Checklist for Starting a Epoxy Countertop Business: Essential Ingredients for Success
If you are thinking about going into business, it is imperative that you watch this video first! it will take you by the hand and walk you through each and every phase of starting a business. It features all the essential aspects you must consider BEFORE you start a Epoxy Countertop business. This will allow you to predict problems before they happen and keep you from losing your shirt on dog business ideas. Ignore it at your own peril!
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A Step by Step
Guide to Starting a Small Business
This is a
practical manual in a PDF format, that will walk you step by step through all the
essential phases of starting your Epoxy Countertop business. The book is packed with
guides, worksheets and checklists. These strategies are
absolutely crucial to your business' success yet are simple and
easy to apply.
Copy the following link to your browser and save the file to your PC:
https://www.bizmove.com/free-pdf-download/how-to-start-a-business.pdf
How to Obtain Equity Capital
Unlike debt capital, equity capital
is permanently invested in the business. The business has no
legal obligation for repayment of the amount invested or for
payment of interest for the use of the funds.
Share of Ownership
The equity investor shares in the
ownership of the business and is entitled to participate in any
distribution of earnings through dividends, in the case of
corporations, or drawings, in the case of partnerships.
The extent of the equity investor's
participation in the distribution of earnings of a corporation
depends upon the number of shares held. In a partnership, the
equity investor's participation will depend upon the ownership
percentage specified in the partnership agreement.
Voting Rights
The equity investor's ownership
interest also carries the right to participate in certain
decisions affecting the business.
Legal Liability
The personal liability of equity
investors for debts of the business depends upon the legal form
of the organization. Basically, the investor who acquires equity
in a partnership could be personally liable for debts of the
business if the business should fail. In a corporation, the
liability of equity investors (shareholders) is limited to the
amount of their investment.
In other words, if a partnership
should fail, creditors could have a claim against the personal
assets of the individual partners. If a corporation should fail,
the only claims of creditors would be against any remaining
assets of the corporation, not against any personal assets of
the shareholders.
Equity Investor's Compensation
The purchaser of an equity interest
in a business expects to be compensated for the investment in
any of the three following ways:
Income from earnings distribution of
the business, either as dividends paid to corporate
shareholders or as drawings in a partnership.
Capital gain realized upon sale of
the business.
Capital gain realized from selling
his or her interest to other partners.
Capital gain is the term used to
describe any excess of the selling price of an investment over
the initial purchase price. For example, if you purchased an
equity interest in a business for $5,000 and later sold it for
$8,000, you would realize a capital gain of $3,000.
The equity investor in a partnership
is entitled to a share of all drawings paid out to partners at a
percentage established when the interest was purchased. For
example, assume an investor acquired a 20% interest in a
partnership. The distribution of earnings to all partners in a
given year is $20,000. The holder of the 20% interest would
receive $4,000.
The dividends received by the equity
investor in a corporation depend upon the number of shares held.
For example, if a corporation voted a dividend of $1.50 per
share in a given year, the owner of 1,000 shares would receive a
dividend of $1,500 (1,000 x $1.50).
If a business is sold or liquidated,
the equity investor shares in the distribution of the proceeds.
As with an earnings distribution, the share of the proceeds in a
corporation sale depends upon the number of shares held. In a
partnership, each partner's share of the proceeds is based upon
the percentages specified in the partnership agreement.
If the proceeds received by the
equity investor exceed the original purchase price, this excess
is considered a capital gain and taxed accordingly.
If the business were liquidated, the
assets would be sold and the proceeds would first be used to
discharge any outstanding obligations to creditors. The balance
of the proceeds, after these obligations had been fulfilled,
would be distributed to the equity investors in accordance with
their share-holdings or percentages of interest.
As a business prospers and grows, the
value of an equity interest grows with it. Therefore, the equity
investor may be able to sell his or her interest at a price
higher than the initial acquisition cost.
For example, an equity investor in a
corporation may have purchased his or her interest at $10.00 per
share. As the business grows, he or she is able to sell the
shares at $15.00 per share, realizing a capital gain of $5.00 on
each share sold.
In many cases, the equity investor in
a small business is primarily interested in capital gains. Aside
from the tax advantages, the equity investor usually realizes
that the earnings of the small business are better retained in
the business than distributed as dividends or drawings.
Retention of earnings permits the business to grow so that the
value of the equity interest increases. The investor can realize
a return on the investment through a capital gain derived from
selling his or her shares or upon sale of the business.
Public Stock Offerings
When businesses are first organized,
equity capital is usually secured from a combination of sources
such as the original owners' personal savings and through
solicitations from friends, relatives, or other persons known to
have financial capability for such investments.
As the need for equity capital
becomes greater, say $200,000 to $1,000,000, it is customary to
seek capital through the services of professional finders, who
receive a fee for securing the capital needed. These finders
normally have access to wealthy individuals, capital management
companies, estates, trusts, and others with sufficient capital
to make such an investment.
At higher levels of capital need,
shares are sold through public offerings. The public offering
seeks to attract a large number of investors to purchase stock,
in large or small amounts. A market is then created for the
stock. Shares purchased by the public, as well as the shares
held by the original owners, and any subsequent equity investors
can also be sold at the going market price. These transactions
do not have a direct effect on the business' capital position
since it does not receive the proceeds from the sale.
The equity investor can realize a
capital gain by selling shares at prices higher than the
original purchase price.
