Shelley asks…

Do I qualify for a small business loan?

I need a relatively small business loan, (40K) to cover intial operating expenses for my seed-stage business.

Here’s what I do have:

Over 10 years hands-on experience in my field, extensive business / marketing “knowledge”, intelligence, passion and enthusiasm, a solid business plan and statistics / research for the past 2 years proving how and why my business will be successful.

However, I lack formal education, management experience and experience running my own business. In addition, I have a horrible credit rating, about 15K in personal debt and no collaterral.

We’ve all heard that investments are made to the people, not the business. On paper, I as a person look like a big risk, but my business is a million dollar idea. (I know that’s what everyone says, but my pro-forma income projections have me generating roughly 5 million dollars profit annually in just 3 years…and those are very feasible estimations) I have done extensive reading and learning about effective business operation and how to be successful, but don’t have a piece of paper from a University or College. (I’ve never let my education interfere with my schooling as Twain said)

I’m quite confident that a bank would laugh me right out of their office, but would a private investor or other organizations be able to “see the forest through the trees” so to speak or would the focus be on my credit, lack of formal education etc.?

The only thing I’m not interested in is any venture capital firms. Sure they would help me now, but in three years they’d be helping themselves to my profits…but any other ideas would be greatly appreciated. I am located in Canada, so anyone with a Canadian perspective or resource would be beneficial, but will take input from anyone in the world that can provide some insight.

admin answers:

In all liklihood this is too early for bank loan. You need other types of investments in the initial stages of a new company. Once you have some recurring sales you can use bank debt to pay off early investors.

Elizabeth asks…

What is better for a small business a S corp o a LLC?

I have a DBA and I’m planing to change to a S corporation o a LLC the company is a small plumbing operation, with only one employee for know, but the plan is to grow it, and create credit for the business, with entity will be the best to chose

admin answers:

IMHO, an S-Corp.

An S-Corp is an IRS designation for a small corporation that meets their requirements for an S-Corp. The corporation itself is not taxed by the federal government. The Employees pay regular taxes on their wages, and shareholders pay taxes on their dividends. This eliminates double taxation.

Bob asks…

Business license cost for a small service operation in Missouri?

Trying to sort it all out and you know how it is with the bureaucracy/IRS nonsense so if someone knows the answer, or even a possible answer or clue in the right direction, then that would be great for me. I’ve heard I may be able to get away from it for a while, since the business is small and I only expect to make a couple hundred dollars extra a week, but it may grow larger and I want to be well informed and prepared if it does. It’s a laundry service and I plan on drastically outcompeting other laundry businesses in the area basically by doing the work myself and not having “excessive expenses” like additional labor and what not.

10 pts. best answer thanks

admin answers:

I live in Kansas and they are about the same. If you do not have employees this pertains:
IRS does not require you to have a license or permit, just a tax number (this will be your social security number for now). Same with the state. Your city may require one, but so does mine and i never got one in 25 years of doing business. Once you have employees, you will need unemployment insurance and workman’s compensation insurance. . If yo live in a large town you should have an state employment office and they can help with that when the time comes. They won’t care if you have a business permit as long as you pay your unemployment taxes.

Helena asks…

Quick interview for small business owners?

Business Name:
Owner’s Name(s):
Location/Phone:
Type of Business:
Sole Proprietorship, Partnership, or Corporation?:
Products (goods sold or services offered):
Years in existence:
Number of employees:

Questions: Please try to answer at least 8 questions in 2 sentences or more.
What prompted you to begin or buy this business?
What kinds of problems did you anticipate before you started?
What kinds of problems do you deal with in the daily operation of your business?
What types of employees do you have? (part time, full time, hourly wage, salary, etc)
Do the different types of employees have different positives/negatives to you as an employer? Explain.
Before starting your business, did you have a business plan?
As a small business owner, do you believe you have any advantages over large business or corporations? If yes, what? If no, why not?
What advice would you offer to anyone who is thinking about starting a business of their own?
What are some benefits of owning your own business and running it?
What advertising methods do you use, if any?

admin answers:

When I was only 21, much to young to start my own business, I was held under gunpoint by some mobster alpacas. Ever since then, starting my own business has been a life long dream. I am not 34 and I have an extremely profitable hockey puck manufacturing company.

At first, I suffered from some severe mental problems, but Dr. Spaceman help me through them. Thanks Doc! I continue to suffer from my alcohol addictions but we are working right through those as well.

Hmmm…daily business. Well every morning I am expected to rise out of bed before 11 o’clock. I never seem to wake up by then and my alpaca must have eaten my alarm clock. I suppose everyone suffers from this, however the problem is enhanced with my reoccurring, raging hangovers.

I work alone, in the dead of night in my “hockey puck” lab in my basement. Oh, and there is also my alpaca friends who test my products. These alpacas are very demanding and I find that their paycheck is often higher than mine.

I had no business plan whatsoever. I guess thats just the Hornburger way!

My only suggestion is that make sure you have one or more off-shore bank accounts!

Small businesses definitely have advantages, such as working your own hours, and scheduling your own “vacations.”

Why in the world would I want to advertise this? Everyone knows where the best hockey pucks are sold!

Hope this helped! But please note that this is entirely made up and not meant to be offensive in any way! ALL RIGHTS RESERVED :D

Don asks…

How do u calculate and format a small business’s projected costs when making a proposal to a bank?

I am starting a small business and need to have a financial plan for the business plan. I find myself calculating the first years costs as one big budget, but I am not even sure that the assets are going to cost what I sm projecting. How detailed do I need to get? Start-Up and Operations as a whole, or break it down all the way to pens and pencils?

admin answers:

I suggest you check out examples of business plans to see how companies are doing it. Or better yet, get yourself a business plan software – I recommend Palo Alto’s Business Plan Pro 2006 http://www.amazon.com/exec/obidos/ASIN/B0009PF1QO/ref=nosim/powerhomebizguid — to make the process easier for you.

The following websites contain examples of business plans:

- Bplans.com http://www.bplans.com/sp/businessplans.cfm
- MOOT Corp Business Plan competition winners

http://www.businessplans.org/businessplans.html

- VFinance – View hundreds of real business plans in pdf format. Http://www.vfinance.com/home.asp?bps=1&ToolPage=bps_main.asp
- Business Owners Toolkit Sample business plans and information on how to create a plan. Http://www.toolkit.cch.com/tools/buspln_m.asp
- PlanWare Planning software and information. Http://www.planware.org/
- Virtual Business Plan Walk through the design of a business plan. Http://www.bizplanit.com/vplan.html
- SBA Business Planning Guide http://www.sba.gov/starting_business/planning/basic.html
- Small Business Advancement Center http://www.sbaer.uca.edu/business_plan/businessPlan.pdf
- Sample Business Plan General planning guide created by the Canadian Business Service Center. Http://www.cbsc.org/servlet/ContentServer?pagename=CBSC_FE/display&c=GuideFactSheet&cid
- Business Plans Index – A subject guide to sample business plans and profiles for specific business types from Carnegie Library of Pittsburgh. Http://216.183.184.20/subject/business/bplansindex.html

Some recommended books are :

- Business Plans Kit for Dummies
- The Complete Book of Business Plans : Simple Steps to Writing a Powerful Business Plan
- Writing Business Plans That Get Results : A Step-By-Step Guide
- Business Plans For Dummies®
- Your First Business Plan : A Simple Question and Answer Format Designed to Help You Write Your Own Plan

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