The Palmdale Chamber of Commerce has included pertinent phone numbers to help you through the formative stages of your venture.
The information contained at this section of our website will start you on your way to starting a new business. For information visit www.sba.gov.
HOW TO START A SMALL BUSINESS
Starting and managing a business takes motivation, desire and talent. It also takes research and planning.
Like a chess game, success in small business starts with decisive and correct opening moves. And, although initial mistakes are not fatal, it takes skill, discipline and hard work to regain the advantage.
To increase your chance for success, take the time up front to explore and evaluate your business and personal goals. Then use this information to build a comprehensive and wellthought out business plan that will help you reach these goals.
The process of developing a business plan will help you think through some important issues that you may not have considered yet. Your plan will become a valuable tool as you set out to raise money for your business. It should also provide milestones to gauge your success.
A sole proprietorship is set up to allow an individual to own and operate a business by him/herself. A sole proprietor has total control, receives all profits from and is responsible for taxes and liabilities of the business
A domestic corporation generally is a legal entity which exists separately from its owners. While normally limiting the owners from personal liability, taxes are levied on the corporation as well as on the shareholders.
Limited Liability Company
A domestic limited liability company generally offers liability protection similar to that of a corporation but is taxed differently. Domestic limited liability companies may be managed by one or more managers or one or more members.
A domestic limited partnership may provide limited liability for some partners. There must be at least one general partner that acts as the controlling partner while the liability of limited partners is normally limited to the amount of control or participation they have engaged in.
A general partnership must have two or more persons engaged in a business for profit. Except as otherwise provided by law, all partners are liable jointly and severally for all obligations of the partnership unless agreed by the claimant. Profits are taxed as personal income for the partners.
Limited Liability Partnership
A limited liability partnership is a partnership that engages in the practice of public accountancy, the practice of law or the practice of architecture, or services related to accountancy or law.
FICTITOUS BUSINESS NAME (DBA)
When a firm does not specifically include the name of the owner in its title, a FICTITOUS BUSINESS NAME STATEMENT must be filed with the County Recorder. The first step is to decide on the business’ name. Check the name on-line to verify whether that name is being used. (For Los Angeles County use http://www.lavote.net/CLERK/FBN_Search.cfm) It is recommended that a few choices are at hand when the searching.
The second step is to choose a local newspaper office to file the DBA (Doing Business As). The newspaper office has the required forms; which must be filled out in full, and will file your statement with the County four (4) times, as required by law. Fees vary widely.
NEWSPAPERS SERVING THE ANTELOPE VALLEY
ANTELOPE VALLEY PRESS
LOS ANGELES TIMES
ANTELOPE VALLEY JOURNAL
Every business is different, and has its own specific cash needs at different stages of development, so there is no generic method for estimating your startup costs. Some businesses can be started on a shoestring budget, while others may require considerable investment in inventory or equipment. It is vitally important to know that you will have enough money to launch your business venture.
To determine your startup costs, you must identify all the expenses that your business will incur during its startup phase. Some of these expenses will be one-time costs such as the fee for incorporating your business or price of a sign for your building. Some will be ongoing, such as the cost of utilities, inventory, insurance, etc.
While identifying these costs, decide whether they are essential or optional. A realistic startup budget should only include those things that are necessary to start that business. These essential expenses can then be divided into two separate categories: fixed expenses (or overhead) and variable expenses (those related to producing sales for the business). Fixed expenses will include things like the monthly rent, utilities, administrative costs, and insurance costs. Variable expenses include inventory, shipping and packaging costs, sales commissions, and other costs associated with the direct sale of a product or service.
Raising capital is the most basic of all business activities, but it may not be easy; in fact, it is often a complex and frustrating process. However, if you have studied and planned effectively, raising money for your business will go as smoothly as possible.
Finding the Money You Need
There are several sources to consider when looking for financing. It is important to explore all of your options before making a decision.
Personal savings: The primary source of capital for most new businesses comes from savings and other personal resources. While credit cards are often used to finance business needs, there are usually better options available, even for very small loans.
Friends and relatives: Many entrepreneurs look to private sources such as friends and family when starting out in a business venture. Often, money is loaned interest-free or at a low interest rate, which can be beneficial when getting started.
Banks and credit unions: The most common sources of funding, banks and credit unions, will provide a loan if you can show that your business proposal is sound.
Angel Investors and Venture capital firms: These individuals and firms help expanding companies grow in exchange for equity or partial ownership.
A source of venture capital is the SBA\’s Small Business Investment Company (SBIC) Program.
Terms of loans vary from lender to lender, but there are two basic types: short-term and long-term.
Generally, a short-term loan has a maturity of up to one year. These include working capital loans, accounts receivable loans and lines of credit.
Long-term loans have maturities greater than one year but usually less than seven years. Real estate and equipment loans may have maturities of up to 25 years. Long-term loans are used for major business expenses such as purchasing real estate and facilities, construction, durable equipment, furniture and fixtures, vehicles, etc.
SBA loan programs are intended to encourage long-term small business financing, but actual loan maturities are based on the ability to repay, the purpose of the loan proceeds, and the useful life of the assets financed. However, maximum loan maturities have been established: twenty-five years for real estate; up to ten years for equipment (depending on the useful life of the equipment); and generally up to seven years for working capital. Short-term loans are also available through the SBA to help small businesses meet their short term and cyclical working capital needs.
