Skip to main content

Original text


Powered by Google TranslateTranslate
Powered by Google TranslateTranslate
Manage + Grow
Topic
Format
Industry
Entrepreneur Type
Business Stage
Language

Get resources ideal for small business owners that have been in business for over a year.

Displaying 4511 - 4520 of 4542
Headline
Marketing

General Definition

In plain and simple terms, marketing activities and strategies result in making products available that satisfy customers while making profits for the companies that offer those products. That's it in a nutshell!  (In this article, the word Product includes Service, and applies to businesses that provide a service, and not a product.)

Marketing produces a "win-win" because:

Headline
Leasing Commercial Space
Leasing Commercial Space   When you get serious about an available business space, chances are you'll be presented with a typed or printed commercial lease prepared by the landlord or the landlord's lawyer. As you read the lease, keep these points in mind: Rule 1: Understand that the terms almost always favor the landlord. Rule 2: Know that with a little effort you can almost always negotiate significant improvements to the terms. In theory, all terms of a lease are negotiable. But your negotiating power depends on whether your local rental market is hot or cold. If plenty of commercial space is available, you can probably win many landlord concessions. If your area's rental market is tight or you are chasing a unique space, you'll have considerably less leverage
Headline
Independent Contractor vs. Employee
Independent Contractor vs. Employee To determine whether a worker is an independent contractor or an employee, you must examine the relationship between the worker and the business. All evidence of control and independence in this relationship should be considered. The facts that provide this evidence fall into three categories – Behavioral Control, Financial Control, and the Type of Relationship itself. Behavioral Control covers facts that show whether the business has a right to direct and control how the work is done through instructions, training, or other means. Financial Control covers facts that show whether the business has a right to control the financial and business aspects of the worker's job. This includes: The extent to which the worker has unreimbursed business expenses, The extent of the worker's investment in the facilities used in performing services, The extent to which the worker makes his or her services available to the relevant market, How the business pays the worker, and The extent to which the worker can realize a profit or incur a loss. Type of Relationship includes: Written contracts describing the relationship the parties intended to create, The extent to which the worker is available to perform services for other, similar businesses, Whether the business provides the worker with employee–type benefits, such as insurance, a pension plan, vacation pay, or sick pay, The permanency of the relationship, and The extent to which services performed by the worker are a key aspect of the regular business of the company. For more information, refer to Publication 15-A (PDF), Employer's Supplemental Tax Guide. If you want the IRS to determine whether a specific individual is an independent contractor or an employee, file Form SS-8 (PDF), Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. In order to avoid the requirement to withhold payroll taxes from an employee, there is a tendency for some business owners to declare a worker to be an independent contractor, who properly should be considered an employee.  The more control you exercise over the worker, in determining when, where and how he does his job, the more likely it is that the IRS will consider the worker to be an employee, and not an independent contractor.     Employee or Independent Contractor?  Whether someone who works for you is an employee or an independent contractor is an important question. The answer determines your liability to pay and withhold Federal income tax, social security and Medicare taxes, and Federal unemployment tax.  In general, someone who performs services for you is your employee if you can control what will be done and how it will be done.The courts have considered many facts in deciding whether a worker is an independent contractor or an employee. These facts fall into three main categories: Behavioral Control – Facts that show whether the business has a right to direct and control. These include: Instructions - an employee is generally told: when, where, and how to work what tools or equipment to use what workers to hire or to assist with the work where to purchase supplies and services what work must be performed by a specified individual what order or sequence to follow Training – an employee may be trained to perform services in a particular manner. Financial Control – Facts that show whether the business has a right to control the business aspects of the worker’s job include: The extent to which the worker has unreimbursed expenses The extent of the worker’s investment The extent to which the worker makes services available to the relevant market How the business pays the worker The extent to which the worker can realize a profit or loss Written contracts describing the relationship the parties intended to create Whether the worker is provided