By David Willetts


In all business turnaround situations there are certain steps that are commonly taken to change the fortunes of a failing business.

The owner of a less than successful business may require professional expert help to arrest the business demise and to create value for the organization. The task of managing the required change may be beyond the owner's skill set or too much emotional sentiment may exist that may preclude the owner from taking the tough ‘business saving decisions'.

Is there a standard process to be adopted in business turnarounds?

All business situations are different and, therefore, merit different approaches and emphasis on different aspects of the work. However, there are some steps that are generally considered in many successful business turnaround situations and ten of the most relevant are given below:

1. Review and Assess the Present Situation
In a business turnaround it is important to understand fully the starting position. It will be important to gather objective and anecdotal data in order to review the situation and to determine the causes, as well as to comprehend the immediate effects, of the issues impacting the business.

Management accounts, the sales order book, financial arrangements, internal controls, customer service levels, quality and leadership skills are typical areas that will require evaluation and a view taken on.

2. Develop Plans and Business Strategy
After assessing what is required to be changed for the business turnaround to be successful, it will be necessary to develop robust plans and strategy that will achieve success.

Without doubt it will be necessary to comprehensively document the actions to be taken, the timings, the financial impact of those actions and to obtain ‘buy-in' from the business owner.

The benefits of writing the business plan include that of a reference against which actual results can be measured and an indication to third parties that the proposed business turnaround plan has been carefully evaluated and is a viable proposition that should be supported. This will be an important and relevant form of communication to investors, staff and others who may need to know what the businesses future plans are.


3. Communicate With Key Employees
For the business turnaround to gain momentum it will be necessary to meet with managers and key personnel. The current business affairs should be explained and the consequences of not taking corrective action should be made known. An outline of the proposed actions to be taken should also be communicated and a request for comments should be sought.

Whilst it may not be possible to answer detailed questions it will be important to elicit the concerns of this group and address them as positively as possible.

Members of this group will critical to the success of the business turnaround. They will be charged with taking the planned actions and delivering the results; consequently it will be imperative that the group act as a team and are committed to the future plans.


4. Communicate With Other Employees
It will be necessary at the earliest opportunity to meet with all employees or their union representatives, particularly if job losses are planned.

A prolonged period of uncertainty, fuelled by rumour and counter rumour, will not be beneficial to the business and whilst bad news may not be easy to deliver, the communication of it in a timely sensitive manner is desirable.

The meeting will also be the opportunity to provide an insight into the future business plans and the part the remaining employees will play.

5. Meet the Bank
The bank and other parties with a financial investment in the business should be advised of the business turnaround plans. If possible meetings should be arranged to discuss the plans and to seek assurances of continued, and maybe, more support for the business.

6. Meet Customers
Dependent upon the severity of the situation within the business it may be necessary to reassure key customers of the business turnaround plans and the benefits that will accrue for them.

This action should be considered mandatory if the cause of the business demise has been poor customer service, poor quality product or any other matter not meeting the expected/agreed customer satisfaction levels.

Begging for a second, third or even fourth chance to ‘get things right' may be embarrassing but remember: no customers - no business. Learn from past mistakes, do not promise what cannot be delivered and ensure internal systems, processes and communication channels are raised to a standard that will seamlessly allow business to be conducted in a timely and efficient manner.


7. Meet Suppliers
If the business has failed to settle payable accounts on time, even the murmur of business turnaround activity taking place may result in suppliers imposing draconian payment terms that may jeopardize the business turnaround recovery plan.

If support for the turnaround plan has been gained from the financial institutions and investors, it will be advisable to actively seek meetings with vendors to outline the plans and to seek their continued support.

Re-establishing trust will be critical. Negotiating new or even the continuation of existing, payment terms from a weak position will be difficult, however, all promises made should be honoured or if failure is imminent inform the vendor in advance of how any debt will be discharged.

8. Conserve Cash
Review and improve if necessary the credit management procedures. If possible negotiate extended payment terms to suppliers; examine thoroughly all unused assets of the business and liquidate if necessary.

