"The Business Corner" is an attempt to get salient business facts to Minority Small Business entrepreneurs. In most cases, Minority Businesses have not been exposed to "BASIC BUSINESS" information to assist them with the rigors connected to making their businesses better. We hope that the BUSINESS CORNER will help YOU do just that!!
BUSINESS BASICS 2009: There are some "misconceptions" about "Starting a Business in New Mexico!" And, it has caused some very confused small business entrepreneurs to ask "what is going on??" The most important of which is: In New Mexico, ALL businesses must register with the New Mexico Taxation and Revenue Department, and may be required to report and pay gross receipts tax and state income tax withholding on employee wages, as well as income tax on taxable income of the business.
If the business has employees, it will be required to register with the New Mexico Department of Labor, and will be required to pay State Unemployment Taxes. In addition, if the business is required to provide Workers Compensation, the business will be required to file quarterly reports with the New Mexico Taxation and Revenue Department.
Most businesses will also be required to obtain an occupation license from the municipality or county where its office is located. Property used in the business must be assessed for property taxes by the County Assessor's office in the county where the property is located.
Choice of Business Entity: If you are considering starting a business in New Mexico, you will need to decide how you want to organize your business. The decision involves many different factors, including questions of legal liability, tax considerations, and operational factors. It is a good idea to consult with professionals in making this decision.
Many of the registration and licensing requirements imposed by State and local governments are determined by the type of entity that you select. Following is a brief summary of some of those requirements and the agencies that you should contact:
Sole Proprietorship: A Sole Proprietorship is NOT a separate entity. The owner of the business and the business itself are one and the same, and there is no need to file a document to create a sole proprietorship. The General Tax and Licensing requirements discussed above will usually be applicable to a sole proprietorship.
PARTNERSHIPS: A partnership is an association of two or more person who carry on a business for profit as co-owners. There are various types of partnerships. As with a sole proprietorship, the General Tax and licensing Requirements may be applicable.
- General Partnerships: Although it is a good idea to have a written agreement, a general partnership can be formed orally (until court time) or in writing. There is no requirements that a general partnership file an agreement or certificate before it can exist. However, the partnership may file a certificate of registration with the New Mexico Secretary of State, under the New Mexico Uniform Partnership Act.
- Limited Partnerships: A limited partnership provides some protection from "liabilities" of the partnership for limited partners. The partnership must have at least one general partner who is not protected from the liabilities of the partnership, and at least one limited partner. a limited partnership is formed by filing a Certificate of Limited Partnership with the New Mexico Secretary of State, in compliance with the Uniform Limited Partnership Act.
- Limited Liability Partnerships: Partnerships (general or limited), who comply with certain insurance requirements, and file a registration statement with the New Mexico Secretary of State, may obtain "some" protection from liabilities.
CORPORATIONS: Corporations are legal entities separate from the owners. Corporations provide the owners with some protection from liabilities incurred by the business. A corporation is formed by filing Articles of Incorporation. New Mexico corporations are formed by filing Articles of Incorporation with the New Mexico Public Regulation Commission-Corporations Bureau (PRC).
Certain special purpose organizations may be required to comply with other laws before they may file Articles of Incorporation. For example, organizers of banks formed under State law are required to obtain permission from the Director of the Financial Institutions Division of the Regulation and Licensing Department, prior to filing Articles of Incorporation with the Public Regulation Commission (PRC). Similar requirements apply to trust companies and other special purpose corporations.
Many people mistakenly believe that S-corporations under Federal tax law are formed differently from other corporations under state law. A corporation "S-Status" as an S-corporation is governed by the Internal Revenue Code, not by state law.
Non-Profit Corporations: To qualify as a non-profit corporation, no part of the income or profit may be distributable to its members, directors or officers. The corporation is formed by filing Articles of Incorporation with the New Mexico Public Regulation Commission-Corporations Bureau. In addition, charitable corporations that solicit funds may be required to register and file reports with the NM Attorney General's office under the Charitable Solicitations Act.
BUSINESSES ORGANIZED IN OTHER STATES: This is a critical juncture when starting a New Business in New Mexico!! Businesses that have been organized in other states are required to register and qualify to do business in New Mexico. Your first stop is at Taxation and Revenue!
Foreign corporations and limited liability companies should contact the New Mexico Public Regulation Commission- Corporation Bureau (PRC). Foreign partnerships should contact the New Mexico Secretary of State.
ARE YOU REALLY READY?: Quite often we talk about Business Plans, Strategic Plans and Financial Plans, but what we didn't say is that "As a business person, you need to be computer literate!!" That is, everything you need and can't get, is already on your computer!!
When you hear people talking about E-Commerce; E-Trade; E-Tailing, Market Research; E-Business; Social Media; Social Referrals and the like..........all of this is done through "Electronic Commerce." If you are in business, here are some things you will need/must have, to get your business to the next level of success:
- Computer with Internet Access
- TIN - Tax Identification Number or Social Security Number
- Statistical Information about your business
- Electronic Funds Transfer information (EFT) i.e. routing number, account number for financial institution (bank).