with employee-type benefits The permanency of the relationship How integral the services are to the principal activity Type of Relationship – Facts that show the type of relationship include: For a worker who is considered your employee, you are responsible for: Withholding Federal income tax, Withholding and paying the employer social security and Medicare tax, Paying Federal unemployment tax (FUTA) Issuing Form W-2, Wage and Tax Statement, annually, Reporting wages on Form 941, Employer’s Quarterly Federal Tax Return. For a worker who is considered an independent contractor, you may be responsible for issuing Form 1099-MISC, Miscellaneous Income, to report compensation paid. The more control you exercise over the worker, the more likely it is that the IRS will consider him to be an employee, subject to payroll tax withholding, and not an independent contractor, who receives a 1099- MISC form, and pays his/her own taxes.  If the employer improperly classifies a worker as being an independent contractor when he should have been considered an employee, the IRS will impose penalties and interest against the employer for failing to withhold payroll taxes. Government Contracting     There are a number of resources available to assist small businesses who wish to do business as a vendor, supplier or contractor to the U.S. Government.   The Small Business Administration (SBA) had a PRO-Net program, which is an Internet-based database of information search engine on more than 205,000 small businesses, which government procurement officers could access when looking for suppliers.  PRO-Net has now been merged with the Dept. of Defense Central Contractor Registration (CCR), which provides companies desiring to sell to the US Government a central point to register. Registration can be done through the combined website www.ccr.gov.   Every vendor who wants to sell to the US Government must have a Dun & Bradstreet D-U-N-S number, which can be obtained on the website www.dnb.com.   The SBA has a secondary website, www.business.gov, which provides a single source of information concerning 40 different federal departments and agencies,that assist or regulate small businesses.   The website www.firstgov.gov serves as a gateway portal linking and providing access to the websites for every government agency.   Most government contractors are required to post a surety bond when a government contract is awarded.  For contractors otherwise unable to obtain the necessary surety bond, the SBA provides a Surety Bond Guaranty (SBG) program.  Information about the SBG program, and numerous other SBA programs available to assist small businesses is available on the SBA website,  www.sba.gov.    In Pennsylvania, the Bureau of Purchases (BOP) of the Department of General Services (DGS) is responsible for purchasing or contracting for equipment and supplies for the Commonwealth.  The BOP has a Vendor Information and Support Division to assist vendors in doing business with the Commonwealth.  For more information visit www.dgs.state.pa.us.
Headline
Forming A Corporation
Introduction Many people dream of being an entrepreneur. By purchasing a franchise, you can often sell goods and services that have instant name recognition as well as obtain training and ongoing support to help you succeed. Be cautious, however; like any investment, purchasing a franchise is not a guarantee of success. The Benefits and Responsibilities of Franchise Ownership A franchise typically enables you, the investor (franchisee), to operate a business. By paying a franchise fee, which may cost several thousand dollars, you are given a format or system developed by the company (franchiser), the right to use the franchiser's name for a limited time, and assistance. For example, the franchiser may help you find a location for your outlet, provide initial training and an operating manual, and advise you on management, marketing, and personnel. Some franchisers offer ongoing support such as monthly newsletters, a toll free 800 telephone number for technical assistance, and periodic workshops or seminars. While buying a franchise may reduce your investment risk by enabling you to associate with an established company, it can be costly. You may also be required to relinquish significant control over your business while taking on contractual obligations with the franchiser. Below is an outline of several components of a typical franchise system. Consider each carefully. The Cost In exchange for obtaining the right to use the franchiser's name and assistance, you may pay some or all of the following fees: Initial franchise fee and other expenses. Your initial franchise fee, which may be nonrefundable, may cost several thousand to several hundred thousand dollars. You may also incur significant costs to rent, build, and equip an outlet and purchase initial inventory. Other costs include operating licenses and insurance. You also may be required to pay a grand opening fee to the franchiser to promote your new outlet. Continuing royalty payments. You may have to pay the franchiser royalties based on a percentage of your weekly or monthly gross income. You often must pay royalties even if your outlet has not earned significant income during that time. In addition, royalties are usually paid for the right to use the franchiser's name, so even if the franchiser fails to provide