Options that may be available include selling unused buildings, renting out spare office space, selling unused plant and office equipment, disposing of excess or redundant stocks, factor sales debt and if unavoidable make excess employees redundant.

In addition the elimination of all unnecessary overhead cost should also be actioned.

9. Implement New/Update Systems and Procedures
A thorough review of existing systems and procedures will be required to meet the goals of the business turnaround plan. Implement change if necessary; it will be noteworthy to recall that a continuation of old practices will almost certainly result in the same old results.

Positive and profitable change may be required and this should be communicated to employees, so that they understand their roles in the new business environment.

10. Monitor, Measure and Take Action
Throughout the business turnaround process, results should be regularly measured against plan and corrective actions taken if required. Key performance indicators (KPI) should be determined that will give a snapshot of the business performance and be available on a daily, weekly or monthly basis.

The KPIs should include financial and non-financial measures and reflect the important aspects of the business that will determine success or failure.

Finally it will be desirable to pro-actively communicate the turnaround progress to all interested parties - employees, customers, suppliers as well as the financial institutions.

Provided sound business management principles are employed, results measured and positive trends reported, control of the business should be re-established. However, the business turnaround work should not be considered as a one-off. The experienced gained during the turnaround process should be adopted to avoid a repetition of the earlier mistakes made.

By Afra AmirSanjari


You are selling your small business (business value under $1 million for this article).
You would like the buyer of your business to come in with an all-cash offer, or be
able to qualify for an SBA guaranteed loan. However, in many cases the owner of the
business ends up taking back the financing because the buyer is not able to make
an all-cash offer or does not qualify for an SBA guaranteed loan. So you create a
“business note” and you now become the “bank”. At first that may seem okay, but
after a couple of years of receiving payments you may decide you want to get back
into business and you need the cash that is tied up in your business note on which
you are receiving payments. So now you want to sell your business note to raise
cash for your next business venture. What is it worth? That will depend a lot on how
you structured the note.

The objective of this article is to help you structure the
note so that it is more attractive to a prospective business note buyer.

Assumption: This article discusses the structure of a note that includes only the
business assets of a business. If a business also includes real estate that is being
sold at the same time as the business, that real estate should be sold in a
transaction that is financed separately from the business assets. This allows each to
be valued and financed in the most optimum manner. For example, it may be
possible to finance the real estate with a lower down payment, for a longer term,
with a lower interest rate, and without a personal guarantee.

The objective of a business note buyer or investor when buying future business note
payments is to minimize the risk of a default on the note. Therefore, they look for
specific things when evaluating the purchase of future payments from your business
note. Those include the following:

• buyer’s down payment

• number of payments made on the note (also known as “seasoning”)
• buyer’s credit history
• personal guarantee of the buyer
• total amount of payments being sold
• cash flow of the business and past profitability
• length of term of the note
• payment amount
• offsets
• lien position of the note
• amortization of the note
• experience of the buyer with the type of business purchased
• interest rate on the business note
• documentation of the business sale

Unlike the purchase of a piece of real estate, the tangible assets of a small business
may not be adequate to cover the amount due on the business note if the buyer of
the business defaults. Therefore, the business note buyer is looking for ways to
lessen the likelihood of a default. If there is a default on the note, the business note
buyer will require that the business buyer follow through on their personal
guarantee which secures the business note.

A cash down payment of at least 33 percent should be made by the business buyer.
This down payment should not come from borrowed funds. The reason for requiring
such a large down payment is to make it less attractive for the buyer to “walk away”
from the business if they encounter problems. If they have a significant amount of
their own money invested in the business, they may think twice about walking away
from the business when things get tough.

If the down payment was less than 33 percent, then the business note buyer will
require that the difference be made up by additional payments on the business
note. The business note buyer wants to see that the new owner of the business has
at least a one-third equity investment in the business between the combination of
cash down payment and payments made on the business note while operating the
business.

