TAKE A NUMBER

Do you have employees? Do you operate your business as a corporation or a partnership? Do you file any Employment, Excise, or Alcohol, Tobacco and Firearms tax returns:?

If the answer to any of these questions is “Yes,” then you need an Employer ID Number [EIN] from the Internal Revenue Service. Most business people know what an EIN is and how it functions, yet many small business owners do not bother to get one. Operating much like a personal “Social Security Number” it is a means by which the federal government keeps track of the revenues of interest that passes through your business.

The brief list of conditions that make an EIN is not exhaustive. The IRS requires you to have an EIN If you withhold taxes on income, other than wages, paid to a non-resident alien or if you have a Keogh plan.

Also, your business is required to have an EIN if it is involved with Trusts[ except certain grantor-owned revocable trusts], IRAs, Exempt Organization Business Income Tax Returns, Estates, Real estate mortgage investment conduits, Non-profit organizations, Farmers' cooperatives or Plan administrators.

This link will take you the SBA’s site on EINs for a fuller briefing on who needs an EIN and when. It will also tell you how to apply for an EIN and how to close out an account with the IRS and discontinue your EIN.

MARKETING PLANS

[Below are some tips from the SBA on Developing a Market Plan]


A sound marketing plan is key to the success of your business. It should include your market research, location, the customer group you have targeted, competition, positioning, the product or service you are selling, pricing, advertising, and promotion.

"You're in business to serve a customer need," says Derek Hansen, founder of American Capital Access. "If you're not sensitive to customers, don't know who your customers are, how to reach them, and, most of all, what will convince them to buy your product or service, get help."

Effective marketing, planning, and promotion begins with current information about the marketplace. Visit your local library, talk to customers, study the advertising of other businesses in your community, and consult with any relevant industry associations. This interactive tool will help you assess your marketing strengths and weaknesses.

Once you have all the necessary information, write down your plan:

1. Define your business:
Your product or service
Your geographic marketing area - neighborhood, regional, or national
Your competitionHow you differ from the competition - what makes you special
Your price
The competition's promotion methodsYour promotion methods
Your distribution methods or business location

2. Define your customers:
Your current customer base - age, sex, income, and neighborhood
How your customers learn about your product or service - advertising, direct mail, word of mouth, Yellow Pages
Patterns or habits your customers and potential customers share - where they shop, what they read, watch, and listen to
Qualities your customers value most about your product or service - selection, convenience, service, reliability, availability, and affordability
Qualities your customers like least about your product or service - can they be adjusted to serve your customers better?; prospective customers whom you aren't currently reaching

3. Define your plan and budget:
Previous marketing methods you have used to communicate to your customers
Methods that have been most effective
Cost compared to sales
Cost per customer
Possible future marketing methods to attract new customers
Percentage of profits you can allocate to your marketing campaign
Marketing tools you can implement within your budget - newspaper, magazine, Yellow Pages, radio or television advertising, direct mail, telemarketing, and public relations activities such as community involvement, sponsorship, or press releases
Methods of testing your marketing ideas
Methods for measuring results of your marketing campaign
The marketing tool you can implement immediately

The final component in your marketing plan should be your overall promotional objectives: to communicate your message, create an awareness of your product or service, motivate customers to buy and increase sales, or other specific targets. Objectives make it easier to design an effective campaign and help you keep that campaign on the right track. Once you have defined your objectives, it is easier to choose the method that will be most effective.

Learn more at the SBA Marketing Site for Small Businesses

[In its efforts to help small businesses become successes, the SBA has provided some valuable lessons in “Target Marketing. Below is a segment taken directly from an essay on that topic.”]
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Target Marketing

It's important to remember that the focus of marketing is people. If you're concentrating your efforts on your product or profit only, you'll miss the mark. The term target market is used because that market - that group of people - is the bull's eye at which you aim all your marketing efforts.

So, don't forget that a market is people - people with common characteristics that set them apart as a group. The more statistics you have about a target market, the more precisely you can develop your strategy. The table below shows some examples of market segments (or groups).

To read the SBA’s entire essay on Target Marketing, go to that segment of their “Market and Price” series of essays.

TARGET MARKETING

WHEN IS THE PRICE RIGHT?