promised support services, you still may have to pay royalties for the duration of your franchise agreement. Advertising fees. You may have to pay into an advertising fund. Some portion of the advertising fees may go for national advertising or to attract new franchise owners, but not to target your particular outlet. Controls To ensure uniformity, franchisers typically control how franchisees conduct business. These controls may significantly restrict your ability to exercise your own business judgment. The following are typical examples of such controls: Site approval. Many franchisers preapprove sites for outlets. This may increase the likelihood that your outlet will attract customers. The franchiser, however, may not approve the site you want. Design or appearance standards. Franchisers may impose design or appearance standards to ensure customers receive the same quality of goods and services in each outlet. Some franchisers require periodic renovations or seasonal design changes. Complying with these standards may increase your costs. Restrictions on goods and services offered for sale. Franchisers may restrict the goods and services offered for sale. For example, as a restaurant franchise owner, you may not be able to add popular items to your menu or delete items that are unpopular. Similarly, as an automobile transmission repair franchise owner, you might not be able to perform other types of automotive work, such as brake or electrical system repairs. Restrictions on method of operation. Franchisers may require you to operate in a particular manner. The franchiser might require you to operate during certain hours, use only preapproved signs, employee uniforms, and advertisements, or abide by certain accounting or bookkeeping procedures. These restrictions may impede you from operating your outlet as you deem best. The franchiser may also require you to purchase supplies only from an approved supplier, even if you can buy similar goods elsewhere at a lower cost. Restriction of sales area. Franchisers may limit your business to a specific territory. While these territorial restrictions may ensure that other franchisees will not compete with you for the same customers, they could impede your ability to open additional outlets or move to a more profitable location. Terminations and Renewal You can lose the right to your franchise if you breach the franchise contract. In addition, the franchise contract is for a limited time; there is no guarantee that you will be able to renew it. Franchise terminations. A franchiser can end your franchise agreement if, for example, you fail to pay royalties or abide by performance standards and sales restrictions. If your franchise is terminated, you may lose your investment. Renewals. Franchise agreements typically run for 15 to 20 years. After that time, the franchiser may decline to renew your contract. Also be aware that renewals need not provide the original terms and conditions; the franchiser may raise the royalty payments or impose new design standards and sales restrictions. Your previous territory may be reduced, possibly resulting in more competition from company-owned outlets or other franchisees. Before Selecting a Franchise System Before investing in a particular franchise system, carefully consider how much money you have to invest, your abilities, and your goals. The following checklist may help you make your decision. Your Investment How much money do you have to invest? How much money can you afford to lose? Will you purchase the franchise by yourself or with partners? Will you need financing and, if so, where can you obtain it? Do you have a favorable credit rating? Do you have savings or additional income to live on while starting your franchise? Your Abilities Does the franchise require technical experience or relevant education, such as auto repair, home and office decorating, or tax preparation? What skills do you have? Do you have computer, bookkeeping, or other technical skills? What specialized knowledge or talents can you bring to a business? Have you ever owned or managed a business? Your Goals What are your goals? Do you require a specific level of annual income? Are you interested in pursuing a particular field? Are you interested in retail sales or performing a service? How many hours are you willing to work? Do you want to operate the business yourself or hire a manager? Will franchise ownership be your primary source of income or will it supplement your current income? Would you be happy operating the business for the next 20 years? Would you like to own several outlets or only one? Selecting a Franchise Like any other investment, purchasing a franchise is a risk. When selecting a franchise, carefully consider a number of factors, such as the demand for the products or services, likely competition, the franchiser's background, and the level of support you will receive. Demand Is there a demand for the franchiser's products or services in your community? Is the demand seasonal? For example, lawn and garden care or swimming pool maintenance may be profitable only in the spring or summer. Is there likely to be a continuing demand for the products or services in the future? Is the demand likely to be temporary, such as selling a fad food item? Does the product or service generate repeat business? Competition What is the level of competition