space (Rent, Mortgage)• Manufacturer• Utilities• Insurance• Assets/Equipment• Employees• Shipping• Start-up Costs (Paint, supplies,

furniture)

• Permits/License• Building/Space (Rent, Mortgage)• Manufacturer• Utilities• Insurance• Assets/Equipment• Employees• Shipping• Start-up Costs (Paint, supplies,

furniture)

How will you get Funding?

How will you get Funding?

• Savings• Family/Friends• Investors (Venture, Angel)• Loan, Grants

• Savings• Family/Friends• Investors (Venture, Angel)• Loan, Grants

Break-Even AnalysisBreak-Even Analysis

• The point where total revenue received equals the total costs associated with the sale of the product.

• The Break-even Analysis is a simple calculation that lets you determine how much you need to sell, monthly or annually, to cover your costs of doing business your break-even point. Below this sales level, you’re taking a loss. Above it, you have a profit.

• The point where total revenue received equals the total costs associated with the sale of the product.

• The Break-even Analysis is a simple calculation that lets you determine how much you need to sell, monthly or annually, to cover your costs of doing business your break-even point. Below this sales level, you’re taking a loss. Above it, you have a profit.

• Example

• Say you are selling boxes of candy bars at $1 for each bar, and it costs you 30 cents to buy each candy bar. So, for each candy bar you sell, you have 70 cents left over that is your gross margin. But you also have fixed costs, which remain the same regardless of sales volume in this case, $10 per month to store the candy bars.The Break-even Analysis shows that you will have to sell 14.3 candy bars per month to cover the $10 storage fee. BenefitsThe Break-even Analysis gives you a quick reality check on your business numbers. If you have done your research and have some good guesses about how much you can sell each month, your break-even will show whether that is a profitable level.

• Example

• Say you are selling boxes of candy bars at $1 for each bar, and it costs you 30 cents to buy each candy bar. So, for each candy bar you sell, you have 70 cents left over that is your gross margin. But you also have fixed costs, which remain the same regardless of sales volume in this case, $10 per month to store the candy bars.The Break-even Analysis shows that you will have to sell 14.3 candy bars per month to cover the $10 storage fee. BenefitsThe Break-even Analysis gives you a quick reality check on your business numbers. If you have done your research and have some good guesses about how much you can sell each month, your break-even will show whether that is a profitable level.