[This is an excerpt from the SBA’s web page “Understanding Marketing” In its "Market and Price" Section. The entire essay can be found using the link at the bottom of the page. If you are in business, you are in business to sell something, be it a product or a service. Knowing what the market is willing to pay for that product or service can be the key to your business survival.]
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What Is 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!

Marketing produces a win-win situation because:

Customers have a product that meets their needs and
Healthy profits are achieved for the company. (These profits allow the company to continue to do business in order to meet the needs of future customers.)

Stated another way, focus on what the customer wants is essential to successful marketing efforts. This customer-orientation must also be balanced with the company's objective of maintaining a profitable volume of sales in order for the company to continue to do business. Marketing is a creative, ever-changing orchestration of all the activities needed to accomplish both these objectives.

How Are The Customer And Business Objectives Met?

The American Marketing Association's definition of marketing is: the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

You see in the above definition that the process of marketing begins with discovering what products customers want to buy. Providing the features and quality customers want is a critical first step in marketing. You'll be facing an uphill battle if you provide something you want to produce and then try to convince someone to buy it.

The marketing process continues with setting a price, letting potential customers know about your product, and making it available to them.

Read More about “Market and Price”

TARP Money Headed To The SBA

[There has been a lot of Buzz this week about TARP money headef for small businesses. Below is a Press Release from the SBA that can sets out the facts straight from the horses mouth. The original press release can be found at: http://www.sba.gov/idc/groups/public/documents/ca_fresno/ca_fresno_opedra.pdf ]

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Op-Ed . . . Recovery Act

Recovery Act Gives SBA Tools to Boost Small Businesses: By Carlos G. Mendoza, Fresno District Director

The Administration is taking actions to make a big dent in the small business credit crunchby offering new incentives to small business borrowers and lenders through the AmericanRecovery and Reinvestment Act and Department of Treasury actions.

With tax incentives and steps to encourage lending, the Recovery Act recognizes that small businesses are part of the solution to getting our economy moving again. The bill’s primary goals for the U.S. Small Business Administration are jump-starting job creation, re-starting lending, and promoting investment in small businesses.

The Recovery Act provides entrepreneurs and lenders financial relief from the currenteconomic crisis that will help encourage borrowing and lending to all small businesses,including start-ups.

For small businesses, the Recovery Act temporarily eliminates SBA guaranteed 7(a) and 504 loan fees and offers tax credits. For lenders, it temporarily eliminates 504 loan fees. The fee eliminations are retroactive to February 17, the day the Recovery Act was signed. SBA is developing a mechanism for refunding fees paid on loans since then.

The Act also supports guarantees of up to 90 percent on most types of 7(a) loans toqualified small businesses. The temporary loan fee eliminations and 90 percentguarantee provisions will apply to approximately $8.7 billion in 7(a) loans and $3.6billion in 504 loans. SBA estimates this will cover lending in both programs throughcalendar year 2009.

In addition, the Treasury Department will commit up to $15 billion in TARP funds to help unfreeze the small business lending market, which will particularly benefit community banks, credit unions and other small lenders. Treasury will purchase existing and new SBA-backed loans made by banks, freeing up more capital so these banks can restart SBA-backed lending to local small businesses. This is yet another step in President Obama’s plan to assist small businesses during this economic crisis.

SBA staff is working hard to implement the rest of the Recovery Act’s programs for small businesses. There are a lot of moving parts, but our aim is put these programs in place as quickly and effectively as we can so they have the broadest and most rapid effect possible on small business credit markets.

The Act provides SBA with $730 million in total funding. This includes $375 million tocover the costs of temporarily eliminating loan fees and raising guarantee limits on someloans; extra funding for SBA-backed Microlenders; and $255 million for a new loanprogram to help viable small businesses with immediate economic hardship make payments on existing loans.

The Recovery Act also authorizes SBA to use its 504 program to refinance existing loans for fixed assets as part of a business expansion project; to use its guarantee authority to establish a secondary market for bank loans made under the 504 loan program; and to make loans to broker-dealers who buy SBA-backed loans from lenders and pool them for sale to investors on the secondary loan market.

Also under the Act, small businesses that need surety bonds to compete for construction and service contracts can qualify for SBA-backed surety bonds of up to $5 million, more than double the previous $2 million maximum.