nationally and in your community? How many franchised and company-owned outlets does the franchiser have in your area? How many competing companies sell the same or similar products or services? Are these competing companies well-established, with wide name recognition in your community? Do they offer the same goods and services at the same or lower prices? Your Ability to Operate the Business Sometimes, franchise systems fail. Will you be able to operate your outlet even if the franchiser goes out of business? Will you need the franchiser's ongoing training, advertising, or other assistance to succeed? Will you have access to the same or other suppliers? Could you conduct the business alone if you must lay off personnel to cut costs? Name Recognition A primary reason for purchasing a franchise is the right to associate with the company's name. The more widely recognized the name, the more likely it will draw customers who know its products or services. Therefore, before purchasing a franchise, consider: The company's name, how widely recognized it is, and if it has a registered trademark. How long the franchiser has been in operation. If the company has a reputation for quality products or services. If consumers have filed complaints against the franchise with the Better Business Bureau or a local consumer protection agency. Training and Support Services Another reason for purchasing a franchise is to obtain support from the franchiser. What training and ongoing support does the franchiser provide? How does their training compare with the training for typical workers in the industry? Could you compete with others who have more formal training? What backgrounds do the current franchise owners have? Do they have prior technical backgrounds or special training that helps them succeed? Do you have a similar background?
Headline
Buying a Business
Thinking about buying a  business? It can be a great idea, if you do your homework.   Thinking about buying a  business? It can be a great idea, if you do your homework. This is a complex decision that requires a careful analysis of physical properties, financial statements, and the relationships between the business and its customers, its community, and its competitors. Don't try to do this analysis alone-get professional help to evaluate and price the business, particularly if you don't have at least three years of experience in owning and operating a similar enterprise. Some advantages and disadvantages of purchasing an existing business include the following: Advantages • The business has an existing established relationship with both customers and suppliers. • Financing will be easier to obtain providing the business has a good profit history. • Operations can begin right away; current inventory can be sold to produce immediate cash flow.   Disadvantages • The cost may be higher than starting from scratch as often you are buying "goodwill." • Existing problems can be hidden until after the sale. • Inventories may be obsolete due to their age; equipment may be faulty.   Recommendations I. Require the seller to put in writing and warrant every essential part of the business, including: • that the financial statements which should be attached as exhibits are true and correct • that there are no hidden liabilities of any kind (tax claims, lawsuits, or supplier bills). • a complete list of everything being purchased: leases, contracts, amounts owed to suppliers, amounts owed by customers, inventory, fixtures, equipment, signs, computer hardware and software and anything else that will contribute to the success of the business.   2. If the financial statements have not been audited by a certified public accountant, have it done. If the seller won't pay the cost, you should do so in order to make sure your investment is a wise one. 3. Detemine whether there is an industry association that can provide you with "normal" financials to be used to compare against the financials of the business you’re buying. Average financials for most types of business can be found in the Annual Statistical Report published by the Risk Management Association (RMA), available in the business section of most libraries. 4. Fairly safe investments will return 5% annually. Consider this when reviewing the selling price. There are companies that do business valuations for a fee; it's probably worth paying the fee to do the valuation to avoid paying too much for the business.     5. If you are paying more for the business than the assets are valued, recognize that you are buying "goodwill" -- an intangible asset that may be amortized over a 15-year period. 6. Make sure to involve your banker. The purchase and sales agreement state the agreed upon price, lists what is being bought, indicates what actions are required by the seller (such as an environmental study) and by the purchaser (such as seeking financing), and sets the time the agreement is binding on both parties. Your banker needs this agreement to determine how he or she can help you finance the selling price, and whether the down payment is adequate. The bank also needs to know what is being purchased as some of it may be considered collateral. 7 Determine why the seller is selling the business 8. Determine how long this business can be expected to last. Are there factors that could terminate the business, such as a road being built that destroys the business location? 