FAQ
Frequently-asked questions for small business
Think you’re alone in trying to figure out what to do next? The following questions have been asked repeatedly by new business owners, existing business owners, and potential business owners. You are far from alone. Read on… you may be surprised to find many of your questions here. If you don’t see it here, contact an Alaska SBDC center in your area and get your answer today.
You will be your own most important employee, so an objective appraisal of your strengths and weaknesses is essential. Some questions to ask yourself are:
- Am I a self-starter?
- How well do I get along with a variety of personalities?
- How good am I at making decisions?
- Do I have the physical and emotional stamina to run a business?
- How well do I plan and organize?
- Are my attitudes and drive strong enough to maintain motivation?
- How will the business affect my family?
You can also try the following quiz from the U.S. Small Business Administration: Quiz for Small Business Success
Before you get a business license you'll probably want to think through your choice of business structure carefully. (See "What kind of business license should I buy") However if you've already gone through the steps and are certain you've chosen the right type, you can obtain your license online by visiting the Alaska Division of Corporations and Professional Licensing.
The four things to consider when purchasing a business license are:
- Exposure to liabilities
- Cost of creation and ongoing maintenance
- Ability to raise money
- Tax implications
Confused yet? That's okay — our business advisors are available to help you think through these four considerations more carefully, though ultimately you'll want to see your lawyer and your accountant before making a final decision. To meet with a business advisor click here.
Having a working relationship with the following professionals will save you time and money down the line, and put your business on solid ground:
- CPA (Certified Public Accountant)
- Lawyer
- Insurance agent
- Banker
- Bookkeeper
- Coach (us)
If you're finding these hard to come by, call us. We'll help you think about the characteristics to consider in developing a trustworthy team.
Consider asking other business owners you respect for their recommendations. Many of the Alaska SBDC centers have referral lists with names of attorneys, accountants, and insurance agents who have been recommended. No matter your choice, make sure that you check references from at least three current clients. You should also check the Better Business Bureau and any industry specific certification boards.
Yes. No matter how big or small your business, a business plan is a critical element of your business. Our business advisors have guides, templates and sample business plans that will help you think through and create your own business plan.
You should be involved in the writing and development of your business plan. Although a business advisor can help you understand the many aspects of a business plan, going on the journey yourself helps you understand areas of the business that you may not have previously considered. Our business advisors provide you guides, templates, tips and feedback on the business plan that you write. The writing of the business plan, as is the success of the business, is up to you. Trust us — your business will thank you later.
There are no definitive numbers of pages that result in the perfect business plan. In fact, you will never have a perfect plan, as it should be a living document and always evolving. Focus on just the facts and details of what's important for success. To begin developing an easy and effective business plan, look at Pitch Then Plan, which is a free business plan program.
The U.S. Small Business Administration, SBA, is a federal agency that provides aid, counsel, and disaster assistance to small businesses. They are able to fulfill their mission, in part, through the creation of the Small Business Development Centers (SBDC).
The SBDCs are nationwide and offer one on one, free confidential counseling, low cost workshops and reference libraries. The SBDCs are part of the nation-wide Association of Small Business Development Centers (ASBDC), which works on behalf of the SBDCs nationwide to support small businesses.
To understand your risks, consult with an insurance agent. The agent can also give you quotes to help you develop accurate startup cost projections. Typically the types of insurance a small business owner will need to consider are: liability, property, worker's compensation and, in some cases, bonding.
Starting a business always takes at least some amount of money, or "financing", to get started. However, before racking up a lifetime worth of credit card debt, it's worthwhile to visit your regional business advisor to think more intentionally about exactly how much financing you'll need, how it will be used, and what the best source of financing will be for you based on your individual situation. While the Alaska SBDC is not a lender, we do work closely with our clients to prepare for, seek out, and obtain the financing they need.
There are many different types of money out there, we'll help you choose the one that's best for your business, and we'll help you put a plan together to keep on top of your business' financial life.
Lending institutions typically look for the 5 C's when evaluating loan applications: credit, character, collateral, cash and capacity. Lenders will expect business owners to contribute their own money to the development of the business before they will consider loaning money to a business owner. They also make decisions based on credit score, good character and ability of the business to pay back the loan. For further assistance preparing a loan proposal, contact the Alaska SBDC.
Typically, you will need a personal financial statement, tax returns for the last three years (if currently in business, both business and personal tax returns), as well as copies of contractual agreements (for example, a copy of a lease). Depending on the situation, lenders will likely want to see a business plan, or at a minimum, financial statements demonstrating how the loan will benefit the business and be paid back.
No, the SBA does not directly lend money. However, it does provide guarantees, which eliminate some of the risk to its lending partners, such as banks, community development organizations and micro-lenders. For more information schedule an appointment to meet with an Alaska SBDC business advisor.
There are no grants available for for-profit businesses.
The only exception to this rule may be businesses that are developing products or services which the U.S. government might be interested in obtaining. If you think this might apply to your business, please contact our partner program TREND for more information.
Determining the right legal structure depends on your business and your circumstances. The Nolo website provides a primer on choosing the best ownership structure for your business which will help you understand the advantages and disadvantages to the options you can choose. However, we suggest that you also consult with an accountant and/or attorney to choose the appropriate legal entity for your business.
Depending on whether you are selling products or services, you may consider protecting your business name by registering for a Trademark or Servicemark. A trademark, issued by the US Patent and Trademark Office, lasts for 10 years and can be renewed. For more information, contact our partner program TREND.
A website can be an effective marketing tool for your business. Before investing in one, understand the costs associated in its design, maintenance, and hosting. In the meantime, click on the link below to immediately create a FREE one page website with our partner program BuyAlaska.
Sole proprietorships and partnerships that report a profit are required to pay self-employment tax in lieu of Social Security and Medicare contributions. Self-employed persons may be required to make quarterly deposits of estimated deposits based on profits. For specific information, consult with an accounting professional.
To be deductible, an expense must be "ordinary and necessary" in conducting your business. The IRS provides more information on small business and taxes.
Each of our five locations offers wide range of business workshops each month. Click here for more information on classes in your area.
Whether you're a new business or an existing business, you can begin the preparations to direct your business toward excellence by contacting our partner program, Alaska Performance Excellence program (APEX). Also, meeting with a business advisor will give you some tools to help you as you start, develop or expand your business.