Business note buyers want to see that at least two monthly payments have been
made on the note by the new owner of the business. For new owners of professional
practices such as doctors or dentists, a larger number of paid monthly payments
will be required. This serves a couple of purposes. It should show that the new
owner is generating cash flow from the business. It also allows the new owner to see
if the business is meeting their expectations. As part of the “due diligence”
performed by the business note buyer, they will interview the new owner to see if
any problems exist that might lead to future problems making payments on the
business note. They will want to know if the new owner was “mislead” by the seller
of the business.

The buyer of the business should have a credit score of at least 600. A higher score
is required by the business note buyer when the value of future business note
payments being purchased reaches a certain level. Any “clouds” on the business
buyer’s credit history should not be current. These should have been resolved
before purchase of the business.

The business note must be personally guaranteed by the buyer. It cannot be
guaranteed by the company buying your business. Specifically, it cannot be
guaranteed by a person signing on behalf of the company. If there is a default, the
business note buyer will be coming after the personal assets of the individual(s)
making the personal guarantee. A personal financial statement for the buyer should
be obtained to verify that they have the necessary assets should it be necessary to
fulfill the personal guarantee.

The maximum amount a business note buyer will buy in a single transaction is
between $300,000 and $450,000. You can create a business note for more than this
maximum amount, but the business note buyer won’t buy more than their
maximum at one time. This means when the period is completed for which
payments have been sold any remaining payments will once again come to you. At
this point you will have the option of selling future payments again, if you want to.

The cash flow of the business must be adequate to service the note and provide
additional cash for the new owner to live on. The cash flow should be at least 1.25
times the amount required to service the note. The business should have been in
the same location for at least 3 years (4 years for restaurants and bars), and it
should have been profitable over that time.

The term of the note should not be longer than 72 months with 36 to 60 months
being preferred. You can create a business note for longer than the recommended
period, but a business note buyer will only buy the number of payments with which
they are comfortable. The objective is to minimize the risk to the note buyer. The
longer the term, the greater the likelihood that something will go wrong. The note
buyer is looking to minimize their risk because the note is not fully secured by the
assets of the business.

A key item related to the term of the note is the term of the lease of the space in
which the business operates. In order to avoid a major disruption to the business
due to a problem renewing the lease, the term of the lease should be at least as
long as the term of the business note.

The business note must be in first lien position. The business note cannot be a
second position lien behind a bank loan. If there is a default, the second position
lien holder may have a difficult time recovering their investment.

The business note should be fully amortized over its term. There cannot be a
balloon at the end because there is probably no way to refinance the balloon at the
end of the note term. If a bank was not willing to finance the original transaction, it
is unlikely that they would be willing to finance the balloon at a later date.(Notes:
Some business note buyers may accept a balloon if it can be amortized within 24
months using the same monthly payment used to pay the note. Other business note
buyers may buy payments up to a few months before the end of the note term, but
leave the balloon for the business note holder.)

The business note buyer wants to see that the new owner of the business has prior
experience running the type of business being purchased. This is especially
important for the purchase of a “high-tech” business or a professional practice. The
assumption is that someone with experience in the type of business has a better
chance of succeeding than someone without prior experience.

One of the biggest factors contributing to the discount that the seller will have to
take when selling the future payments is the difference between interest rate on the
original business note, and the yield required on their investment by the business
note buyer when they buy the future note payments. Therefore, the interest rate on
the business note should be set as high as possible while still allowing a monthly
payment that can be covered by the cash flow of the business for the term of the
note.

The deal is not done until the paper work is done. There are stories where people
documented the sale of a business on a napkin or restaurant place mat. That will
not be adequate if you have any thought of selling your business note in the future.
There are four main documents that should be produced. It is recommended that a
lawyer be used to help properly prepare these documents. The documents are listed
below.

UCC-1

chattel security agreement or chattel mortgage

promissory note

purchase agreement

The UCC-1 documents that the seller is holding a “perfected” lien on the business.
This document is filed with county government and is part of the public record. If
there is a default, this document indicates that the business seller will be first (after
tax liens) to receive proceeds from the sale of any business assets.