Most Business Loan applications ask you to submit a Business Plan. The following outline of a typical business plan can serve as a guide. You can adapt it to your specific business. Breaking down the plan into several components helps make drafting it a more manageable task.
- Give a detailed description of the business and its goals.
- Discuss the ownership of the business and the legal structure.
- List the skills and experience you bring to the business.
- Discuss the advantages you and your business have over your competitors.
- Discuss the products/services offered.
- Identify the customer demand for your product/service.
- Identify your market, its size and locations.
- Explain how your product/service will be advertised and marketed.
- Explain the pricing strategy.
- Explain your source and the amount of initial equity capital.
- Develop a monthly operating budget for the first year.
- Develop an expected return on investment and monthly cash flow for the first year.
- Provide projected income statements and balance sheets for a two year period.
- Discuss your break even point.
- Explain your personal balance sheet and method of compensation.
- Discuss who will maintain your accounting records and how they will be kept. Provide “what if” statements that address alternative approaches to any problem that may develop.
- Explain how the business will be managed on a day to day basis.
- Discuss hiring and personnel procedures.
- Discuss insurance, lease or rent agreements, and issues pertinent to your business.
- Account for the equipment necessary to produce your products or services.
- Account for production and delivery of products and services.
- Summarize your business goals and objectives and express your commitment to the success of your business.
- Once you have completed your business plan, review it with a friend or business associate or a Service Corps of Retired Executives (SCORE) or Small Business Development Center (SBDC) counselor.
- When you feel comfortable with the content and structure make an appointment to review and discuss it with your lender. The business plan is a flexible document that should change as your business grows.
- Assess your strengths and weaknesses
– Establish business and personal goals
– Assess your financial resources
– Identify the financial risks
– Determine the start-up costs
– Decide on your business location
– Do market research
– Identify your customers
– Identify your competitors
– Develop a marketing plan
- Select a lawyer
– Choose a form of organization (proprietorship, partnership, or corporation, for example)
– Create your business (register your name, incorporate the business, etc.)
– Select an accountant
– Prepare a business plan
– Select a banker
– Set up a business checking account
– Apply for business loans (if applicable)
– Establish a line of credit
– Select an insurance agent
– Obtain business insurance
- Get business cards
– Review local business codes
– Obtain a lease
– Line up suppliers (if applicable)
– Get furniture and equipment
– Obtain a business license or permit (if applicable)
– Get a federal employer identification number (if applicable)
– Get a state employer i.d. number (if applicable)
– Send for federal and state tax forms
– Join a professional organization
– Set a starting date
CITY OF PALMDALE
- City of Palmdale
38250 Sierra Hwy.
Palmdale, CA 93550
Business Licensing: 661.267.5434
Building & Safety: 661.267.5353
Planning Department: 661.267.5200
LOS ANGELES COUNTY
- COUNTY OFFICES
335-A E. Ave. K-6
Lancaster, CA 93534
- COUNTY REGISTRAR RECORDER
1028 W. Ave. J-2
- COUNTY BUSINESS LICENSES: 213.974.0093
ENVIRONMENTAL HEALTH LICENSES: 661.723.4492
COUNTY ENGINEER: 661.723.4440
WEIGHTS & MEASURES: 661.7234489
NEW CONSTRUCTION: 661.723.4551
- SHERIFF’S DEPARTMENT
750 E. Avenue Q
- FIRE MARSHALL
335 E. Ave K6
STATE OF CALIFORNIA
- STATE SALES & RESALE LICENSE
To sell merchandise you must obtain a SALES TAX PERMIT
and post any required security deposit.
- STATE BOARD OF EQUALIZATION (resale license)
1800 30th St. Suite #380
Bakersfield, CA 93301-1922
FAX: 661 395-2588
- EMPLOYMENT DEVELOPMENT DEPT (EDD)
1817 E. Ave Q A-12
- OCCUPATIONAL SAFETY & HEALTH
6150 Van Nuys Blvd.,#307
Van Nuys 91401
- STATE COMPENSATION INSURANCE FUND
655 N. Central Avenue
Glendale, CA 91203
- COMMERCE & ECONOMIC DEVELOPMENT
980 9th Street, Suite 2450
Sacramento, CA 95814-2719
- STATE FRANCHISE TAX BOARD
300 S. Spring St Suite 5704
Los Angeles, CA 900013-1265
- SECRETARY OF STATE
1500 11th Street
Sacramento, CA 95814
- ALCOHOLIC BEVERAGE CONTROL BOARD
6150 Room 220
Van Nuys, CA 91401
- CONTRACTORS STATE LICENSE BOARD
Post Office Box 26000
Sacramento, CA 95826
- FEDERAL INTERNAL REVENUE SERVICE (IRS)
6230 Van Nuys Blvd.
To obtain a FEDERAL TAX IDENTIFICATION #, or for any questions regarding FEDERAL SOCIAL SECURITY TAX (FICA), or FEDERAL UNEMPLOYMENT TAX, FORM 22-4, CIRCULAR, or SMALL BUSINESS KIT.
- FOOD & DRUG ADMINISTRATION
- PATENT, COPYRIGHT & TRADEMARKS
- FEDERAL COMMUNICATION COMMISSION (FCC)
445 12th Street, SW
Washington, DC 20554
- BUREAU OF ALCOHOL, TOBACCO & FIREARMS
350 South Figueroa Ste., Suite 800
Los Angeles, CA 90071
- TRADEMARKS AND TRADENAMES
Commissioner for Trademarks
2900 Crystal Drive
Arlington, VA 22202-3513