- How to get to be a 501©3 organization (Tax Exempt) www.IRS.gov using IRS Form 1023
Why do you need these things? Because there are locations on the Internet that will help you get to the "Right Place" to get all the information you need. Following are a few places where you can start your "electronic searches":
It is important to think beyond the federal level when looking for a grant. Have your ducks in a row. This doesn't mean you need a 500 page Business Plan, but you SHOULD have a basic Business Plan, wherein you can demonstrate aptitude and an idea that will SELL your BUSINESS. A good grant development company (SBA, SCORE, ACCION, THE LOAN FUND) will help you develop what you need.
APPLY! That's a secret?! Well, yes it is. The reason MOST Grant seekers NEVER FIND A GRANT IS BECAUSE THEY DON'T APPLY!!
THE BUSINESS PLAN: We have received more "definitive" information on the "Business Plan." Explicit directions can NOW be "mastered" through a series of locations on the Internet and working closely with your "SCORE" OFFICE usually located in the local SBA office.
Who are these guys and Gals?? SCORE, "Counselors to America's Small Business" is a nonprofit association dedicated to educating entrepreneurs and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA). They are America's premier source of FREE and confidential small business advice for entrepreneurs.
What does SCORE Stand for? It is
Service
Corps
of
Retired
Executives. Our members believe that the thoughtful and systematic analysis you must do while writing a business plan will help ensure the success of your new business venture. Check your web site at:
http://www.score.org/, or call
248-8232!
SCORE to the rescue! First, here are some URLs you need to be familiar with and load to your address book to get started on your research, data collection, and formulation of YOUR new "Business Plan":
Put these locations into your address book for future reference!! Use them as needed and share with other business colleagues!
The
Business Plan consists of a narrative and several financial spreadsheets. The narrative template is the body of the business plan. The Generic Business Plan at
http://www.score.org/template_gallery.html contains over 150 questions divided into several sections. Work through the sections in any order you like, EXCEPT for the
Executive Summary, which should be done
last.
The real value of doing a business plan is not so much of having a finished product in hand, but, rather, the value lies in the process of research and thinking about your business in a systematic way. The act of planning helps you to think things through thoroughly, study and research when you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later.
It typically takes several weeks to complete a GOOD plan. Most of that time is spent in research and re-thinking your ideas and assumptions. But then, that is the value of the process. So MAKE TIME to do the job properly. Along with Score, the African American Chamber, and The Business Incubator, located at 309 Broadway, stand ready to help you out!! Most importantly, we know that when you do NOT HAVE a business plan, most banks, SBA, and other Micro lenders consider you as HIGH RISK and you will have difficulty getting loans.
We will continue to update you on how to write Business Plans, get your business registered, and manage your assets in this horrific economic downturn. Just call the African American Chamber 243-3949, SBA or SCORE (248-8232) for any and all business information. Please share this information with any African American Business Entrepreneurs that you may know in the community. Thank you!
BUSINESS REGISTRATION: here's SOME info on getting your business registered for government contracts. You are now entering into the MOST important part of your business recognition and success and you will only have to do these things ONCE and you will be set for the duration of your business unless you change the line of business you are in. There are other things we will get into, but for now, we will just talk DUNS and Registration: Once you complete this, you will be "light years" ahead of your competition!!
- First, you must have a DUNS number in order to get a CCR Registration. The Data Universal Numbering System (DUNS) is a unique nine-digit identification number provided by the commercial company, D&B or Dunn and Bradstreet. Call, toll free: D&B at 866-705-5711 if you do not ALREADY have a DUNS number. The process to request a DUNS number takes about ten minutes and is FREE of charge.
- If you already have a DUNS number, the D&B representative will advise you over the phone. You must have a different nine-digit DUNS for each "physical" location or different address in your organization (for large companies) as well as each legal division that may be co-located. When entering your DUNS number, enter only the numbers; do NOT INCLUDE DASHES.
- As a result of obtaining a DUNS number, you might be included on D&B's marketing list that is sold to other companies. If you do not want your name/company included on this marketing list, D&B has asked that you contact them ANYTIME to request removal.
GETTING REGISTERED:
After speaking with the D&B representative, you then need to proceed with getting registered. When we say registered, we mean the FEDERAL REGISTER.
- You MUST be registered with the Central Contractor Registration Agency (CCR) in order to be ELIGIBLE for award of contracts from Department of Defense agencies....and, you must keep your registration current. You must access your site ONCE A YEAR.
- Central Contractor Registration (online) Assistance Center: 1-888-227-2423. The CCR Website: http://www.ccr.gov. CCR by mail: CCR Registration Form, version 6-09/26/2000 - You may FAX or mail completed registration to: Department of Defense, CCR, 74 Washington Avenue , Suite 7, Battle Creek, Michigan 49017. FAX: 7243.
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The African American Chamber of Commerce NM, Inc.
"Our Business is to Make Your Business Better"