9. If there is a lease, talk to the owner of the property to be sure the terms of the lease will remain the same. This is an excellent time to discuss renewal terms and termination possibilities. 10. Ask the owner to let you work in the business prior to making a decision to buy. There is no better way of judging whether the business volume is satisfactory, whether you will enjoy working in that business and whether there are any problems you need to straighten out before the sale is finalized. 11. A business is often successful due to the personality of the owner. If this is the case, you have to decide whether you will be able to make the business as successful with your personality. 12. Make sure the seller signs an agreement not to compete for the next 10 years or so. This is especially important if you feel his or her personality was the reason for the success of the business. 13. Investigate neighborhood businesses that are not direct competitors to learn what they have to say about the growth of business in your area, what problems they see for the future, and how they feel about the business you're buying. 14. Have a credit check done on both the owner-sel1er and the business itself. 15. Check with suppliers to determine if the inventory you are buying is valued correctly. 16. If there are employees, talk to them about whether they will remain if you buy the business. Get any other information they are willing to provide.   17. Talk to some of the customers. Find out if they are satisfied with the business as it is now. 18. Determine if this business' prices are competitive. Visit every competitor to see if there are any changes underway that might influence your business. 19. Check with government agencies. Local agencies can tell you about licensing, environmental requirements, zoning rules, and whether there are taxes due for any local or state agency (licenses, personal property tax, franchise tax, income tax, and property tax). Federal agencies can tell you whether income tax, social security, Medicare, and unemployment tax payments are up to date. 20. Prepare a business plan. If you need help, consult your local SCORE office. Your business library might have an actual business plan for your industry for you to study and utilize to prepare your own.   21.  When buying an existing business, it is important whether the Purchase and Sale Agreement is for the purchase of assets or stock.  As a general rule, it is preferable for the buyer to purchase only assets, not stock.  If the Buyer purchases all the stock in the company, he acquires all existing liabilities associated with the business, whether known or unknown.   On the other hand, if it is an assets-only purchase, the Purchase and Sale Agreement could, and should, provide that the Buyer is acquiring certain listed assets, including the exclusive rights to the use of the name of the business.  The Agreement should also provide that the Buyer is acquiring no liabilities associated with the business, arising before the closing, other than those specified, such as accrued vacation and other Human Resources benefits for those employees who will be retained.  The HR aspects are important.  The Agreement should identify which employees will be retained, and the level of pay and benefits they will receive.   Whether it is a stock or asset purchase, the Seller should be required to indemnify the Buyer against any unforeseen liabilities that may appear after the closing.  It is often a good idea to hold a part of the purchase price in escrow for a period of time, as a hedge against such unpleasant surprises.       BUYING A BUSINESS - DUE DILIGENCE CHECKLIST   So you have decided to purchase an existing business.  Regardless of whether the deal is structured as an asset transaction, a stock transaction or a merger, make sure you know what you are getting into by requiring detailed information from the seller regarding its business operations and finances.  The following is a checklist of information and documents you should review:   A.        Organization and Good Standing.   The Company’s Articles of Incorporation, and all amendments thereto. The Company’s Bylaws, and all amendments thereto. The Company’s minute book, including all minutes and resolutions of shareholders and directors, executive committees, and other governing groups. The Company’s organizational chart. The Company’s list of shareholders and number of shares held by each. Copies of agreements relating to options, voting trusts, warrants, puts, calls, subscriptions, and convertible securities. A Certificate of Good Standing from the Secretary of State of the state where the Company is incorporated. Copies of active status reports in the state of incorporation for the last three years. A list of all states where the Company is authorized to do business and annual reports for the last three years. A list of all states, provinces, or countries where the Company owns or leases property, maintains employees, or conducts business. A list of all of the Company’s assumed names and copies of registrations thereof.   B.        Financial Information.   