Another element of the Recovery Act that is already in place is SBA’s Microloan program. These non-profit, community-based lenders make loans of up to $35,000 to small businesses and start-ups. Because this program is already operating, you can go to a Microlender today and apply for a loan. The Act funds $50 million in new loans by these Microlenders, plus $24 million to help pay for the technical assistance and training they provide to loan applicants.

We have already seen significant interest in a new program, America’s Recovery Capital, or ARC Stabilization Loans, by lenders and small businesses alike. Once in place, this temporary new program will offer deferred-payment loans of up to $35,000 to viable small businesses that need help making payments on an existing, qualifying loan for up to six months. These loans will be 100 percent guaranteed by SBA. Repayment would not have to begin until 12 months after the loan is fully disbursed, giving small businesses time to refocus their business plans in order to succeed in the long run.

The bill helps SBA-licensed Small Business Investment Companies by raising the level of SBA funding they can receive to make venture capital investments in small businesses. It also raises the percentage of their investments that must be made in smaller businesses from 20 percent to 25 percent.

Finally, I want to emphasize that all of SBA’s existing programs are open for business – we are backing loans, and providing technical assistance, training, and contract help to entrepreneurs every day.

In short, SBA is working overtime to get these provisions in place to begin knocking down the obstacles that are keeping credit from flowing to small business entrepreneurs, whose proven ability to create new jobs and commerce is second to none, and in whose hands the next phase of our economic recovery rests.

For additional information please contact the SBA at (559) 487-5791.

SBA Demographics on Minority Small Businesses

[Here are some statistics from an executive summary of an SBA report that may help minorities considering creating their own businesses. There are taken from the SBA Small Business web site found at the link below. The data is a bit dated and examines a comparison of growth rates between 1997 and 2002. However, the information can be very useful and the full report is 49 pages long and relatively through.]
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Minorities in Business: A Demographic Review of Minority Business Ownership

• In 2002, minorities owned approximately 18 percent of the 23 million U.S. firms.
• Using a proxy for measuring minority business growth, Black-owned firms had the highest growth rate for several measures between 1997 and 2002:
45.4 percent for the number of firms; 24.5 percent of total receipts for the group; and 16.7 percent for employer firm receipts.

Asians also experienced growth in the number of employer firms, at 12.6 percent, and in annual payroll, 25.3 percent. The number of American Indian and Native Alaskan businesses grew 2.1 percent.

• Hispanics or Latinos constituted the largest minority business community and owned 6.6 percent of all U.S. firms, 3.7 percent of employer firms, and 7.4 percent of nonemployer firms.

• Blacks owned 5.0 percent of all U.S. firms, 1.8 percent of employer firms, and 5.9 percent of nonemployer firms. Asians and Islanders owned 4.7 percent of all U.S. firms, 6.1 percent of employer firms, and 4.3 percent of nonemployer firms. For comparison purposes, the percentages for Whites are 82.9, 88.0, and 81.4 respectively.

• Percentages of minority women owning businesses rose from 1997 to 2002: 29 percent of Black employer firms and 47 percent of Black nonemployer firms were women-owned in 2002. In contrast, women owned 17 percent of White employer firms and 31 percent of White nonemployer firms.

• More than half of Black-owned businesses had less than $10,000 in business receipts in 2002, compared with one-third of White-owned firms and 28.8 percent of Asian-owned firms.

• On average, for every dollar that a White-owned firm made, Pacific Islander-owned firms made about 59 cents, Hispanic-, Native American-, and Asianowned businesses made 56 cents, and Black-owned businesses made 43 cents.

• The distribution of firms varied by industry and race or ethnicity. For example, 16 percent of Native American-owned firms operated in construction; 20.5 percent of Black-owned firms were in health care and social assistance. Hispanic-owned businesses were concentrated in administrative and support, waste management, and remediation services, 13.2 percent, as were Islander-owned businesses, 11.6 percent.

• All minority-owned business categories had higher proportions than the non-minority-owned businesses in “other services,” such as personal services and repair and maintenance. Of Black-owned firms, 17.6 percent were in other services; for Asians, the share was 17.1 percent; for Hispanics, 15.8 percent;
and for Native Americans, 13.2 percent.