The “chattel security agreement” is a list of the tangible assets of the business. This
will usually be the furniture, fixtures, and equipment that are the tangible assets of
the business. The intangible assets are things like a loyal customer base that can be
lost if the new ownership does not provide the service received from the previous
ownership. The chattel security agreement does not become part of the public
record, but is necessary to document what the tangible assets were at the time of
the business sale.

If any vehicles are part of the security for the business, the title of the vehicles
should indicate that you are the owner of the vehicles so that the new business
owner cannot sell these vehicles without your knowledge.

The promissory note documents the details of the sale like value of the note at the
time of sale, the term of the note, the monthly payment, the interest rate, and any
other special terms such as late payment fees.

The purchase agreement ties the whole transaction together. It may contain
information that is not specifically contained on the other documents such as
provisions to provide periodic financial statements to the seller which could then be
made available to a prospective note buyer for evaluation.

The promissory note or the purchase agreement should not contain any “offset”
statements which would allow the business buyer to deduct from payments made
on the note due to problems running the business or problems with equipment
purchased as part of the business. If the promissory note or purchase agreement
does contain “offsets”, then the business note buyer will require at least 6 months
of seasoning to see if there have been any events that would activate the “offset”
provisions.

The following table summarizes the factors contributing to a business note that will
be more attractive to a prospective note investor.

Note Factor

Preferred Value for Note Factor

Buyer’s Down Payment

At least 33% in cash that was not borrowed

Minimum Number of Payments Already Made (Seasoning)

2 monthly payments (more are preferred and more are required for professional
practices) by the new owner

Buyer’s Credit History

Buyer must have a credit score of at least 600 with no recent “clouds” on credit
history

Personal Guarantee

Personal guarantee required (cannot be a person signing on behalf of corporation or
partnership)

Total Amount of Payments Being Sold

Maximum is $300,000 to $450,000 in a single transaction (note can be created for
more than this amount, but the maximum that can be sold at one time is $300,000
to $450,000)

Cash Flow of the Business

Cash flow should be at least 1.25 times the amount of the monthly payment on the
business note.

Length of Term of the Note

72 months maximum but 36 to 60 months is preferred (Note can be created for a
longer term but business note buyer won’t buy the payments beyond a certain
point.)

Lien Position of the Note

First lien position only

Amortization of the Note

Note must be fully amortized within the note term

Experience of the Buyer

The buyer should have prior experience in the type of business being purchased.

Interest Rate

As high as possible such that cash flow can support the required payment for the
term of the note.

Documentation For Sale

UCC-1

Chattel Security Agreement

Promissory Note

Purchase Agreement

Real Estate

Real estate that is part of the business should be sold in a separate transaction from
the business assets

Of course, a business note can be structured other than recommended above,
especially if the seller does not anticipate selling future note payments. However, if
the seller has any thought that they might want to sell future note payments, then
the seller should follow the above recommendations as much as possible.

If you have an existing business note or are in the process of creating one as part of
the sale of a business, and you are thinking about selling some or all of your future
payments on that note, then we can help you determine what an investor would be
willing to pay for those payments. Please contact us today for a free, no obligation
quote on the sale of your future business note payments.

By Julia Tang


Starting Business Secrets will help you to start your own business successfully.

The American Dream is, and always will be, to come up with an idea, start a business and become rich from your own efforts. Based upon this motivation, thousands of businesses fail each year, due primarily to not being familiar with the basics involved in running a business.

This report will enlighten you, and give you a number of suggestions you can use to better guarantee your chances for success. This report is written with the warning that any and every business venture contains certain inherent risks, and any number of alternatives. We do not espouse that any one way is the right way or that our suggestions are the only way. On the contrary, we advise that before investing any money in a business venture, you seek counselling and help from a qualified accountant and/or attorney.

Just about the first thing you should consider before deciding to start or purchase a business is the legal form you'll be operating under. There are basically four choices: sole proprietorship, partnership, limited partnership, and/or corporation.