Audited financial statements for three years, together with Auditor’s Reports. The most recent unaudited statements, with comparable statements to the prior year. Auditor's letters and replies for the past five years. The Company’s credit report, if available. Any projections, capital budgets and strategic plans. Analyst reports, if available. A schedule of all indebtedness and contingent liabilities. A schedule of inventory. A schedule of accounts receivable. A schedule of accounts payable. A description of depreciation and amortization methods and changes in accounting methods over the past five years. Any analysis of fixed and variable expenses. Any analysis of gross margins. The Company’s general ledger. A description of the Company’s internal control procedures.   C.        Physical Assets.   A schedule of fixed assets and the locations thereof. All U.C.C. filings. All leases of equipment. A schedule of sales and purchases of major capital equipment during last three years.   D.        Real Estate.   A schedule of the Company’s business locations. Copies of all real estate leases, deeds, mortgages, title policies, surveys, zoning approvals, variances or use permits.   E.         Intellectual Property.   A schedule of domestic and foreign patents and patent applications. A schedule of trademark and trade names. A schedule of copyrights. A description of important technical know-how. A description of methods used to protect trade secrets and know-how. Any "work for hire" agreements. A schedule and copies of all consulting agreements, agreements regarding inventions, and licenses or assignments of intellectual property to or from the Company. Any patent clearance documents. A schedule and summary of any claims or threatened claims by or against the Company regarding intellectual property.   F.        Employees and Employee Benefits.   A list of employees including positions, current salaries, salaries and bonuses paid during last three years, and years of service. All employment, consulting, nondisclosure, nonsolicitation or noncompetition agreements between the Company and any of its employees. Resumés of key employees. The Company’s personnel handbook and a schedule of all employee benefits and holiday, vacation, and sick leave policies. Summary plan descriptions of qualified and non-qualified retirement plans. Copies of collective bargaining agreements, if any. A description of all employee problems within the last three years, including alleged wrongful termination, harassment, and discrimination. A description of any labor disputes, requests for arbitration, or grievance procedures currently pending or settled within the last three years. A list and description of benefits of all employee health and welfare insurance policies or self-funded arrangements. A description of worker’s compensation claim history. A description of unemployment insurance claims history. Copies of all stock option and stock purchase plans and a schedule of grants thereunder.   G.         Licenses and Permits.   Copies of any governmental licenses, permits or consents. Any correspondence or documents relating to any proceedings of any regulatory agency.   H.        Environmental Issues.   Environmental audits, if any, for each property leased by the Company. A listing of hazardous substances used in the Company’s operations. A description of the Company’s disposal methods. A list of environmental permits and licenses. Copies of all correspondence, notices and files related to EPA, state, or local regulatory agencies. A list identifying and describing any environmental litigation or investigations. A list identifying and describing any known superfund exposure. A list identifying and describing any contingent environmental liabilities or continuing indemnification obligations.   I.          Taxes.   Federal, state, local, and foreign income tax returns for the last three years. States sales tax returns for the last three years. Any audit and revenue agency reports. Any tax settlement documents for the last three years. Employment tax filings for three years. Excise tax filings for three years. Any tax liens.   J.         Material Contracts.   A schedule of all subsidiary, partnership, or joint venture relationships and obligations, with copies of all related agreements. Copies of all contracts between the Company and any officers, directors, 5-percent shareholders or affiliates. All loan agreements, bank financing arrangements, line of credit, or promissory notes to which the Company is a party. All security agreements, mortgages, indentures, collateral pledges, and similar agreements. All guaranties to which the Company is a party. Any installment sale agreements. Any distribution agreements, sales representative agreements, marketing agreements, and supply agreements. Any letters of intent, contracts, and closing transcripts from any mergers, acquisitions, or divestitures within last five years. Any options and stock purchase agreements involving interests in other companies. The Company’s standard quote, purchase order, invoice and warranty forms. All nondisclosure or noncompetition agreements to which the Company is a party. All other material contracts.   K.        Product or Service Lines.   A list of all existing products or services and products or services under development. Copies of all correspondence and reports related to any regulatory approvals or disapprovals of any Company's products or services. A summary of all complaints or warranty claims. A summary of results of all tests, evaluations, studies, surveys, and other data regarding existing products or services and products or services under development.   