• The ethnicities of Asian business owners were identified as Asian Indian, Chinese, Filipino, Japanese, Korean, Vietnamese, and other Asian. Among this group, Asian Indians had the highest ratio of employer firms to total firms (37 percent), followed by Koreans (36 percent), and Chinese (31 percent). Asian Indians also had the highest average receipts per nonemployer firm, $56,792 followed by Koreans, $56,320. Japanese had the highest receipts per employer firm, $1,256,646, followed by Chinese, $1,075,029. Asian Indians once again had the highest average annual payroll per employee, $28,779, followed by Japanese at $28,141.

• The ethnicities of Hispanic business owners were identified as Mexican, Mexican American, and Chicano; Puerto Rican; Cuban; and other Spanish/ Hispanic/Latino. Among this group, Cubans had the highest ratio of employer firms to total firms, 18 percent; the highest average receipts per nonemployer firm, $36,692; the highest receipts per employer firm, $1,108,998; and the highest average annual payroll per employee, $28,769. Mexicans, Mexican Americans, and Chicanos had the highest average number of employees per employer firm, 8.1, followed by other Spanish/Hispanic/Latino, 7.5.

• Of nonemployers, 58.3 percent were homebased, compared with 22.1 percent of employers. Home-based business rates decline sharply with firm employment size. Twenty-nine percent of all respondent employer firms with one to four employees were home-based and 0.2 percent of those with 500 or more employees.

• Home-based rates varied by ethnic and racial characteristic, a fact that may also be related to the industries in which these firms are concentrated. More than two-thirds of Asian business owners reported that they conducted business from nonresidential locations. Hispanics had a relatively smaller share of firms with one to four employees that were home-based, but a relatively large share—5.6 percent— of large firms based in the home.

• Owners use a variety of sources of capital to start or acquire businesses. Nonemployer firm owners generally use a less varied array of financing sources than owners of firms with employees. Higher percentages of male/female equally owned, male-owned, and White-owned employer firms than of other firm groups financed their startups or acquisitions through business loans from banks. Higher percentages of Black- and Native American-owned employer businesses, as well as equally men- and women-owned employer firms used business loans from the government or government-guaranteed bank loans. More than all other groups, Islander employers used personal and business credit cards to finance their startups and acquisitions.

• The majority of Asians and Hispanics in the U.S. labor force are immigrants, either naturalized or not. Among self-employed Asians, 80.8 percent are immigrants, compared with 67.9 percent of Islanders and 56.8 percent of Hispanics. Asians tended to have the highest shares of naturalized citizens in all work categories (labor force, self-employment, professional, and moonlighter) and vied with Hispanics for the highest shares of non-U.S. citizens.

READ THE ENTIRE REPORT AT:

Minorities in Business: A Demographic Review of Minority Business Ownership

Acquiring an Employer Identification Number

Many small businesses fail to get a seperate Employer Identification Number (also called an "EIN" or a Tax Identification Number - "TIN). And that is a BIG MISTAKE! Your business should be seperate from you as an individual, and as such, it should have its own identification for IRS purposes. The Small Business Administration has a web page that takes you through the process of getting an EIN and explaining why (and if) you need one.
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"An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN. You may apply for an EIN in various ways, and now you may apply online. This is a free service offered by the Internal Revenue Service. You must check with your state to make sure you need a state number or charter.

Do You Need an EIN?
Do You Need a New EIN?
How to Apply for an EIN
Apply for an EIN Online
How Long Will it Take to Get a Number?
Misplaced Your EIN?
How EINs are Assigned and Valid EIN Prefixes
Canceling an EIN – Closing Your Account
Apply for an EIN Online

Check out our Interview-style online EIN application. No need to file a Form SS-4! We ask you the questions and you give us the answers. The application includes embedded help topics and hyperlinked keywords and definitions so separate instructions aren’t needed. After all validations are done you will get your EIN immediately upon completion. You can then download, save, and print your confirmation notice. It’s fast, free, and user-friendly!

Change of Ownership or Structure Generally, businesses need a new EIN when their ownership or structure has changed. Refer to "Do You Need a New EIN?" to determine if this applies to your business."

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This information can be found at the SBA web site: here.