Small Business Resources in Washington

23 04 2010

Here are some great resources for entrepreneurs and small business owners in Washington. It’s always nice to have a go-to list, so here’s a start. And if you have any favorites that I’ve not listed, please comment and share! Think big and act strategically.

Start & Grow a Business in Washington:

  • Choose Washington – Providing technical and financial assistance to communities and businesses for trade and economic development, to encourage retention and expansion of employment and operations in the state of Washington.
  • Washington Guide for Small Business 2010 – This directory assembles, in one handy reference, information on organizations, services, and programs throughout the state to help Washington businesses survive.
  • Access Washington: Plan a Business – Understanding who to turn to for research and planning, business advice, financial assistance, regulatory information, and the basics of running a small business is vital to your success.
  • Washington Small Business Development Centers – Promoting economic vitality by providing advice, training and research to entrepreneurs and existing businesses statewide.
  • Washington State Office of Minority and Women Owned Businesses – Develops programs designed to improve the contributions of minority and women-owned small businesses to the Washington State economy.
  • Community Capital Development – A consortium of non-profit community development organizations that provide technical assistance, training, counseling, and loans.
  • Seattle SCORE – Providing free and confidential one-on-one business consulting  for interested individuals.

Legal Resources:

Local Networks & Connections:

News & Current Topics:

National Associations:

Photo courtesy of Topikito.

largest and most diverse network of influential business leaders in the Puget Sound region.

Business Legal Structures 101

19 04 2010

Choosing the legal structure of your business is not only important, it’s crucial to determining how you operate your business. The legal entity you choose will affect how much personal liability you face, how much you pay in taxes and how in-depth your new company’s record keeping will need to be. It’s basically the bare bones structure of your business – you need it in order to execute your vision.

Hopefully, if you feel like you’re at a fork in the road, this post may lend some clarity. The following list includes the eight basic business entity types:

  1. Sole Proprietorship;
  2. Partnership;
  3. Limited Partnership;
  4. Limited Liability Company (LLC);
  5. Corporation (for-profit);
  6. S Corporation;
  7. Nonprofit Corporation (not-for-profit); and
  8. Cooperative.

The best entity for you will depend on the type of business you want to run, your potential exposure to lawsuits, the number of owners and whether you want the ability to raise capital or transfer shares. It’s smart, and in many cases necessary, to consult a lawyer or accountant when making your choice.

Based on several great resources that I referenced at the base of this post, I’ve listed below the characteristics, advantages, and disadvantages of each entity below, including the relevant tax related information.

Sole Proprietorships and Partnerships:

For many new businesses, the best initial ownership structure is either a sole proprietorship or — if more than one owner is involved — a partnership.

Sole proprietorships and partnerships make sense in a business where personal liability isn’t a big worry — for example, a small service business in which you are unlikely to be sued and for which you won’t be borrowing much money for inventory or other costs.

Sole Proprietorships

A sole proprietorship is a one-person business that is not registered with the state like a limited liability company (LLC) or corporation. You don’t have to do anything special or file any papers to set up a sole proprietorship — you create one just by going into business for yourself.

Legally, a sole proprietorship is inseparable from its owner — the business and the owner are one and the same. This means the owner of the business reports business income and losses on his or her personal tax return and is personally liable for any business-related obligations, such as debts or court judgments.

Advantages of a Sole Proprietorship:

  • Easiest and least expensive form of ownership to organize.
  • Sole proprietors are in complete control, and within the parameters of the law, may make decisions as they see fit.
  • Sole proprietors receive all income generated by the business to keep or reinvest.
  • Profits from the business flow directly to the owner’s personal tax return.
  • The business is easy to dissolve, if desired.

Disadvantages of a Sole Proprietorship:

  • Sole proprietors have unlimited liability and are legally responsible for all debts against the business. Their business and personal assets are at risk.
  • May be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans.
  • May have a hard time attracting high-caliber employees or those that are motivated by the opportunity to own a part of the business.
  • Some employee benefits such as owner’s medical insurance premiums are not directly deductible from business income (only partially deductible as an adjustment to income).

Federal Tax Forms for Sole Proprietorship: (only a partial list and some may not apply)

  • Form 1040: Individual Income Tax Return
  • Schedule C: Profit or Loss from Business (or Schedule C-EZ)
  • Schedule SE: Self-Employment Tax
  • Form 1040-ES: Estimated Tax for Individuals
  • Form 4562: Depreciation and Amortization
  • Form 8829: Expenses for Business Use of your Home
  • Employment Tax Forms

For partnerships and the remaining business entities, read below.

Read the rest of this entry »

Hooray for Local Seattle Businesses!

1 04 2010

It’s well known that I’m a big advocate for small businesses. And today I’m even more excited about supporting the Seattle business community.

After the demise of Washington Mutual in 2008, Seattle lost the eight year sponsor of its 4th of July fireworks show drawing tens of thousands of people to the shores of Lake Union. Chase, which absorbed Washington Mutual, agreed to sponsor the show last year, but not again. (Ivar’s also pulled the plug on its annual “4th of Jul-Ivar’s” show last year after 44 years.) So when One Reel, the nonprofit that organizes the show, announced this week that it was not able to secure a corporate sponsor for the annual fireworks show this year – Seattle restaurateur and chef Tom Douglas pledged $5,000 to keep the show going and challenged other Seattle business leaders to do the same. Talk about a community effort – sidelining several other donors, Microsoft and Starbucks each doled out $125,000.

And the donations keep rolling in. Check out which Seattle businesses are pledging to save the show this year; the list is impressive and continually growing.

I first learned of Tom’s 4th of July donation efforts through his restaurant’s Twitter account. But it’s not unknown that Tom is acutely interested in developing a supportive business community – particularly a supportive food community. Whether you liken it as Tom Douglas University or the Tom Douglas Universe, as mapped out in the April 2010 issue of Seattle Magazine, think of the velocity effect of his ambition. With five restaurants, a bakery, a catering business, a radio show, a line of spice rubs, and a kitchen tool line on Amazon, he’s developed quite a business – and he’s opening two more restaurants!

It’s understandable that when money is tight, companies may choose to donate funds toward partnerships held in a different regard, and with less liability. But after an almost half a century long community tradition, it’s hard to muster the thought of not having a fireworks show in Seattle on the 4th of July. A community campaign seems fitting.

Cheers to Tom Douglas. And cheers to all the area businesses that are donating to support Seattle’s 4th of July fireworks show over Lake Union. Buying local can surely have an explosive effect – I’ll see you underneath the fireworks in a few months.

…If you’d like to make an individual donation, click here.

Photo courtesy of Jenine Anderson.