Risks of Equity Investment
The equity investor assumes
substantial risk. Unlike the secured creditor, the equity
investor has no specific claim against any assets of the
business. In liquidation, all claims of all creditors must be
satisfied before any remaining assets become available for
distribution to the owners. Even then, the equity investor's
participation in the proceeds is restricted to a share that is
proportionate to the number of shares held or the partnership
interest.
Since the risks of equity investment
are so substantial, particularly in the case of small
businesses, equity investors expect a considerably higher
return than the lender.
A lender might be willing to loan
money to a business at an interest rate of 10% or 12% since it
has certain legal protections in the event of default or
liquidation. The investor of equity capital in the same business
might seek a far higher return, perhaps 20%, 50%, or even more
in order to compensate for the added risk of equity investment.
If you Operate a factory, wholesale outlet,
retail store, Service store, or are a builder, you'll need to
sell. However good your
product is, no matter what consumers
think of this, you need to sell to endure.
Direct
selling methods are through private sales efforts, Advertising
and, for most companies, exhibit - like the packaging and
styling of the product itself - in windows, at the
establishment, or even both. Establishing a good reputation with
the general
public through anyhow and special services is an
indirect process of selling. While the latter should never be
neglected, this
short discussion will be confined to direct
marketing methods.
To establish Your Company on a firm
footing requires a great deal Of competitive personal selling.
You might have established
competition to overcome. Or, if
your thought is fresh with minimal or no competition, you've got
the additional difficulty of
convincing people of the value
of this new idea. Private selling work is nearly always
necessary to accomplish this. If you aren't
a good
salesperson, seek a worker or asociate who's.
A second
way to create sales is by advertising. This may be done Through
newspapers, shopping newspapers, the yellow pages section
of
the phone directory, along with other published periodicals;
radio and television; handbills, and direct email. The media you
choose, as well as the message and style of presentation,
depends upon the particular customers you would like to attain.
Plan and
prepare advertisements with care or it will be
unsuccessful. Most media will have the ability to describe the
characteristics of
their audience (readers, listeners, etc.).
Ever since your initial planning described the characteristics
of your potential
customers, you want to match these
characteristics with the media crowd. If you're selling
expensive jewelry, don't advertise in
high school newspapers.
If you repair bicycles, you probably need to.
Advertising can be quite expensive. It is wise to place a
limitation upon An amount to spend, then remain within that
limit. To
assist you in deciding how much to spend, study the
working ratios of similar companies. Media advertising
salespeople will help
you plan and even prepare
advertisements for you. Make sure you tell them your budget
limitations.
A third Way of sparking sales is effective
displays both in Your place of company and out it. If you've had
no prior expertise in
display work, you are going to want to
examine the subject or turn the task over to somebody else.
Watch displays of different
companies and read books, trade
publications, as well as the literature supplied by equipment
manufacturers. It could be smart to
employ a display expert
on your opening display and unique occasions, or you could
obtain the help of one on a part-time
foundation. Much is
dependent upon your kind of business and what it requires.
The appropriate amount and types of selling effort to
utilize vary from business to business and from owner to owner.
Some
companies prosper with low-key sales efforts. Others,
such as the used-car lots, thrive on competitive, hoop-la
promotions. In any
event, the importance of successful
selling can't be over-emphasized.
On the other hand, do
not lose sight of your major objective - to Make a profit.
Everyone can produce a large sales volume selling
dollar
bills for ninety bucks. But that won't last long. Keep control
of your own expenses, and price your merchandise carefully.
Record Keeping. 1 essential element of business management
is the keeping of adequate records. Study after study shows that
many
supervisor failures can be attributed to inadequate
records or the owner's failure to use what information was
accessible .
Without records, the businessperson can't see in
advance that way the company is going. Up-to-date records may
predict impending
disaster, forewarning one to take action to
prevent it. While extra work must keep an adequate set of
records, you will be more
than paid for the effort and cost.
If you are not prepared to maintain adequate records -
or have someone Keep them - you shouldn't attempt to operate a
small
business. At a minimum, records are needed to
substantiate:
1. Your yields under taxation laws,
including income tax and social Safety laws;
2. Your
request for credit from equipment makers or a loan From a bank;
3. Your claims about the business, in case you wish to sell
it.
But most important, you need them to run your
business successfully And to raise your profits. Having an
adequate. Yet easy,
bookkeeping system you may answer such
questions as:
How much company I doing? What are my
expenses? Which seem to be too large? What is my gross Profit
margin? My net profit? How
much am I collecting in my charge
enterprise? What is the state of my working capital? How much
money do I have on hand? Just how
much in the bank? Just how
much do I owe my Providers? What is my net worth? That is,
What's the worth of my ownership of The
enterprise? What are
the tendencies in my Receipts, expenses, gains, and net worth?
Is my financial situation improving Or growing
worse? How can
my assets compare with what I owe? What's the Percentage of
return on my investment? How many cents from every
dollar of
Sales are net gain? Answer these and other questions by planning
and studying balance sheets and profit-and-loss
statements.
To do this, it's Important to record information regarding
transactions as they happen. Keep This data in a detailed
and
orderly fashion and you'll have the ability to answer the above
questions. You will also possess the answers to these other
vital questions About your company as: What services or products
do my customers enjoy best? Next best? Not at all? Can I take
the
merchandise most often asked? Am I Qualified to render
the professional services they need most? Just how a Lot of my
charge
Clients are slow payers? Shall I change to money only,
or use a credit card Charge plan?
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