Each has a number of advantages and disadvantages. We'll try to enumerate some of them for you.

As much as anything else, for many people starting a business is a form of ego-gratification, and they form a corporation for some sort of prestige gain - just to say, "I own a corporation."

With just a little bit of observation, you'll find that one of the major causes of business failures is due to the founder wasting start-up capital on frills, such as an impressive store- front office, expensive furnishings, and corporate legal costs.

One of the basic traits you must develop it you're going to be successful in business, is a tight hold on your expenditures. In fact, a good rule of thumb is that anything that does not make money for yo or protect your investment, should not be purchased at this time. Very definitely, this applies to the expense of setting up your own corporation.

Unless you have a partnership and start your business as such, the only real advantage to forming a corporation would appear to be that a corporate structure will semi-protect the property you personally own.

As an example, you own a home and car. You form a corporation to protect these possessions from business losses. Yet, if you can be found guilty of misusing corporate funds, your business creditors can pierce the corporate shield and come after your possessions.

Basically, if you invest everything you have in your business, as most newcomers do, you don't usually need a corporation because you have nothing to protect. Your household possessions, personal belongings, generally your car, and even a portion of the equity in your home is protected by the homestead provision of the Federal Bankruptcy Act, and cannot be taken away from you.

As a sole proprietor or partner of a business you'll be paying taxes on your overall earnings, much the same as if you were holding down a salaried or hourly paid job. Whether you do or don't take out money as a salary will have no bearing on the earnings of your business and tax return.

The often advertised advantage of incorporating, that you can manipulate your salary in order to save on tax dollars, is real because of corporation laws. However, the IRS frowns on this practice. When your business is successful and making a lot of money, definitely check with your accountant on the advantages of incorporating.

As a corporation, you'll be subject to a number of other drawbacks as well: generally higher state taxes, stricter laws concerning the operation of your business, more elaborate accounting procedures, and legal papers that are required just about every time you make a major move or sign almost any contract. Thus, your legal and accounting fees will be much higher as a corporation than will those required for a sole proprietorship type of business.

As a sole proprietor or partnership, you'll find many areas require the registration of your business name. The cost however, is minimal, ranging from $5 to $100. About the best way to find out what laws apply in your area, is to call your bank and ask if they need a fictitious name registration card or certificate in order for you to open a business account.

Selecting a name for your business is quite important to you and particularly relative to advertising. Your business name should describe the product or services you offer. Fancy names such as, Linda's Clipping Service will lose potential "walk-in and passing" customers to the beauty shop across the street that calls itself, Patti's Beauty Salon or Jane's Hair Styling Shop.

The advantage of using your full name in the title of your business, such as Johnny Jones' Meat Lockers, has the advantage of making credit somewhat easier to come by - provided you pay your bills on time - but it also includes the disadvantage of confining your services to a local or at most, a regional area.

Should you buy, lease, or rent a space for your business? think twice before you make any decision along these lines. Most businesses tend to grow quickly or they never get off the ground.

There are a few exceptions, but only a very few, that tend to grow at a modified rate.

So, buying a piece of property and setting up your business on or within that property, obligates you to ownership regardless of what happens to your business.

Leases are almost always very strong contracts written by attorneys to the advantage of the property-owner. When you sign an agreement to pay someone for the use of their space over any length of time, you're "nailed in" to paying for that space regardless of what happens to your business.

In the beginning, it's wise to either get the shortest-term lease possible, or arrange to rent with an option to lease at a later date. This does not apply to a retail business, unless your particular business happens to be an untried one.

Definitely, you should open a business bank account. In selecting a bank for your business, scout around and look for one that can, and will help you. Determine what your banking needs will be, and then via telephone, interview the managers of the banks in your area. The important convenient bank to your business location.

A point to remember: the closer you can make the relationship between you and the bank manager, the better your chances are going to be for approval on loans and/or special favors you may need at a later date.

Try to become acquainted with as many of the bank employees as possible. The better you know them, the more courtesies they'll be extending especially to you in the course of your association.