L.          Customer Information.   A schedule of the Company’s twelve largest customers in terms of sales thereto and a description of sales thereto over a period of two years. Any supply or service agreements. A description or copy of the Company’s purchasing policies. A description or copy of the Company’s credit policy. A schedule of unfilled orders. A list and explanation for any major customers lost over the last two years. All surveys and market research reports relevant to the Company or its products or services. The Company’s current advertising programs, marketing plans and budgets, and printed marketing materials. A description of the Company’s major competitors.   M.        Litigation.   A schedule of all pending litigation. A description of any threatened litigation. Copies of insurance policies possibly providing coverage as to pending or threatened litigation. Documents relating to any injunctions, consent decrees, or settlements to which the Company is a party. A list of unsatisfied judgments.      N.        Insurance Coverage.   A schedule and copies of the Company’s general liability, personal and real property, product liability, errors and omissions, key-man, directors and officers, worker's compensation, and other insurance. A schedule of the Company’s insurance claims history for past three years.   O.        Professionals.   A schedule of all law firms, accounting firms, consulting firms, and similar professionals engaged by the Company during past five years.   P.        Articles and Publicity.   Copies of all articles and press releases relating to the Company within the past three years.      
Headline
Business Valuation Rules
Business brokers use rules of thumb every day to help sellers put price tags on their businesses.
Headline
Business Insurance
The best way to protect a business owner’s personal assets from claims made against the business is to have general liability insurance coverage for the business.     The best way to protect a business owner’s personal assets from claims made against the business is to have general liability insurance coverage for the business.  This is particularly true in those business structures where the owner has unlimited personal liability, such as a sole proprietorship or general partnership.  However, even in those business structures that provide the owner with limited personal liability, such as a corporation or limited liability company (LLC), it is still a good idea to have general liability insurance coverage.  Then, in the event that a claim is made against the business, the insurance carrier will provide a lawyer to defend against the claim.  Without liability insurance a lawsuit becomes a major distraction, annoyance and expense to defend.   If the business will provide advice or recommendations to its customers, such as a consultant, the general liability insurance policy should include “Errors and Omissions” coverage.  E and O coverage is the equivalent of professional malpractice insurance for professionals such as doctors and lawyers, but may not be included in a standard liability policy unless requested.  There are business owner’s package policies available that provide a combination of liability insurance as well as property insurance to protect against the damage or loss of business equipment and/or inventory.   Businesses should also consider having key man life and/or disability insurance covering the death or disability of a key member of the company.  Key man insurance policy benefits are paid to the company in the event of the death or disability of the person who is insured, and may enable the company to continue in business if a key member dies or becomes disabled.  If the person who is insured dies, key man insurance will assist the company in paying his estate for the value of the deceased member’s share in the business, which the company might otherwise not be able to afford.   Property Insurance will cover the loss of or damage to business equipment.  A Business Owner’s package policy provides both liability and property coverage.   If yours is a home based business, your Homeowners Insurance policy will not cover business related claims unless it includes an Incidental Business Use Rider.  Contact your insurance carrier to obtain such a rider.
Headline
Mass.gov Official Website for Businesses
Worcester SCORE provides a link to the Massachusetts website of tools and resources to help you succeed in MA business.
Success Story
Native Ground Books and Music
Erbsen has since used his SCORE mentor's advice to bring his music to new markets across the country and around the world. When the time came to hire additional employees, he returned to SCORE for advice on incentive pay and benefit plans. Erbsen continues to be a man of many talents. Along with running Native Ground Music, he serves as Director of Appalachian Music at Warren Wilson College, hosts a program at his local public radio station, and teaches classes in banjo, fiddle and mandolin.
Headline
About Bankruptcy
Bankruptcy: An overview

CONNECT
712 H St NE PMB 98848
}
Washington, DC 20002
1-800-634-0245

Copyright © 2024 SCORE Association, SCORE.org

Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

Chat generously provided by:LiveChat

In partnership with
Jump back to top