Just as a doctor is a specialist in his field, and you go to him for medical problems, your banker is a specialist in his field and you should go to him for your money problems. In business, you'll have to learn that everyone is an expert in his own line of work, and in your associations with other business people, refrain from acting like a "sharpie" and/or pretending that you know exactly how everything works in someone else's specialty.

You'll find that very often, different banks specialize in different types of businesses. As an example, you're sure to find banks that specialize in real estate transactions, export- import businesses, and even manufacturing operations only.

What I'm saying here is that if you're planning to sella fairly expensive item, your customers will probably need and/or want financing. It will behoove you to select a bank familiar with your type of product that will afford your customers, through you, contract financing.

Some of the questions you should ask of your banker include the following:

Is it necessary to maintain a certain balance in your account before the bank will approve a loan for you? What qualifications must you have in order to obtain a line of credit with the bank?

Does the bank limit the number of loans, or types of loans it will approve for small businesses?

What is the bank's policy regarding the size of a check you might deposit that requires holding for collection?

And what about checks less than that amount - will they be immediately credited to your account?

In almost all types of businesses, it will be to your benefit to set up with your bank, a method of handling VISA, Master Charge, and regional credit cards. The important thing here is to ultimately set up your account in the bank that will service all of these credit transactions for you - one stop for all your banking needs. In most instances, you'll find that having the capability to fill orders/make sales via credit card transactions, will increase your volume of sales appreciatively.

Once you've made the decision as to which bank is going to handle your account, you'll need your Social Security Number or your Federal Employer's Identification Number, your driver's license, the fictitious name certificate, and if you're requesting a VISA or Master Charge franchise, you'll also need a financial statement.

For corporations, you'll also need a corporate resolution approving of the opening of your business account.

There are different policies exercised in just about every state regarding installation/hook-up charges by the telephone and utility companies. Some require a deposit, and some don't.

You'll find that a great number of city business license departments are there solely for the purpose of collecting another tax. Depending on the type of business you're asking a license for, the building and zoning people may inspect your premises for soundness of structure and safety. Generally, you won't encounter any difficulties - you simply pay your fee to operate your business in that city, and the clerk types your name onto a city license certificate.

Relative to sales tax permits and licenses, each state's rules and regulations very widely. The best thing to do is call your state offices and ask for information concerning registry and collection procedures. Many states require an advance deposit or bond, and you'll find that some wholesalers or manufacturers will not sell to you at wholesale prices until you can show them your sales tax permit or number.

Should your business entail selling your products or services across state lines, in another state, you're not required to collect taxes except in those where you have offices or stores.

You may find also that your particular business requires the collection of Federal Excise Taxes. For information along these lines, check in with your local office of the Internal Revenue Service.

Some states also require certain businesses to hold state licenses, such as those required in many states for TV Repairmen.

These are known as "occupational permits" and are most often required of barbers, hair stylists, real estate people and a number of other consumer oriented businesses. If you have any doubts, check with your state offices for a list of those occupations that require licensing.

Any business doing business in any type of interstate commerce is subject to federal regulations, usually through the Federal Trade Commission. This means that any business that shops, sells or advertises in more than one state is subject to such regulation, and this includes even the smallest of mail order operations.

Normally, very few business people ever have and contact with the federal regulatory agencies. The only exceptions being when there is a question of your operating your business unethically or illegally.

Any business that sells or distributes food in any manner almost always requires a county health department permit. If your business falls into this category, simply call the county health department and invite them out to your place of business for an inspection. The fees generally range from about $25, depending on the size of your business when they first inspect it for permit approval.

There are also a number of businesses that require inspection by a fire marshall, and fire department approval. Generally, these are those that handle flammable materials or attract large numbers of people, such as a theater. Overall, the local fire department has to be allowed to inspect your premises whenever they desire to do so.

You may also run into a requirement for an air and/or water pollution control permit. These specifically apply to any business that burns anything, discharges anything into the sewers or waterways, or use any gas-producing product, such as a paint sprayer.

Without a doubt, you'll need to check on local regulations relating to advertising display signs. Each city or township makes its own rules and then enforces those rules according to its own thinking -check before you contract to have a sign made for your business.

The design and placement of your sign is very important to your business - specifically to retail establishments - but let me remind you that your business sign is usually the first thing a potential customer sees and as such, it should catch his eye and leave an impression that lasts. It would be a good idea to ride around your town and take a look at the signs that catch your eye, and try to determine the impression of the business that sign leaves on you. This is a basic learning formula for determining the design, size and placement of your business sign.

Some of the other things to consider before opening for business - If you intend to employ one or more employees, you'll be required to deduct Federal Income Taxes, and Social Security payments from their checks. This will involve your filing for a Federal Tax Number and necessitates contact with your local IRS Office.

Most states have "unemployment taxes" which will have to be deducted from the paychecks of any employees you hire. And there are a number of states that have income taxes - disability insurance - and any number of other taxes. Again, the best thing to do is check with your local office of the IRS. And above all else, don't forget to ask for the rules of the minimum wage law, and comply.

When your business grows to the point of needing additional help, don't be afraid to look for and hire the help you need. when you're ready to hire someone, simply run an ad in your local paper and/or register your needs with the local office of your state's employment service. Businesses either grow or die, and those that grow eventually need more people in order to continue growing.

When that time comes, hire the additional people you need, and your business will continue growing. If you don't, for whatever reason, you'll find yourself married to your business and your business growth stymied.

Regardless of how small your business is when you begin, never walk in with the thought in mind that it's something to keep you busy. Anyone with an attitude of that kind is a fool. You begin and make a business successful in order to realize financial freedom. Establish your business. Put it on its feet, and then hire other people to do the work for you. And those businesses that require an operations manager, or someone to run a phase of the business you're too busy to handle, hire the person needed or the business will surely suffer.

To protect the investment of your business, you need business insurance. If you've never had any experience with business insurance, simply look under the heading of "business insurance" in your phone directory. Ask for bids from several different companies or agents...Primarily, you should have a policy that gives you general liability, fire, workmen's compensation, business interruption, and vehicle coverage. You amy also want coverage against possible losses related to burglary, robbery, Life & Accident, Key Man, and Fidelity Bonds.

As the sole proprietor of a business, you won't be paid as an employee, so there will be no income tax deducted from whatever you withdraw from the company's earnings. What you'll have to do is a gain check with the IRS Office for a Tax Guide For Small Businesses Handbook, and probably end up filing an estimated tax return on a quarterly basis.

The minute you open your doors for business, you'll have to spend some time engaged in the work of bookkeeping. Exactly how, and using what forms, you keep books, should be on the recommendations of a good tax counselor...The same holds true for your overall business and/or payroll accounting system. Look for an experienced CPA that knows the accounting problems to your particular kind of business, and solicit his advise/counseling.

If your business is going to involve the possible purchase or lease of operating equipment, again seek the help of your tax counselor for the most advantageous method of obtaining the needed equipment.

Basically, arranging for your suppliers to give you materials on credit will depend upon your honesty and personal financial statement. The best way is usually a personal visit to the person with the power to approve or disapprove of credit at the company where you want to set up a credit account. Show him your financial statement, and explain your prospects for success. Then assure him that you've always honored all of your obligations, and that if ever there's a question or problem, you'd like for him to call you at home. And of course, give him your home phone number.

We won't go into the exigencies of advertising your products, services or business here, but there is something along these lines you should always keep in mind. The best kind of advertising your business can receive is that you don't really pay for - publicity.

When something unusual happens to you, your business, or your employees - that's news, so be sure to tell the news media in your area about it.

The most important ingredient of your eventual success will be the soundness of the planning you did before you started your business. Any number of bad things can really throw your business into a tailspin, but it you've done your homework well - really set up a detailed business plan before starting - your losses or setbacks will be minimal. Success takes planning, and within this report, you've got a basic checklist...The rest is up to you...Good luck, and may your life overflow with success in all that you undertake from this moment forward.